Economic Theory
Economic Systems
Opportunity Cost
Comparative Advantage & Production Possibilities
100
The basic problem facing all economies
Scarcity
100
A market where prices are set only by supply and demand
Free market
100
Would the stress from going to school be an opportunity cost of attending? (Y/N)
No
100
An increase in available resources will cause a PPC to shift ________ (outward/inward)
Outward
200
What is one "thing" that is flowing in the circular flow model?
Resources/products/money
200
Stalinist Russia was this type of economy
Command
200
The country decides to increase production of Good x from 20 units to 40 units. What is the opportunity cost of this decision?
3 units of Good y
200
The PPC shows how much of two resources are needed for production (true/false)
False
300
An activity or or other intangible benefit that is paid for by a customer
Service
300
Adam Smith described free markets as being controlled by a(n) _________ hand
Invisible
300
If you could make $20/hr mowing lawns, what is the opportunity cost of spending 2 hours studying?
$40
300
Being able to produce something at lower opportunity cost than other producers
Comparative advantage
400
The goal of companies is to maximize their _____
Profit
400
A type of economy where the government owns all property
Command
400
This is a cost that you have paid and cannot get back
Sunk cost
400
Being able to produce something using less resources than other producers
Absolute advantage
500
The four factors of production
Land, Labor, Capital, Entrepreneurship
500
Lithuania is this type of economic system (Hint: it's the same as most countries in the world)
Mixed
500
Equation to calculate per-unit opportunity cost
(Total cost)/(#of units)
500
The only way to consume more goods in your country than the country can produce
Trade