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