Micro
If there is more demand than supply, do we have a shortage or surplus?
Shortage
What do we most commonly use to measure the size of an economy?
GDP or Gross Domestic Production
What is comparative advantage?
Ability to produce a good or service for a lower opportunity cost than a competitor or another country
What's the main source of government income in the United States?
Taxes or Income tax accepted
What is opportunity cost?
Potential loss from a missed opportunity—the result of choosing one alternative and forgoing another
At what point should a firm sell? Describe a location on a firm graph.
Where MR = MC
What are the components of GDP using the expenditure approach?
Consumption, investment, government spending, exports, and imports (net exports also accepted)
What is absolute advantage?
A producer can provide a good or service in greater quantity for the same cost
What major event in the 18th and 19th century spurred economic growth in the U.S.?
Industrial Revolution
Which European country doesn't use the euro as its main currency?
Britain
Does a binding price ceiling create a shortage or a surplus?
Surplus
Name the four parts of the business cycles in order, starting at any point in the cycle.
Peak, recession, trough, and expansion
What is the difference between a tariff and a quota?
Tariff provides revenue, quota does not
In what year did the Great Recession, the most recent world-wide economic downturn, start?
2007
What is an inferior good?
Demand drops when income rises
At what point should a firm shut down in the short-run?
When price falls below AVC
What types of unemployment still exist under full employment?
structural and frictional unemployment
When should a country trade with another country for a product?
When the other country has a comparative advantage in the production of the good OR when the other country can make the good at a lower opportunity cost
Who is the current FED Chair?
Jerome Powell (Just last name is acceptable)
Name a group that would benefit if inflation is lower than expected
Possible answer: Savers, Lenders
NOT correct: Employers, Borrowers
Name three characteristics of monopolistic competition.
Possible answers: Many buyers and sellers, Slightly differentiated products, Low barriers to entry and exit, Potential supernormal profits in the short term, Normal profits in the long-run, Imperfect information, Non-price competition
If the economy has high unemployment rates, should the government take action to increase or decrease the AD?
Increase
If the interest rate for US dollars rises, what will happen to the value of euros compared to the value of US dollars?
Euros will depreciate (value will get lower)
Which country has the highest GDP per capita as of December 2020?
Luxembourg
What is a moral hazard and give an example?
Lack of incentive to guard against risk where one is protected from its consequences.
Examples: Insurance