Business Economics – Questions With Step By Step
Solutions
Save
Terms in this set (67)
The study of how humans make decisions in the face of
What is economics?
scarcity.
A condition where human wants for goods and services
What is scarcity?
exceed the available supply.
What must be given up to obtain something that's
What is opportunity cost?
desired.
The separation of work required to produce a good or
What is division of labor?
service into tasks performed by different workers.
When workers or firms focus on tasks for which they
What is specialization? have an advantage within the overall production
process.
What are economies of As production increases, the average cost of producing
scale? each unit declines.
The study of individual agents within the economy, such
What is microeconomics?
as households and businesses.
The study of the economy as a whole, focusing on goals
What is macroeconomics?
like growth and low unemployment.
Policies that affect bank lending interest rates and
What is monetary policy? financial capital markets, conducted by a nation's
central bank.
Government spending and tax policies determined by a
What is fiscal policy?
nation's legislative body.
What defines a market Decisions about products and prices are determined
economy? through the interaction of supply and demand.
A market where the government does not intervene in
What is a free market?
any way.
, An economy where economic effort is directed by a
What is a planned
ruler or ruling class, with resources owned by the
economy?
government.
An economic system that has characteristics of more
What is a mixed economy?
than one economic system.
What role does It evolves economies into mixed economies, increasing
globalization play in interdependence among businesses and workers across
economic systems? borders.
What are the four stages of Expansion, peak, contraction, and trough.
an economy?
How do economists By assessing various indicators such as GDP,
evaluate the health of an unemployment rates, and inflation.
economy?
What is market equilibrium? The point where supply equals demand for a product.
A situation where the quantity supplied exceeds the
What is a surplus?
quantity demanded.
A situation where the quantity demanded exceeds the
What is a shortage?
quantity supplied.
How do individual Individuals must choose between different options,
decisions involve each with its own cost of foregone alternatives.
opportunity cost?
How do societal decisions Societies must allocate limited resources among
involve opportunity cost? competing needs and desires.
What is the opportunity Both cities incur the same opportunity cost of
cost for drivers in Los $3,750,000 due to traffic delays.
Angeles and Boston?
What does Smith's theory of A worker skilled in engineering yields economic output
division and specialization that is sub-optimal if employed in something other than
of labor imply? engineering-type functions.
In the context of two farms Farm A should fully specialize in the production of eggs
producing eggs and milk, and trade with Farm B for milk.
what should Farm A do to
maximize output?
What is demand in The amount of a good or service consumers are willing
economics? and able to purchase at each price.
Solutions
Save
Terms in this set (67)
The study of how humans make decisions in the face of
What is economics?
scarcity.
A condition where human wants for goods and services
What is scarcity?
exceed the available supply.
What must be given up to obtain something that's
What is opportunity cost?
desired.
The separation of work required to produce a good or
What is division of labor?
service into tasks performed by different workers.
When workers or firms focus on tasks for which they
What is specialization? have an advantage within the overall production
process.
What are economies of As production increases, the average cost of producing
scale? each unit declines.
The study of individual agents within the economy, such
What is microeconomics?
as households and businesses.
The study of the economy as a whole, focusing on goals
What is macroeconomics?
like growth and low unemployment.
Policies that affect bank lending interest rates and
What is monetary policy? financial capital markets, conducted by a nation's
central bank.
Government spending and tax policies determined by a
What is fiscal policy?
nation's legislative body.
What defines a market Decisions about products and prices are determined
economy? through the interaction of supply and demand.
A market where the government does not intervene in
What is a free market?
any way.
, An economy where economic effort is directed by a
What is a planned
ruler or ruling class, with resources owned by the
economy?
government.
An economic system that has characteristics of more
What is a mixed economy?
than one economic system.
What role does It evolves economies into mixed economies, increasing
globalization play in interdependence among businesses and workers across
economic systems? borders.
What are the four stages of Expansion, peak, contraction, and trough.
an economy?
How do economists By assessing various indicators such as GDP,
evaluate the health of an unemployment rates, and inflation.
economy?
What is market equilibrium? The point where supply equals demand for a product.
A situation where the quantity supplied exceeds the
What is a surplus?
quantity demanded.
A situation where the quantity demanded exceeds the
What is a shortage?
quantity supplied.
How do individual Individuals must choose between different options,
decisions involve each with its own cost of foregone alternatives.
opportunity cost?
How do societal decisions Societies must allocate limited resources among
involve opportunity cost? competing needs and desires.
What is the opportunity Both cities incur the same opportunity cost of
cost for drivers in Los $3,750,000 due to traffic delays.
Angeles and Boston?
What does Smith's theory of A worker skilled in engineering yields economic output
division and specialization that is sub-optimal if employed in something other than
of labor imply? engineering-type functions.
In the context of two farms Farm A should fully specialize in the production of eggs
producing eggs and milk, and trade with Farm B for milk.
what should Farm A do to
maximize output?
What is demand in The amount of a good or service consumers are willing
economics? and able to purchase at each price.
