Economics Outcomes

Final Exam

CH 1 What is Economics

• 4• Economists call the resources used to make all

goods and services the _____ of _____.

• Know the factors of production (land, labor, capital, entrepreneurs)

Factors production

CH 1 What is Economics

• 8• According to the _____ and _____ example, if

a country decides to spend more on military goods, the country will have less money to devote to consumer goods.

• Guns butter

Ch 1 What is Economics?

• 9• The most desirable alternative given up as a

result of a decision is called the _____ _____.• Opportunity cost

CH 2 Economic Systems

• 26• A _____ economy relies on habit, custom, or

ritual to decide what to produce, how to produce it, and to whom to distribute it.

• Traditional

• know 4 types of economic systems (traditional, market, planned or command, mixed)

Ch 2 Economic Systems

• 42• The flow of goods, services, and money

between households and businesses in the free market can be represented as flowing _____ ____ _____.

• • In a circle

CH 2 Economic Systems

• 43• The purpose of the free enterprise system is

to give _____ freedom to make _____ choices.• • Consumers economic

CH 4 Demand

• 79• When shoes at a local store went on sale at 50

percent off the regular price, the store sold almost every pair it had in less than a day. Which economic principle does this illustrate?

• Law of demand

Ch 5 Supply

• 103• Farzona is opening a new coffee shop and is having

trouble deciding on the price to charge for cappuccino. How will determining all the supply schedules of coffee shops in her market help Farzona? The market supply schedule would help Farzona determine the _____ supply of cappuccino at a certain _____.

• Total certain

Ch 5 Prices

Know how to find the equilibrium point on a graph.

Ch 7 Market Structures

• 153• Factors that make it difficult for new firms to

enter a market are called _____ _____ _____.• Barriers to entry

CH 8 Business Organization

• 185• In a _____ two or more persons share

ownership and divide the responsibilities and profits.

• Partnership

CH 8 Business Organization

• 190• In a _____ proprietorship, one owner earns all

the profits and is responsible for all the debts.

• Sole

Ch 8 Business Organization

• 196 • Advantages of incorporating include limited

liability for owners, _____ ownership, and ability to attract _____.

• Transferable capital

CH 9 Labor

• 233 • Collective bargaining, mediation, and

arbitration involve negotiations between _____ and _____ leaders.

• Union, company

CH 10 Money and Banking

• 245• Durability, portability, and uniformity are all

essential characteristics of _____.

• Currency

CH 10 Money and Banking

• 254• The _____ _____ System improved the

banking industry in the twentieth century by serving as a central bank with the power to lend to other banks in time of need.

• Federal Reserve

CH 11 Financial Markets

• 274-275• A bank is a _____ intermediary.

• Financial

CH 10 Money and Banking

• 281• The _____ and _____ Commission is a

government agency that regulates financial markets and investment companies.

• Security exchange

CH 12 GDP and Growth

• 303• An economist uses real GDP rather than

nominal GDP to measure growth because real GDP reflects _____ more accurately than nominal GDP by using _____ prices.

• Output constant

CH 2 Competition

• 31 • ___-_____is the motivating force behind the

free market? • Self-interest

CH 13 Economic Challenges

• 348, 349• The _____ Curve can show the distribution of

income. • Lorenz

CH 13 Economic Challenges

What does the Lorenz Curve show about the distribution of income ?P 348, 349

The distribution of income was not completely equal.

CH 14 Taxes and Government Spending

• 360• To what category do a person’s earnings, the

dollar value of a good or service, the value of a property, and the value of a company belong?

• Tax bases

CH 14 Taxes and Spending

• 361• The kind of tax represented by the federal

income tax rate table is a _____ tax.

• Progressive

CH 14 Taxes and Spending

• 361• With a progressive tax, the tax rate _____ with

the amount of ____ income.

• Rises taxable

CH 15 Fiscal Policy

• 406• The _____ _____ effect influences businesses

because deficit spending by the federal government makes it harder for private businesses to borrow.

• Crowding out effect

Ch 15 Fiscal Policy

• 432• Once the government has determined a new

monetary or fiscal policy, the policy takes some amount of time to become effective. This delay is known as the _____ _____.

• Outside lag

CH 17 International Trade

• 444• A nation can gain a comparative advantage is

by producing a _____ with a _____ opportunity cost.

• Product lower

CH 18 Economic Development

• 471• When considering developed nations and less-

developed nations, one should remember that “development” refers to a nation’s ability to _____, _____ and _____ its people.

• feed, clothe, shelter

CH 18 Economic Development

• 479• A consequence of rapid population growth for

less-developed countries is that to maintain its current level of _____, a country must increase its _____.

• Development employment