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2012-02-20 18:37:40

review test 1 CH.1-7
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  1. Resources are?
    scarce for household and scarce for economies.
  2. Economics is the study of ?
    how society manages its scarce resources
  3. The opportunity cost of an item is ?
    what you give up to get that item.
  4. A rational decision maker takes an action only if the ?
    marginal benefit is greater then the marginal cost
  5. which is the most accurate statment about trade?
    trade can make every nation better off
  6. trade is ?
    allows specialization which reduces costs.
  7. the invisible hand refers to ?
    how the decision of households and firm have over the economy
  8. productivity is define as the ?
    Amount of goods and services produced from each unit of labor input.
  9. An increase in the overall level of prices in an economy is referred to as?
  10. In economics captial refers to ?
    buildings and machines used in the production process
  11. in the simple circular flow diagram houseshold
    own the factors of productions
  12. The frderal reserve?
    Sets the nation's monetary policy.
  13. the production possibilities frontier illustrates
    the combinations of output that an economy can produce
  14. the most obvious benefit of specialization and trade is that they allow us to ?
    consume more goods than we other wise would be able to consume
  15. comparative advantage is related most closely to which of the following ?
    opportunity cost
  16. trade can make everybody better off becauseit?
    allows people to specialize according to comparative advantage
  17. by definition exports are?
    goods produced domestically and sold abroad .
  18. trade between countries ?
    Allows each country to consume at a point outside its production possibilities frontier
  19. A country that currently does not trade with other counties could benefit by?
    not restricing trade
  20. the forces that make market economies work are ?
    supply and demand
  21. the supply of a good or service is determined by?
    those who sell the good or servies
  22. A market includes
    both buyer and seller