economics spring 2014
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Economics Spring 2014. Final Exam Review . QUESTION. People’s wants are unlimited. This fact means that which of the following is always present? scarcity shortages marginal utility costs of production. ANSWER. - PowerPoint PPT PresentationTRANSCRIPT
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FINAL EXAM REVIEW
Economics Spring 2014
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QUESTION
People’s wants are unlimited. This fact means that which of the following is always present?
scarcityshortagesmarginal utilitycosts of production
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ANSWER
People’s wants are unlimited. This fact means that which of the following is always present?
scarcity
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QUESTION
Name the four stages of the business cycle.
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ANSWER
Name the four stages of the business cycle. EXPANSION PEAK CONTRACTION TROUGH
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QUESTION
What are the factors of production?
goods and services risk and opportunity land, labor, and capital wages, salaries, and profits
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ANSWER
What are the factors of production?
land, labor, and capital
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QUESTION
Which of the following would be included in the study of macroeconomics?
Salaries of college professors Computer prices Unemployment in the nation Silver prices
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ANSWER
Which of the following would be included in the study of macroeconomics?
Unemployment in the nation
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QUESTION
"Taxes ought to be lowered.” is an example of what kind of economic language?
PositiveNormative
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ANSWER
"Taxes ought to be lowered.” is an example of what kind of economic language?
Normative
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QUESTION
Provide an example of specialization.
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ANSWER
Specialization is when individual workers become highly skilled at a specific task and focus their efforts on that task, leaving other jobs to be done by other highly skilled workers.
EX: An assistant in a tailoring shop only replaces zippers.
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QUESTION
What is the law of unintended consequences?
Attempts to intervene always backfire. Actions often have unforeseen effects. Markets are always influenced by emotional
factors. Economic booms are always followed by
downturns.
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ANSWER
What is the law of unintended consequences?
Actions often have unforeseen effects.
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QUESTION
Consumer sovereignty means…
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ANSWER
Consumer sovereignty means…customers decide whether any business
succeeds or fails
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QUESTION
Which kind of economy is most common today?
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ANSWER
Which kind of economy is most common today? Mixed Economy
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QUESTION
Human-made goods that are used to produce other goods and services are which type of resource?
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ANSWER
Human-made goods that are used to produce other goods and services are which type of resource?
Capital
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QUESTION
The three fundamental economic questions are what to produce, ______________, and for whom to produce.
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ANSWER
The three fundamental economic questions are
what to produce, how to produce, and for whom to produce.
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QUESTION
Provide an example of the law of diminishing marginal utility. (Bonus points for acting out or illustrating your example)
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ANSWER
Provide an example of the law of diminishing marginal utility. (Bonus points for acting out or illustrating your example)
A new toy is less exciting to a child with many toys than to a child with just a few.
Someone who has one bicycle will have less use for another.
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QUESTION
The branch of economics that studies decision making by individuals, families and businesses is called what?
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ANSWER
The branch of economics that studies decision making by individuals, families and businesses is called what? Microeconomics
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QUESTION
The act of transforming a private enterprise into a government enterprise, is called what?
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ANSWER
The act of transforming a private enterprise into a government enterprise, is called what?
NATIONALIZATION
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QUESTION
What is an example of thinking at the margin? (Bonus points for acting out or illustrating your example)
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ANSWER
What is an example of thinking at the margin? (Bonus points for acting out or illustrating your example)
John has six shirts and is trying to decide whether to buy a seventh.
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QUESTION
The quantity supplied exceeds the quantity demanded at the current price; this results in what condition?
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ANSWER
The quantity supplied exceeds the quantity demanded at the current price; this results in what condition?Surplus
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QUESTION
The amount of soap made matches the amount of soap that people want to buy; this results in what condition?
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ANSWER
The amount of soap made matches the amount of soap that people want to buy; this results in what condition? MARKET EQUILIBRIUM
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QUESTION
What is a price ceiling?
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ANSWER
What is a price ceiling?When a government or other agency sets a
minimum price of a good. Often below the equilibrium price.
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QUESTION
What is the result of a price ceiling set below the equilibrium?
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ANSWER
What is the result of a price ceiling set below the equilibrium? SHORTAGE
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QUESTION
Illustrate the law of demand
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ANSWER
Illustrate the law of demand
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QUESTION
Illustrate the law of supply
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ANSWER
Illustrate the law of supply
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QUESTION
If the demand for a good increases because consumer income increases, the good is called what?
Inferior good Normal good Necessity good Luxury good
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ANSWER
If the demand for a good increases because consumer income increases, the good is called what?
Normal good
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QUESTION
What causes the demand curve to shift left?
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ANSWER
What causes the demand curve to shift left?
A decrease in overall demand.
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QUESTION
A measure of the degree to which the quantity demanded or supplied of a good or service changes in response to a change in price is called what?
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ANSWER
A measure of the degree to which the quantity demanded or supplied of a good or service changes in response to a change in price is called what?
Elasticity
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QUESTION
In which market structure do producers have the most market power?
monopolistic competition monopoly oligopoly perfect competition
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ANSWER
In which market structure do producers have the most market power?
monopoly
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QUESTION
Name three categories of economic activity NOT included in the GDP.
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ANSWER
Name three categories of economic activity NOT included in the GDP. Secondhand Transactions Transfer Payments Stock Market Transactions Nonmarket Activities The Underground Economy
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QUESTION
______________ is valued at prices in a base year.
Real GDPNominal GDP
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ANSWER
______________ is valued at prices in a base year.
Real GDP
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QUESTION
What are Adam Smith’s Four Maxims regarding taxation?
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ANSWER
What are Adam Smith’s Four Maxims regarding taxation?
EquityCertaintyConvenienceEfficiency
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QUESTION
What are the four types of unemployment?
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ANSWER
What are the four types of unemployment?frictional unemploymentstructural unemploymentseasonal unemploymentcyclical unemployment
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FINAL QUESTION
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Label the stages of the business cycle