Midterm Review Honors

The added benefit received from the purchase or use of the next unit of a product Marginal utility

What does a production possibilities frontier demonstrate? Total production combination of any two products The opportunity cost of increasing production of one in terms of the floss of the other

The arrangement of labor so that each worker is doing fewer tasks than before: Division of flavor

Increased productivity What does specialization lead to? Increased productivity

Where is labor bought and sold? Factory market

What is the key benefit of the free enterprise system characteristic of private property rights? Collateral for entrepreneurs to qualify for bank loans to start new businesses

What type of business structure has unlimited life? Corporation

The private ownership of the factors of production: Capitalism

If the price of a product increased, what would happen to the demand of those things considered its compliment? Shift

What is the likely elasticity of demand for cocaine? inelastic

Of what business type is double taxation is a disadvantage? Corporation

Under what conditions of demand would a monopoly be the most free to raise prices? Inelastic demand

What 4 benefits do entrepreneurs provide? Jobs, tax receipts, products, philanthropy

Which economic system has the lowest standard of living? Traditional

Which economic system fails most to provide for the poor and sick? Market

What happens to market price when demand increases? Price increases

What happens to total revenue when prices increase in an elastic market? TR falls

What’s the elasticity of a product when its price increases 17% and the quantities demanded decreases 8%? Inelastic

The fundamental economic issue that requires societies to make production decisions: Scarcity

You go to a grocery store to buy eggs. They’re out. Why? Shortage (the store didn’t order enough to meet demand)

A fall in the general price level: Deflation

As prices increase, consumers buy less. What does this reflect? Law of Demand

The purchase of a product is important and has substitutes that are not very pleasing. What’s its elasticity of demand? Inelastic

If a company is able to cut costs, what will happen to the supply of products it sells? Supply more

The worth of something as measured by its price is called: Value

What is the economic system that provides the most consumer satisfaction? Market

Which economic goal reflects the idea that Americans expect government to provide help in extreme cases? Economic stability

What is the study of the production, use, and allocation of scarce resources that have alternative uses Economics

Which business type can raise the quickest capital? Corporation

What would the likely supply elasticity be for ski resorts? Inelastic

What is the elasticity of supply of the following graph? $4 $2 1 2 Unit Elastic

Earth’s resources are finite, even though man’s desire to use them in a variety of ways is almost infinite. This condition is known as: Scarcity