Econ test study guide

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jfindley
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281581
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Econ test study guide
Updated:
2014-08-28 16:54:01
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econ
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  1. What is the basic problem in economics?
    scarcity
  2. What does it mean to have scarce resources?
    unlimited wants and limited desires
  3. What are the four factors of production?
    • land 
    • labor
    • capital
    • entrepreneurs
  4. Give five examples of land?
    natural gas, soil, water, trees
  5. Give 3 examples of labor?
    • animal
    • human 
    • machine
  6. What are captial goods?
    goods that you need to make other goods
  7. What are some strategies for allocation of resources?
    • Add taxes 
    • prohibit use
    • leave things the way they are
    • raise prices for everyone
    • markets and price system
    • democratically 
    • lottery
    • first come first serve
  8. Why does an entrepreneur go into business?
    to make a profit
  9. What is meant by opportunity cost?
    • the cost of what you gave up in your choice
    • cost of the second best thing
  10. Why does every decision have an opportunity cost?
    you always have choices, and everything has a price
  11. What are tradeoffs?
    alternative choices
  12. How do you make a rational decision?
    paced
  13. What does paced stand for?
    • p- problem
    • a- alternatives
    • c- criteria 
    • e- evaluate
    • d- decide
  14. What are criteria?
    things that matter to you in a decision
  15. How do people and businesses specialize?
    certain people do certain tasks
  16. Why does specialization increase productivity?
    • makes the best use of a particular worker's skill
    • decreases time it takes
  17. Why do people want to enagage in voluntary, non fradulant exchange?
    comparative advantage- you can produce it at a lower opportunity cost
  18. What are the 3 basic economic questions?
    • What to produce
    • how to produce it 
    • who gets the product
    • (how many to produce)
  19. Why must economic systems answer the 3 basic questions?
    to function
  20. What is a public good? Why does the govt provide them?
    • a commodity or service that is provided without profit to all members of a society
    • no one else will
  21. What are the economic functions of government? give examples of each
    • To provide the legal and social framework- lawsuits
    • establish a monetary system- federal reserve 
    • maintain competition- anti-trust laws 
    • providing public goods and services-highways, national defese
    • correct for extranalites- hurricanes, recalls
    • stablize the economy- reduce unemployment, control inflation
    • resdistribute income- medicare, free lunch
  22. What are the broad social goals of government?
    • economic freedom
    • economic efficancy 
    • economic equity 
    • economic growth
    • economic stablitity
  23. What happens when a government regulates industry?
    • they tell it what it can and cant do
    • can decrease productivity
  24. Why would a government deregulate an industry?
    to let people do things the way they want
  25. What does a ppf or ppc show?
    efficiency
  26. What does a production possibility shedule show?
    possibilities and opportunity cost
  27. On a ppf curve where is 100% efficancy? what happens to the left of curve? to the right?
    • on the line
    • wasting resources 
    • not sustainable
  28. What is productivity?
    how efficiently are you using your resources
  29. How can new equipment and tech. add to the growth of an econ?
    increase productivity and effiecnecy
  30. How can your investment in a higher education help you have a higher standard of living?
    • you are specialized 
    • make more money
  31. What is meant by standard of living?
    the degree of wealth and material comfort available to a person or community
  32. What might happen if gov invests in the health, education, and training of citizens?
    • increase productivity 
    • improve standard of living

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