FREE ECONOMICS AND STUDY GAMES ABOUT ECON 1116

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FREE ECONOMICS AND STUDY GAMES ABOUT ECON 1116

EXAM 1

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -62 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation

Question 1: market failure

Answer:

a situation in which a market left on its own fails to allocate resources efficiently

Question 2: normative statements

Answer:

claims that attempt to prescribe how the world should be

Question 3: absolute advantage

Answer:

the ability to produce a good using fewer inputs than another producer

Question 4: microeconomics

Answer:

the study of how households and firms make decisions and how they interact in markets

Question 5: market

Answer:

a group of buyers and sellers of a particular good or service Question 6: Principle 8: A country's standard of living depends on its ability to produce goods

Answer:

a nations productivity (amount of goods and services produced by each unit of labor input) determines its standard of living

Question 7: externality

Answer:

the uncompensated impact of one persons action not he well-being of a bystander

Question 8: the law of supply and demand

Answer:

the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance

Question 9: inflation

Answer:

an increase in the overall level of prices in the economy

Question 10: cross-price elasticity of demand

Answer:

a measure of how much the quantity demanded of one good responds to a change in the price of another good. % change in Q demanded of A / % change in price of B

Question 11: opportunity cost

Answer:

whatever must be given up to obtain some item (the highest value thing being given up) Question 12: Principle 5: Trade can make everyone better off

Answer:

Trade allows countries to specialize in what they of best and to enjoy a greater variety of goods and services. Trade outside of PPF

Question 13: equality

Answer:

the property of distributing economic prosperity uniformly among the members of society

Question 14: price elasticity of supply

Answer:

a measure of how much the quantity supplied of a good responds to a change in the price of that good.% change in Q supplied / % change in price Question 15: Principle 1: People face trade-offs

Answer:

to get something that we like, we usually have to give up something else that we also like. making decisions requires trading off one good against another.

Question 16: demand curve

Answer:

a graph of the relationship between the price of a good and the quantity demanded

Question 17: rational people

Answer:

people who systematically and purposefully do the best they can to achieve their objectives; rational people think at the margin

Question 18: quantity demanded

Answer:

the amount of a good that buyers are willing and able to purchase

Question 19: equilibrium

Answer:

a situation in which the market price has reached the level at which quantity supplied equals quantity demanded

Question 20: comparative advantage

Answer:

the ability to produce a good act a lower opportunity cost that another producer

Question 21: efficiency

Answer:

the property of a resource allocation of maximizing the total surplus received by all members of society

Question 22: price elasticity of demand

Answer:

a measure of how much the quantity demanded of a good responds to a change in the price of that good. % change in Q demanded / % change in price

Question 23: inferior good

Answer:

a good for which and increase in income reduces the quantity demanded ex: ramen

Question 24: Principle 10: Society faces a short-run trade-off between inflation and unemployment

Answer:

over a period of time, many economic policies push inflation and unemployment in opposite directions in the short run Question 25: Principle 9: Prices rise when the government prints too much money

Answer:

When a nations government prints large quantities of their currency, the value of the currency falls, and prices increase. High inflation imposes various costs on society.

Question 26: equilibrium price

Answer:

the price that balances quantity supplied and quantity demanded

Question 27: marginal change

Answer:

a small incremental adjustment to a plan of action

Question 28: positive statements

Answer:

claims that attempt to describe the world as it is