Quiz Questions
The production possibilities frontier is a graph that shows
the various combinations of output that an economy can possibly produce given the available factors of production
Opportunity Cost
What is.. Whatever must be given up to obtain some item
What did President Gerald Ford refer to inflation as
Public Enemy Number One
If the demand for a good falls then the food is called a
Normal good
Future Value Equation
Future Value equals Present Value times 1 plus the interest rate to the power of the number of years.
Specialization in trade allows
What is the ability to consume more goods than we otherwise would be able to
Sunk Cost
What is….A cost that has already been incurred and that cannot be recovered
Albert Einstein referred to compounding as
” The greatest mathematical discovery of all time”
Factors of Production
Inputs into the production process
Present Value equation
Present Value Equals Future Value multiplied by one divided by 1 plus the interest rate to the power of the number of years
Real GDP is the yearly production of final goods and services valued at
Constant Prices
Marginal Change
What is… A small incremental adjustment to a plan of action
John Clapham once said Economic History is the
Most fundamental Branch of history
Normative Statements are
Claims about how the world should be
Consumer price index formula
Consumer price index in current period equals cost of market basket in current period divided by cost of market basket in base period multiplied by 100
Crowding out occurs when investment declines because
What is..A budget deficit makes interest rates rise
Law of Supply
What is… The claim that all other things being equal the quantity of a good rises when the price rises
What did B. R. Ambedkar say about ethics and economics coming into conflict
Victory is always with economics
Making a rational decision ”at the margin” means that people
Compare the marginal costs and marginal benefits of each decision
Nominal GDP
Multiply the Deflator by the Real GDP and divide that by 100
The idea of insurance
What is.. To share risk
Law of Demand
What is… The claim that all other things being equal, quantity demanded of a good falls when the price rises
Albert Einstein also referred to economic anarchy of capitalist society is
The real source of evil
If scientists discover pepperoni pizza, slows aging, what would happen to the equilibrium price and quantity of pepperoni pizza
Equilibrium Price AND Quantity would increase
Nominal GDP divided by Real GDP times 100