Foundations of Economics: Goods, Services, and Choices, Exams of Econometrics and Mathematical Economics

Download Foundations of Economics: Goods, Services, and Choices and more Exams Econometrics and Mathematical Economics in PDF only on Docsity! Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers Scarcity - correct answer the condition that arises because wants exceeds the ability of resources to satisfy them. Economics - correct answer the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity, the incentives that influence those choices, and the arrangements that coordinate them. Microeconomics - correct answer The study of the choices that individuals and businesses make and the way these choices interact and are influenced by governments. Macroeconomics - correct answer The study of the aggregate (or total) effects on the national economy and the global economy of the choices that individuals, businesses, and governments make. goods and services - correct answer are the objects (goods) and actions (services) that people value and produce to satisfy human wants. Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers The choices that are best for the individual who makes them are choices made in the pursuit of - correct answer Self Interest The choices that are best for society as a whole are choices made in the - correct answer Social Interest Globalization - correct answer the expansion of international trade and the production of components and services by firms in other countries—has been going on for centuries. What are the six ideas that define the economic way of thinking? - correct answer 1. Choice is a trade off 2.Cost is what you must give up to get something 3.Benefit is what you gain from something 4.People make rational choices by comparing benefits and costs 5.Most choices are "how much" choices made at the margin 6.Choices respond to incentives Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers When do you make a rational choice? - correct answer when you take those actions for which marginal benefit exceeds or equals marginal cost. Incentive - correct answer a reward or a penalty—a "carrot" or a "stick"—that encourages or discourages an action. What do economists study to try and understand and predict the effects of economic forces? - correct answer Scientific Method economic model - correct answer a description of some feature of the economic world that includes only those features assumed necessary to explain the observed facts. normative statements - correct answer Disagreements that can't be settled by facts and are statements about what ought to be. positive statements - correct answer Disagreements that can be settled by facts and are statements about what is. Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers What do we produce? - correct answer We divide the vast array of goods and services produced into: 1.Consumption goods and services 2.Capital Goods Consumption goods and services - correct answer are goods and services that are bought by individuals and used to provide personal enjoyment and contribute to a person's standard of living. Capital Goods - correct answer are goods that are bought by businesses to increase their productive resources. Factors of Production - correct answer the productive resources used to produce goods and services. Factors of production are grouped into what four categories? - correct answer 1.land 2.labor Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers 3.capital 4.entrepreneurship Land - correct answer includes all the "gifts of nature" that we use to produce goods and services. What does land include? - correct answer all the things we call natural resources.minerals, water, air, wild plants, animals, birds, and fish as well as farmland and forests. Labor - correct answer is the work time and work effort that people devote to producing goods and services. What does the quality of labor depend on? - correct answer how skilled people are—what economists call human capital. Human Capital - correct answer the knowledge and skill that people obtain from education, on-the-job training, and work experience. Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers personal distribution of income - correct answer the distribution of income among households. The richest ____% earn ______% of the total income - correct answer 20%; 50% The quality of labor depends on? - correct answer Human Capital The differences in human capital between the advanced economies and the developing economies is enormous and it arises from? - correct answer 1.Education, on-the-job training, and experience 2.Physical ability and state of health. Circular Flow Model - correct answer a model of the economy that shows:The circular flow of expenditures and incomes that result from decision makers' choices and The way those choices interact in markets to determine what, how, and for whom goods and services are produced. Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers Households - correct answer are individuals or people living together as decision-making units. Firms - correct answer are institutions that organize production of goods and services. market - correct answer any arrangement that brings buyers and sellers together and enables them to get information and do business with each other. goods market - correct answer are markets in which goods and services are bought and sold. factor markets - correct answer markets in which factors of production are bought and sold. Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers In factors market - correct answer Households supply factors of production.Firms hire factors of production. In goods market - correct answer Firms supply goods and services produced.Households buy goods and services. Money flows run in the ________ direction to the real flows. - correct answer opposite We divide governments into what two broad levels? - correct answer 1.Federal government 2.State and local government Federal Government The federal government's major expenditures are to provide? - correct answer 1.Goods and services 2.Social Security and welfare benefits 3.Transfers to state and local governments The federal government finances its expenditures by? - correct answer Collecting Taxes Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers demand - correct answer the relationship between the quantity demanded and the price of a good when all other influences on buying plans remain the same. Demand Schedule - correct answer a list of the quantities demanded at each different price when all the other influences on buying plans remain the same. Demand Curve - correct answer a graph of the relationship between the quantity demanded of a good and its price when all other influences on buying plans remain the same. Market Demand - correct answer the sum of the demands of all the buyers in a market.The market demand curve is the horizontal sum of the demand curves of all buyers in the market. Change in Demand - correct answer a change in the quantity that people plan to buy when any influence other than the price of the good changes.A change in demand means that there is a new demand schedule and a new demand curve. Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers The main influences on buying plans that change demand are? - correct answer 1.Prices of related goods 2.Expected future prices 3.Income 4.Expected future income and credit 5.Number of buyers 6.Preferences substitute - correct answer a good that can be consumed in place of another good. The demand for a good increases if the price of one of its substitutes ... - correct answer rises The demand for a good decreases if the price of one of its substitutes... - correct answer falls Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers complement - correct answer a good that is consumed with another good. ice cream and fudge sauce are complements. The demand for a good increases if the price of one of its complements... - correct answer falls The demand for a good decreases if the price of one of its complements... - correct answer rises normal good - correct answer a good for which the demand increases if income increases and demand decreases if income decreases. inferior good - correct answer a good for which the demand decreases if income increases and demand increases if income decreases. change in quantity demanded - correct answer a change in the quantity of a good that Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers The main influences on selling plans that change supply are? - correct answer 1.Prices of related goods 2.prices of resources and other inputs 3.expected future prices 4.number of sellers 5.productivity Substitute in Production - correct answer a good that can be produced in place of another good. Compliment in Production - correct answer a good that is produced along with another good. Change in quantity supplied - correct answer a change in the quantity of a good that suppliers plan to sell that results from a change in the price of the good. Change in Supply - correct answer a change in the quantity that suppliers Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers plan to sell when any influence on selling plans other than the price of the good changes. Market equilibrium - correct answer occurs when the quantity demanded equals the quantity supplied. At market equilibrium, buyers' and sellers' plans are consistent. Equilibrium Price - correct answer the price at which the quantity demanded equals the quantity supplied. Equilibrium Quantity - correct answer the quantity bought and sold at the equilibrium price. Law of market forces - correct answer When there is a shortage, the price rises. When there is a surplus, the price falls. Shortage - correct answer occurs when the quantity demanded exceeds the quantity supplied. Foundations of Economics Huntingdon College Final Ch. 1,3,4,14,15 and 16 Questions And Answers Surplus - correct answer when the quantity supplied exceeds the quantity demanded. When demand changes? - correct answer -The supply curve does not shift. -But there is a change in the quantity supplied. -Equilibrium price and equilibrium quantity change in the same direction as the change in demand. Gross domestic product or GDP - correct answer The market value of all the final goods and services produced within a country in a given time period. Final good or service - correct answer a good or service that is produced for its final user and not as a component of another good or service. Intermediate good or service - correct answer a good or service that is produced by one firm, bought by another firm, and used as a component of a final good or service