Economics Ch.6 & 12

Economics Ch.6 & 12 Prices act as a signal to change behavior as conditions change. What happens w/ rising prices? - Buyers buy less, producers produce more In a competitive (free market) economy, prices - Are neutral Prices adjust to unforeseen events, such as natural disasters and wars, because - Prices are flexible in a free market Which is not one of the advantages of a pricing system? - When used w/ rationing, it provides everyone's basic needs Which of these is not found in a rationing system? - Increased incentive for producers Minimum wage laws are an example of what kind of government intervention in the market? - Price floor Prices give information to buyers and sellers by putting a ___________ on a product - monetary value ______________ signal buyers to buy less and sellers to produce more - high prices In a ____________ market, prices are neutral, not favoring either buyers or sellers - competitive Prices are a result of ___________ both buyers and sellers can live with - compromises Prices in a market economy are ___________ in response to unforeseen events like natural disasters. - flexible In a free market, there is no cost to ___________ prices - administer ____________ occurs in a command economy when a central authority decides each person's "fair share." - rationing One problem with rationing is lost ______________ to produce - incentive Dissatisfaction with shares in a rationing system leads to the creation of a ______________________ - black market The minimum wage is an example of government intervention in the form of a _________________ - price floor When the government intervenes to set the maximum legal price for a or service, it is instituting ___________________ - price ceiling The article about Cuba's rationing stated a person can receive a jail sentence of 18 years for illegally ________________ - slaughtering a cow One of the problems with Cuba's economy is the ___________ the U.S. has maintained since the communist revolution, led by Fidel Castro - embargo ____________________ is the branch of economics that deals with individual units and their decisions - microeconomics __________________ is the branch of economics that deals with the economy as a whole, using aggregate measures of output, income, prices and employment - macroeconomics A key measurement in macroeconomics is the ______________________, figured by multiplying all goods and services produced in a 12-month period by their prices, then adding them up - gross domestic product This nation has the world's second- largest economy, behind the united states. - China To gain a better understanding of the relative wealth of countries, economists divide their total economic output by each country's population. This results in a measurement called _________________ - per capita One category of goods that are excluded from calculating the nation's output is the sale of _____ goods - used Activities that are not reported for legal or tax collection purposes form what is called the ___________ - underground Economists comparing a nation's output during different years have to keep in mind the effect of __________ - inflation To compare a nation's output during different years, economists use a ______________ for reference - base year When breaking down a country's GDP, the Net Domestic Product minus depreciation equals the ________________ - national income In the equation representing the four sectors of an economy, the (X-M) stands for ___________ minus ____________ - exports, inports In the equation representing the four sectors of economy, the letter I stands for __________________ - investments Economists care about the size and makeup of a nation's population because it is the nation's primary source of ___________ - labor The size and makeup of a population is known as its ________________ - demographics The constitution requires the U.S. government to take a ____________ every 10 years - Census The _____________ ratio is the number of children and elderly people in the population for every 100 people in the working age bracket of 18 to 64 years old - dependency One of the three major factors used to forecast population growth is net ______________ - immigration One of the three major factors used to forecast population growth is the ________________ rate - fertility One of the three major factors used to forecast population growth is life _________________ - expectancy The The benchmark used to evaluate the income people receive is the __________________ - property threshold The ______________ shows how actual income distribution differs from equal distribution - Lorenz curve Government programs to help the needy come under the general heading of _____________ - welfare The _____________ income tax is a proposed type of tax that would make cash payments to certain groups below the poverty line. While not in use today the proposal is attractive because cash payments would take the place of existing welfare programs rather than supplementing them. - negative