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Macroeconomic
| Question | Answer |
|---|---|
| What are the two fundamental facts that define the economizing problem? | Society's material wants are unlimited, while the means for producing these wants (economic resources) are scarce. |
| What economist call full employment? | When all the available resources are being used. |
| What is full production? | When available resources are making the most valuable contribution to output. |
| What do you call when resources are dedicated to the goods society wants? | Allocative efficiency |
| When is productive efficiency achieved? | When the least costly method of production is used to produce goods and services. |
| What is required to achieve economic efficiency? | Full employment and full production |
| What is opportunity cost any good? | It is the amount of other products that must be forgone or sacrifice to obtain some amount ( an additional unit)of any given product. |
| What notion does a downward sloped line reflect graphically? | Opportunity cost. |
| What is a production possibilities curve? | It is a graph that depicts the boundary between those production levels that can be attained and those that cannot. |
| What represent any point on the production possibilities curve? | A maximum output of two products that is both attainable and efficient. |
| What represent a point lying outside the production possibilities curve? | A production level that is not attainable. |
| What represent a point lying inside the production possibilities curve? | A level of production that is attainable but inefficient. |
| What notion does the concave shape of the production possibilities curve reflect? | Increasing opportunity cost. |
| What happens in an economy of underemployment or underproduction? | The economy will be producing less than any point on the production possibilities curve. |
| What does a shift to the right of the production possibilities curve represent? | An economic growth. |
| What is consumer goods? | Goods and services that satisfy wants directly. |
| What do you call the items that satisfy wants indirectly by facilitating the production of consumable goods? | Capital goods. |
| What determines economic growth? | The amount of capital goods a society produce. |
| What do you call a system of private ownership of resources and the use of free market and price to determine economic activity? | Capitalism. |
| What is laissez-faire or " Let it be"? | It is term that refers to little government involvement. |
| What do you call the market characterized by public ownership of resources and centralized economic planning? | Communism, or Command Economy |
| What most economic system are considered to be? | Mixed or somewhere between those two extremes |
| What type of economy do many of the developing or undeveloped countries of the world have? | Traditional economy. |
| What is traditional economy? | It is economy within which custom and culture define how resources are produced and exchanged and how income is distributed. |
| What is called the amount of good or service that consumers plan to buy in a given period of time and in given condition? | Demand |
| What is the Law of Demand? | if all other things remain the same, the higher the price of a good, the lower is the quantity demanded of that good. |
| What do the substitute effect suggest? | It suggests that a lower price provides incentive to substitute a cheaper good for a similar goods that are now more expensive. |
| What does the income effect indicate? | That at a lower price you can afford more of the good without giving up other goods. |
| What happen when an influence other than price change the demand for a good? | There is change in demand represented by a shift of the demand curve. |
| What is supply? | It is the amount of a good or service that a producer plans to sell in a given period of time and in a given conditions. |
| As the price rises, the corresponding quantity supplied rises and likewise when the price falls, the quantity supplied decreases.What do you call that? | The Law of Supply. |
| What happen when an influence other than price change the supply for a good? | There is a change in supply represented by a shift of the supply curve. |
| What do you call the point at which the quantity demanded equals the quantity supplied? | The equilibrum price |
| When will it be a surplus? | at any price above the equilibrium. |
Created by:
kofbill
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