UARK Econ 2143 exam #1 Questions AND Correct Answers
A point inside the production possibilities frontier is -
✔✔feasible, but not efficient
absolute advantage - ✔✔the ability to produce a good using
fewer inputs than another producer does
Adam Smith's "invisible hand" - ✔✔Households and firms
interacting in markets
Act as if they are guided by an "invisible hand"
Leads them to desirable market outcomes
Adam Smith's "invisible hand" - ✔✔the ability of free markets
to reach desirable outcomes, despite the self-interest of
market participants
comparative advantage - ✔✔the ability to produce a good at a
lower opportunity cost them another producer
competetive market - ✔✔a market in which there are so many
buyers and sellers that each has a reliable impact on market
price
, compliments - ✔✔two goods for which an increase in the
price of one leads to a decrease in the demand for the other
consumer surplus - ✔✔difference in price and willingness to
pay
Corollary: Government intervention - ✔✔Prevents the
invisible hand's ability to coordinate the decisions of the
households and firms that make up the economy
demand schedule - ✔✔a table that shows the relationship
between the price of a good and the quantity demanded
econmoics - ✔✔the study of how society manages its scarce
resources
Economics is best defined as the study of - ✔✔how society
manages its scarce resources
Efficiency - ✔✔Society is getting the maximum benefits from
its scarce resources
A point inside the production possibilities frontier is -
✔✔feasible, but not efficient
absolute advantage - ✔✔the ability to produce a good using
fewer inputs than another producer does
Adam Smith's "invisible hand" - ✔✔Households and firms
interacting in markets
Act as if they are guided by an "invisible hand"
Leads them to desirable market outcomes
Adam Smith's "invisible hand" - ✔✔the ability of free markets
to reach desirable outcomes, despite the self-interest of
market participants
comparative advantage - ✔✔the ability to produce a good at a
lower opportunity cost them another producer
competetive market - ✔✔a market in which there are so many
buyers and sellers that each has a reliable impact on market
price
, compliments - ✔✔two goods for which an increase in the
price of one leads to a decrease in the demand for the other
consumer surplus - ✔✔difference in price and willingness to
pay
Corollary: Government intervention - ✔✔Prevents the
invisible hand's ability to coordinate the decisions of the
households and firms that make up the economy
demand schedule - ✔✔a table that shows the relationship
between the price of a good and the quantity demanded
econmoics - ✔✔the study of how society manages its scarce
resources
Economics is best defined as the study of - ✔✔how society
manages its scarce resources
Efficiency - ✔✔Society is getting the maximum benefits from
its scarce resources
