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Questions and Answers
It costs Cool Clothes Company $15 to produce one pair of jeans, but they needed to discontinue production of shirts to focus on jeans. For this company, the $15 is the _______ and discontinuation of shirt production is considered their __________.
It costs Cool Clothes Company $15 to produce one pair of jeans, but they needed to discontinue production of shirts to focus on jeans. For this company, the $15 is the _______ and discontinuation of shirt production is considered their __________.
Which occurs during disequilibrium? (Check all that apply)
Which occurs during disequilibrium? (Check all that apply)
Which is the best definition of hyperinflation?
Which is the best definition of hyperinflation?
How do trade agreements help the countries involved?
How do trade agreements help the countries involved?
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Look at the following chart. Producer A's opportunity cost would be
Look at the following chart. Producer A's opportunity cost would be
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Which are affected by the factors of production? (Check all that apply)
Which are affected by the factors of production? (Check all that apply)
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When it spends money on education, a government is trying to
When it spends money on education, a government is trying to
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If expansionary taxation policies are left unchecked, which is the most likely result?
If expansionary taxation policies are left unchecked, which is the most likely result?
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Businesses can use globalization to their advantage by
Businesses can use globalization to their advantage by
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People who oppose labor unions believe that unions
People who oppose labor unions believe that unions
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Demand-pull inflation occurs when
Demand-pull inflation occurs when
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What is an example of scarcity?
What is an example of scarcity?
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How does a socialist government with a command economy manage its economy?
How does a socialist government with a command economy manage its economy?
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What is the role of the three questions of economics?
What is the role of the three questions of economics?
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What new laws did the New York Factory Investigating Commission request? (Check all that apply)
What new laws did the New York Factory Investigating Commission request? (Check all that apply)
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Which economic indicators are used to measure the global economy? (Choose four answers)
Which economic indicators are used to measure the global economy? (Choose four answers)
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Why is the slow growth that can result from a contractionary policy a positive effect?
Why is the slow growth that can result from a contractionary policy a positive effect?
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The graph shows a point of equilibrium. What is the price at which equilibrium is achieved?
The graph shows a point of equilibrium. What is the price at which equilibrium is achieved?
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The chart shows the marginal cost of producing apple pies. This chart demonstrates that the marginal cost
The chart shows the marginal cost of producing apple pies. This chart demonstrates that the marginal cost
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In a free market system, price controls can include both floors and _______.
In a free market system, price controls can include both floors and _______.
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Corporate taxes are a type of
Corporate taxes are a type of
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The graph shows the market for graphic T-shirts. What does the graph show about the relationship between a product and its price?
The graph shows the market for graphic T-shirts. What does the graph show about the relationship between a product and its price?
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A company that makes mobile phones introduces a new, faster model that has strong consumer interest. However, the old model is still available. What will most likely happen to the price of the old model, and why?
A company that makes mobile phones introduces a new, faster model that has strong consumer interest. However, the old model is still available. What will most likely happen to the price of the old model, and why?
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Economists can use new technology to
Economists can use new technology to
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In a competitive market, a computer store offers customers a warranty to help pay for any future damages. This is an example of
In a competitive market, a computer store offers customers a warranty to help pay for any future damages. This is an example of
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What is one example of a closed economy?
What is one example of a closed economy?
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A regulatory agency that attempts to limit risk in the banking system is
A regulatory agency that attempts to limit risk in the banking system is
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If Country A is an agricultural country and Country B has many cities and factories, it would make sense for
If Country A is an agricultural country and Country B has many cities and factories, it would make sense for
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What is one way that technology can improve the production of goods?
What is one way that technology can improve the production of goods?
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Which organization created a shared economy?
Which organization created a shared economy?
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Which best describes why governments enact tariffs?
Which best describes why governments enact tariffs?
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If it becomes less expensive to travel overseas from the United States, American tourists will benefit from the fact that
If it becomes less expensive to travel overseas from the United States, American tourists will benefit from the fact that
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The graph shows the price of a good compared to the quantity demanded. This graph demonstrates how
The graph shows the price of a good compared to the quantity demanded. This graph demonstrates how
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What is one reason why the government would provide financial assistance to an entrepreneur?
What is one reason why the government would provide financial assistance to an entrepreneur?
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What is the best definition of profit?
What is the best definition of profit?
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When entrepreneurs develop new products, other companies also experience growth because they
When entrepreneurs develop new products, other companies also experience growth because they
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Jacob is considering buying a new car. Which nonrenewable resource should influence the decision?
Jacob is considering buying a new car. Which nonrenewable resource should influence the decision?
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Which are indicators that economists use to measure how an economy grows? (Select all that apply)
Which are indicators that economists use to measure how an economy grows? (Select all that apply)
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When the government injects money into the economy, consumers may have more disposable income, which may lead to
When the government injects money into the economy, consumers may have more disposable income, which may lead to
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The Fed may respond to a recession by
The Fed may respond to a recession by
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Who was Adam Smith?
Who was Adam Smith?
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In a mixed market economy, what is a typical way the government can reduce unemployment?
In a mixed market economy, what is a typical way the government can reduce unemployment?
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Public property is land or goods
Public property is land or goods
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Embargoes, quotas, and standards are tools that countries use
Embargoes, quotas, and standards are tools that countries use
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The graph below shows the value of the US dollar versus the Canadian dollar. According to the graph, the American dollar was the strongest during which month?
The graph below shows the value of the US dollar versus the Canadian dollar. According to the graph, the American dollar was the strongest during which month?
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Which situation is an example of comparative advantage in an international market?
Which situation is an example of comparative advantage in an international market?
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When does government regulate producers in a mixed-market economy?
When does government regulate producers in a mixed-market economy?
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Economists use changes in GDP to measure
Economists use changes in GDP to measure
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Which of these practices describe how producers in oligopolies generally try to create competition? (Check all that apply)
Which of these practices describe how producers in oligopolies generally try to create competition? (Check all that apply)
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Which best describes how advertising influences consumer choice in an oligopoly?
Which best describes how advertising influences consumer choice in an oligopoly?
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Study Notes
Production Costs and Opportunity Costs
- Cool Clothes Company incurs a production cost of $15 per pair of jeans, with opportunity cost being the discontinued shirt production.
- Opportunity cost refers to the benefits missed when choosing one alternative over another.
Disequilibrium in Supply and Demand
- During disequilibrium, supply may be less than or greater than demand, affecting pricing and production decisions.
- Balance in the market occurs when supply meets demand.
Hyperinflation
- Defined as an exponential increase in the price of goods and services, indicating severe economic instability.
Trade Agreements
- Essential for reducing trade barriers between countries, stimulating economic growth and cooperation.
Opportunity Cost in Production
- Producer A’s opportunity cost involves the decision between growing different fruit varieties, highlighting the trade-offs in production choices.
Factors of Production
- Demand, availability, and quality of items are influenced by the factors of production, shaping market dynamics.
Government Spending on Education
- Government expenditure in education serves dual purposes: meeting social needs and bolstering the economy.
Impact of Expansionary Tax Policies
- Unchecked expansionary tax policies likely result in high inflation, affecting economic stability.
Globalization and Business Expansion
- Businesses leverage globalization to access new markets by finding customers overseas, increasing sales potential.
Labor Unions
- Opposition to labor unions often centers around the belief that they hinder the hiring of more qualified workers.
Demand-Pull Inflation
- Occurs when consumer purchasing increases, leading to rising prices for goods.
Scarcity
- Defined by the existence of limited resources, emphasizing the need for prioritization in resource allocation.
Command Economy in Socialism
- The government controls production factors and decision-making, centralizing economic management.
Economic Decision-Making Framework
- The three fundamental questions of economics guide resource allocation and production strategies.
New York Factory Investigating Commission
- Advocated for enhanced sanitation standards and improved safety regulations within factories.
Global Economic Indicators
- Purchasing power parity, trade volumes, and GDP are critical indicators for measuring global economic health.
Contractionary Policy Effects
- Slow economic growth from contractionary policies can positively decrease inflation rates.
Equilibrium Price
- Point of equilibrium in a market is represented by the price of $9, where supply and demand are balanced.
Marginal Cost of Production
- As illustrated, marginal costs initially increase with production, affecting pricing strategies.
Price Controls in Free Market
- Price controls can include both ceilings and floors, impacting market equilibrium.
Corporate Taxes
- Considered a form of income tax, affecting business profitability and government revenue.
Price-Quantity Relationship
- An inverse relationship usually exists where an increase in product quantity can lead to price variations.
Pricing Dynamics of New Products
- New product introductions typically lead to decreased prices for older models, encouraging continued consumer purchases.
Technology's Role in Economics
- New technology enhances data analysis, improving decision-making and efficiencies in production.
Warranty Offers in Competitive Markets
- Providing warranties reduces consumer risk, enhancing customer trust and potentially influencing sales.
Closed Economy Example
- A closed economy represents systems that restrict international trade, affecting market access and growth.
Regulatory Agency Functions
- The Office of the Comptroller of the Currency (OCC) aims to limit risks within the banking system.
Comparative Advantage
- It is advantageous for countries to specialize in producing goods they can create most efficiently, enhancing trade benefits.
Mixed Market Economy
- Government measures may include funding projects to create jobs, aimed at reducing unemployment.
Public Property
- Defined as assets owned by the government, providing public resources and services.
Trade Regulations
- Tools such as embargoes and quotas are utilized by countries to impose trade restrictions for various reasons, including punishment.
Value of Currency
- The strength of the US dollar has fluctuated, with peak valuation noted in March 2013.
Economic Growth Measurement
- GDP changes are a primary indicator reflecting economic growth or decline.
Oligopoly Practices
- Producers maintain competition through low pricing, promotions, advertising, and fostering brand loyalty.
Advertising Influence in Oligopoly
- Advertising serves to entice consumers towards new products while influencing brand perceptions.
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Description
Prepare for your economics exam with these flashcards that cover key concepts such as production and opportunity costs. Test your understanding of the trade-offs that companies face when making production decisions. These flashcards are an essential tool for mastering economics principles.
