Survey of Economics Exam 1, Litzinger RMU Exam Questions and Answers

Survey of Economics Exam 1, Litzinger RMU Exam Questions and Answers In economic theory and analysis, cost of production that do not change when the rate of output is altered, eg., the cost of basic plant and equipment are called - Answer-fixed costs In economic theory and analysis, goods and services sold to foreign buyers are called - Answer-exports In economic theory and analysis, resource inputs used to produce goods and services, eg., land, labor, capital, entrepreneurship, are called - Answer-factors of production The central problem of economics is the: - Answer-Scarcity of resources relative to human wants. People benefit by participating in the market because: - Answer-It facilitates specialization and increased consumption. In economic theory and analysis, total cost divided by the quantity produced in a given time period is called - Answer-average total cost (ATC) In economic theory and analysis, the total value of goods and services produced within a nation's borders in a given time period is called the - Answer-gross domestic product (GDP) For consumers, most market activity can be explained by the goal of - Answer- Maximizing happiness. In economics, what is the best example of capital? - Answer-A computer used by a lawyer to prepare legal documents. In economic theory and analysis, the difference between total revenue and total cost is called - Answer-profit Market demand is the: - Answer-sum of all individual demands for a product in a given time period Societies must address the question of WHAT to produce because: - Answer-we can't produce all the goods and services we want Per capita GDP is the most practical way to: - Answer-Analyze the growth rate of the economy over time. In economic theory and analysis, the statement "the marginal utility of a good declines as more of it is consumed in a given time period" is called the - Answer-law of diminishing marginal utility Not a factor of production: Land, wages, labor, capital? - Answer-Wages The value of output produced in the United States in current prices measures: - Answer- Nominal GDP In economic theory and analysis, the value of all resources used to produce a good or service, opportunity cost, is called: - Answer-economic cost Which of the following is not included in the U.S. GDP: - Answer-Anything not produced in the US, e.g. Toys produced by a U.S. firm located in China In economic theory and analysis, an economy that uses both market and non market signals to allocate goods and resources is called a: - Answer-Mixed economy