EXAM REVIEW

Externality Question:

WHAT is an externality?

Answer:

An externality  is an unintended side effect of an action that affects someone not involved in the action.

Externality Question:

An externality can be:a.       Positiveb.       Negativec.         Both a. and b.d.       None of the above

Answer:

c.         Both a. and b.

Externality Question:

Give an example of a negative externality.

Answer:

Could be someone getting fired or losing money so they do not spend anymore, causing other businesses to suffer.

Externality Question:

Give an example of a positive externality.

Answer:

Could be someone getting a raise or a new job and spending more money, benefitting other businesses

Externality Question:

Why would the government try to prevent negative externalities?

Answer:

Because one action can cause ripples, greatly hurting the economy.

Question:

Name the four factors of production and describe the purpose of each one.

ANSWER:

Natural Resources: material to produce goods 

Labor: helps to produce goods 

Capital: satisfies indirectly by helping to produce consumer goods

 Entrepreneurs: introduces new products and improves

processes

Question:

How are capital goods different from consumer goods?

ANSWER:

Capital goods satisfy indirectly by helping produce consumer goods.

Consumer goods satisfy directly by providing people with their needs and wants

 

Question:

What is the definition of labor?

ANSWER:

Human resources- or whoever works to produce

Question:

True or false: Entrepreneurs produce natural resources?

ANSWER:

False

Question:

Natural Resources are:                                         

     A) Factors of production              B) Materials used to produce             C) The result of human labot

D) None of the aboveE) All of the above      

                                                                        

   

ANSWER:

B, materials used to produce

Question for what, how, and for whom do we produce:

a) During a Surplusb) When we have an Economic Troughc) When there is Scarcityd) both a & be) both b & c

These questions and answers are on slides 22-31. Just saying

When does a country have to face these decisions?

ANSWER:

C: When there is a Scarcity

Question:

True Or False: We make these choices to help give us our wants

ANSWER:

False. We do this to help us get our needs. Not wants.

Question:

True or False: Countries make these decisions based on the state of their economy

ANSWER:

True

Question:

Why would a country want to give their citizens the needs instead of the wants?a) Wants make the citizens upset b) Needs help humans survivec) wants make people happyd) Needs are necessary, but wants are thing that are uneccesary

ANSWER:

D: Needs are necessary, but wants are thing that are uneccesary

Question:

How does a country decide whom to produce these products for?a) richest to poorestb) poorest to richestc) most known to least knownd) nicest to meaneste) most needy to least needyf) none of the above

ANSWER:

E: Most needy to least needy

Question:

What is a Good?

ANSWER:

A good is a product

Question:

What is  a service? Is it...a. laborb. a pocc. work done by someone elsed. none of the above

ANSWER:

The answer is c. Work done by someone else.

Question:

What is Human Capital? Is it...a. laborb. anyone who works to produce goodsc. a and bd. people

ANSWER:

The answer is C.

Question:

How are Bourgeoisie and Proletarait different?

ANSWER:

Bourgeoisie is the class that is primarily concerned with property values. Proletarait is the working class or wage-earning class.

Question:

What is Capitalism?

ANSWER:

Capitalism is the economic system in which citizens own and use the factors of prodution in order to seek a profit.

Question: 

What is the aspect of socialism that has to do with factory owners enjoying profits at the expense of the workers?

 

ANSWER: 

Capitalism is unfair to industrial laborers, because the factory owners enjoy profits earned at the expense of the workers

Question: 

What is the aspect of socialism that talks about options that are NOT private ownership, and what are the two different options and thier

definitions/examples?

ANSWER:  

Instead of private ownership of the factory, there should be

collective ownership. Collective ownership can take two forms:Communal ownership- All of the laborers in a factory own and operate it together

  State ownership- The state owns the means of production, in the interests of its citizens

Question: 

What aspect of socialism has to do with the wealth of a society?

ANSWER: The wealth of a society is distributed equally, based on some plan or formula.

Question: A socialist economic system would ______________.

 

ANSWER: 

A socialist economic system would transform human nature.

Question: 

Which of these is NOT one of the aspects of socialism?a) Capitalism is unfair to industrial laborers, because the factory owners enjoy profits earned at the

expense of the workers.b) The wealth of a society is distributed equally, based on some plan or formula.

c) Instead of collective ownership, there should be private ownership.d)A socialist economic system would transform human nature.

ANSWER: 

 c) Instead of collective ownership, there should be private ownership.

Question:

True or False:  Societies have to decide what, how, and for whom they are going to produce.  

ANSWER:

False.  PRODUCERS have to decide these

Question:

True or False:  When producers decide what they are going to produce do they decide for whom they are going to produce products for?

ANSWER:

False

Question:

What leads to societies having to make choices

ANSWER:

Scarcity

Question:

What leads to scarcity?

ANSWER:

Unlimited wants and limited resources

Question: Adam Smith's economic idea called Laissez- faire directly translates to _____________.  a) "non- inference"b) "to be solitary" c) "to let alone"d) "lazy idependence"

ANSWER: c) "to let alone"

Question: 

Describe the "invisible hand" theory.

ANSWER: 

The invisible hand guides people who work on their own or work for their own self interest.

Question: Why is laissez- faire economics important? a) It states that people who are unemployed can be lazy while out of work  b) It keeps out the goverment from interfering in the market place c) Capitalsm does not work unless you have laissez- faire economics, because no one would make money d) It starts major buissnesses by increasing prices

ANSWER: b) It keeps out the goverment from interfering in the market place  

Question: 

Would Adam Smith be a capitalist or a soicalist? Explain.

ANSWER: 

He would be a capitalist because the invisible hand involves starting your own

buissnes.

Question: 

What does it mean that the goverment's role  is confined to te actions necessary to ensure

free competition?

ANSWER: 

This means that the only time the goverment can interfere is to

check on the competition

Question: Name the two ways the government controls the forces of supply and demand

ANSWER: Price ceiling and price floor

Question: give one example of a price ceiling

ANSWER: controled rent

Question: give one example of price floor

ANSWER: minimum wage

Question: what is minimum wage

ANSWER: the lowest legal wage a worker can be paid

Question: Why does the government supply price

ceilings/floors

ANSWER: they believe the forces of supply and demand

are unfair sometimes

1.Question:What is a merger

 when two flavors combine to be the ultimate Rita's ice cream cone

a device used to connect your bakugan battle brawlers

a combination of two or more companies to form a single business

When one company buys another company or puts it out of business and owns the whole

market

ANSWER:3.a combination of two or more

companies to form a single business

Question: What is an anti-trust law?1.      laws that eliminates trust funds2.      laws that put power into the hands of publicly shared businesses3.      laws that control monopoly power and promote competition4.      Laws that eliminate “market burglary”

 

 Answer:3.      laws that control monopoly power and promote competition

 

 Question:

What is a monopoly?a)      A board game

b)      A market where there is an absence of competition in one given type of service/good

c)       A market where the price is too high because of too many providers

d)      A market with 7 or more businesses that drops the prices so low as to cause economical problems

  

ANSWER: A market where there is an

absence of competition in one given type of service/good

 

Question:  Which 2 of the following 4 are anti-trust acts?a) The Sherman actb) The Cruise actc) The Clayton actd) The foundation act

Awnser a) The Sherman act

  c) The Clayton act