What Is Paradox Of Value In Economics Flashcards

The situation in which some necessities have little value while some non-necessities have a much higher value is known as paradox of value Manufactured goods needed to produce other goods and services are called capital goods To arrive at an economic decision, a decision-making grid may be used to evaluate alternative choices of action Division of labor is a charcteristic of assembly line production The study of economics is important because it enables us to become better decision makers The dollar value of all final goods and services and the most comprehensive measure of a country's total production output is Gross Domestic Product (GDP) The Money used to buy the tools and equipment needed for production is known as financial capital An example of a market economy is the United States Which of the following is NOT considered an economic and social goal? economic effeciancy, economic growth, price stability, entrepreneurship entreprenuership Which group of people ultimately determines the products that a free enterprise economy produces? consumers The United States can best be described as having a modified private enterprise system All of the following are characteristic of a command economy EXCEPT: it can change directions drastically in a brief period of time; there is much uncertainty; it is not designed to meet the wants of consumers; it provides workers with few incentives to work hard there is much uncertainty A market economy does not provide for everyone's basic needs The minimum wage is an example of a federal law that supports economic equity The concept of voluntary exchange means people freely and willingly engage in market transactions The government's role in a mixed economy is that it is the regulator charged with preserving competition This regulates the sale of stock in a corporation Securities and Exchange Commission A merger of corporations involved in different steps of manufacturing or marketing is known as a vertical merger Non-profit organizations may provide goods and services to members The local chamber of commerce works to promote the welfare of its members and the community In a general partnership partners usually draw up legal papers called articles of partnership An advantage of a corporation is that owners have limited liability in debt All of the following are examples of the government playing a direct role in the economy EXCEPT: public utility regulation, police and fire protection, court systems, libraries public utility regulation Which of the following is NOT a nonprofit organization? multinational, producer cooperative, chamber of commerce, labor union multinational In its direct role as an economic organization, American government owns and manages public utilities An increase in the price of milk causes a decrease in the demand for cereal. The two products are complements Advertising, fashion trends, and new product introductions serve to create consumer demand Because a modest price increase has little or no effect, the demand for the product is inelastic A business doubled the price of a poduct in order to increase profits. Which of the following senarios might have occured? A dramatic decline in revenues demonstrated the elasticity of the product. A demand schedule shows a listing of the various quantities demanded of a particular product at all prices that might prevail in the market Consumers' willingness to replace a costly item with a less costly item is an example of the substitution effect When a manufacturer of pain medication reduced the price of medication by 30%, profits declined by almost exactly 30%. Deman for the product is unit elastic All of the following can change the market supply curve EXCEPT: the cost of labor; the expectation that prices are about to increase; a change in the demand for the product; the numbers of sellers offering the product a change in the demand for the product The supply of a product normally decreases if taxes on the product increse When employees are getting in each other's way, the firm is operating in Stage II of production The level of Profit-maximizing output is reached when marginal cost is equal to marginal revenue When producers offer fewer products for sale at each and every price, the supply curve has shifted to the left Many businesses are engaging in e-commerce because fixed costs are minimal Profits will be maximized when marginal revenue equals marginal cost Which of the following is NOT a reason why prices effectively perform the allocation function? Prices remain suprisingly stable despite unexpected events In a market economy, a high price is a signal for producers to supply more and consumers to buy less At a given price, a surplus occurs when the quantity supplied is greater than the quantity demanded The federal minimum wage law demonstrates a societal choice for economic equity over effeciency When economic or political conditions are unstable the demand for gold increases Prices enable a market to adjust to unexpected events by adjusting consumption and production All of the following are charcteristics of allocation by rationing EXCEPT: lack of fairness, high administrative cost, effeciency, diminished incentive for workers effeciency If a competitve market is at equilibrium, and there is a sudden increase in demand, than a temporary shortage will occur and the price will increase The theory of competitve pricing is a set of ideal conditions and outcomes Deficiency payments are part of a federal program to assist farmers A monopoly that is based on the ownership or control of a manufacturing method, process, or other scientific advance is a technological monopoly A decrease in competition within an industry can result in a firm wielding economic and political power The Sherman Antitrust Act outlawed restraints and monopolies that hinered trade Under perfet competition, no seller sells a product about the prevailing market price Mergers and acquisitions might result in inadequate competition The Clayton Antitrust Act outlawed price discrimination Indirectly, the government has improved the quality of information available to consumers through its support for the internet the Fair Labor Standards Act established a federal minimum wage Workers who have the skills to operate machines and who require a minimum amount of training are semiskilled labor The theory that wages are based on the supply and demand for the worker's skills is the traditional theory of wages All of the following can be used to establish more equal pay between man and women EXCEPT the: Civil Rights Act of 1964; Fair Labor Standards Act, set-aside contracts, Equal Pay Act of 1963 Fair Labor Standards Act The National Labor Relations Act established the right of unions to collective bargaining When Labor and management ask a third party to collect information about a dispute and present a non-binding recommendations, they are using fact-finding Workers with knowledge-based education and managerial skills are professional labor Which of the following statements about the minimum wage is NOT accurate? when expressed as a percentage of the average manufacturing wage, the minimum wage reached its peak in 1988 The invisible barrier that hinders women and minorities from advancement up the corporate ladder is known as the glass ceiling