Openstax Principles of Economics 3e Exam Questions And Answers. Verified and Updated.
4 views 0 purchase
Course
Openstax Principles of Economics 3e
Institution
Openstax Principles Of Economics 3e
Openstax Principles of Economics 3e Exam
Questions And Answers. Verified and
Updated.
Circular flow diagram - answera diagram that views the economy as consisting of
households and firms interacting in a goods and services market and a labor market
command economy - answeran economy where econ...
Openstax Principles of Economics 3e Exam
Questions And Answers. Verified and
Updated.
Circular flow diagram - answer✔✔a diagram that views the economy as consisting of
households and firms interacting in a goods and services market and a labor market
command economy - answer✔✔an economy where economic decisions are passed down from
government authority and where the government owns the resources
division of labor - answer✔✔the way in which different workers divide required tasks to produce
a good or service
economics - answer✔✔the study of how humans make choices under conditions of scarcity
economies of scale - answer✔✔when the average cost of producing each individual unit declines
as total output increases
exports - answer✔✔products (goods and services) made domestically and sold abroad
fiscal policy - answer✔✔economic policies that involve government spending and taxes
globalization - answer✔✔the trend in which buying and selling in markets have increasingly
crossed national borders
goods and services market - answer✔✔a market in which firms are sellers of what they produce
and households are buyers
gross domestic product (GDP) - answer✔✔measure of the size of total production in an economy
imports - answer✔✔products (goods and services) made abroad and then sold domestically
labor market - answer✔✔the market in which households sell their labor as workers to business
firms or other employers
macroeconomics - answer✔✔the branch of economics that focuses on broad issues such as
growth, unemployment, inflation, and trade balance
market - answer✔✔interaction between potential buyers and sellers; a combination of demand
and supply
EXAM STUDY MATERIALS July 24, 2024 1:33:58 PM
,market economy - answer✔✔an economy where economic decisions are decentralized, private
individuals own resources, and businesses supply goods and services based on demand
microeconomics - answer✔✔the branch of economics that focuses on actions of particular agents
within the economy, like households, workers, and business firms
model/theory - answer✔✔a representation of an object or situation that is simplified while
including enough of the key features to help us understand the object or situation
monetary policy - answer✔✔policy that involves altering the level of interest rates, the
availability of credit in the economy, and the extent of borrowing
private enterprise - answer✔✔system where private individuals or groups of private individuals
own and operate the means of production (resources and businesses)
scarcity - answer✔✔when human wants for goods and services exceed the available supply
specialization - answer✔✔when workers or firms focus on particular tasks for which they are
well-suited within the overall production process
traditional economy - answer✔✔typically an agricultural economy where things are done the
same as they have always been done
underground economy - answer✔✔a market where the buyers and sellers make transactions in
violation of one or more government regulations
allocative efficiency - answer✔✔when the mix of goods produced represents the mix that society
most desires
budget constraint - answer✔✔all possible consumption combinations of goods that someone can
afford, given the prices of goods, when all income is spent; the boundary of the opportunity set
comparative advantage - answer✔✔when a country can produce a good at a lower cost in terms
of other goods; or, when a country has a lower opportunity cost of production
invisible hand - answer✔✔Adam Smith's concept that individuals' self-interested behavior can
lead to positive social outcomes
law of diminishing marginal utility - answer✔✔as we consume more of a good or service, the
utility we get from additional units of the good or service tends to become smaller than what we
received from earlier units
law of diminishing returns - answer✔✔as we add additional increments of resources to
producing a good or service, the marginal benefit from those additional increments will decline
marginal analysis - answer✔✔examination of decisions on the margin, meaning a little more or a
little less from the status quo
EXAM STUDY MATERIALS July 24, 2024 1:33:58 PM
,normative statement - answer✔✔statement which describes how the world should be
opportunity cost - answer✔✔measures cost by what we give up/forfeit in exchange; opportunity
cost measures the value of the forgone alternative
opportunity set - answer✔✔all possible combinations of consumption that someone can afford
given the prices of goods and the individual's income
positive statement - answer✔✔statement which describes the world as it is
production possibilities frontier (PPF) - answer✔✔a diagram that shows the productively
efficient combinations of two products that an economy can produce given the resources it has
available.
productive efficiency - answer✔✔when it is impossible to produce more of one good (or service)
without decreasing the quantity produced of another good (or service)
sunk costs - answer✔✔costs that we make in the past that we cannot recover
utility - answer✔✔satisfaction, usefulness, or value one obtains from consuming goods and
services
ceteris paribus - answer✔✔other things being equal
complements - answer✔✔goods that are often used together so that consumption of one good
tends to enhance consumption of the other
consumer surplus - answer✔✔the extra benefit consumers receive from buying a good or
service, measured by what the individuals would have been willing to pay minus the amount that
they actually paid
deadweight loss - answer✔✔the loss in social surplus that occurs when a market produces an
inefficient quantity
demand - answer✔✔the relationship between price and the quantity demanded of a certain good
or service
demand curve - answer✔✔a graphic representation of the relationship between price and
quantity demanded of a certain good or service, with quantity on the horizontal axis and the price
on the vertical axis
demand schedule - answer✔✔a table that shows a range of prices for a certain good or service
and the quantity demanded at each price
economic/social/total surplus - answer✔✔the sum of consumer surplus and producer surplus
EXAM STUDY MATERIALS July 24, 2024 1:33:58 PM
, equilibrium - answer✔✔the situation where quantity demanded is equal to the quantity supplied;
the combination of price and quantity where there is no economic pressure from surpluses or
shortages that would cause price or quantity to change
equilibrium price - answer✔✔the price where quantity demanded is equal to quantity supplied
equilibrium quantity - answer✔✔the quantity at which quantity demanded and quantity supplied
are equal for a certain price level
excess demand - answer✔✔at the existing price, the quantity demanded exceeds the quantity
supplied; also called a shortage
excess supply - answer✔✔at the existing price, quantity supplied exceeds the quantity
demanded; also called a surplus
factors of production - answer✔✔the resources such as labor, materials, and machinery that are
used to produce goods and services; also called inputs
inferior good - answer✔✔a good in which the quantity demanded falls as income rises, and in
which quantity demanded rises and income falls
inputs - answer✔✔the resources such as labor, materials, and machinery that are used to produce
goods and services; also called factors of production
law of demand - answer✔✔the common relationship that a higher price leads to a lower quantity
demanded of a certain good or service and a lower price leads to a higher quantity demanded,
while all other variables are held constant
law of supply - answer✔✔the common relationship that a higher price leads to a greater quantity
supplied and a lower price leads to a lower quantity supplied, while all other variables are held
constant
normal good - answer✔✔a good in which the quantity demanded rises as income rises, and in
which quantity demanded falls as income falls
price - answer✔✔what a buyer pays for a unit of the specific good or service
price ceiling - answer✔✔a legal maximum price
price control - answer✔✔government laws to regulate prices instead of letting market forces
determine prices
price floor - answer✔✔a legal minimum price
producer surplus - answer✔✔the extra benefit producers receive from selling a good or service,
measured by the price the producer actually received minus the price the producer would have
been willing to accept
EXAM STUDY MATERIALS July 24, 2024 1:33:58 PM
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Thebright. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.49. You're not tied to anything after your purchase.