MemoCard lernen mit System

Optimal consumer behaviour consists of three elements, namely _____, _____ and _____.

calculation, negotiation, expenditure

In a market system, most property resources are owned by__.

private individuals and firms

Emerging market countries typically display which of the following characteristics?

Evident economic growth rates, Volatile domestic markets, Dependence on global markets

Merits of the market system include __.

freedom, efficiency, incentives

The major role players in any economic system are households, business enterprise, the _____ and the _____ sector.

government, foreign

'Malawi ought to undertake policies to make its healthcare sector accessible to the majority of the population'.

normative

What is the main reason that people are driven to make choices in day-to-day life?

Scarcity

Laissez-faire capitalism is also referred to as _____ capitalism.

pure

Normative economics is concerned with __.

expressions of support for particular policies, value judgements about desirable goals or policies

Resources for which the quantity desired exceeds the quantity available are deemed to be __.

scarce

Under a command system, production goals and the division of output are decided__.

by the central planning board

Which of the following are central to positive economics?

Measurable or scientific statements about economic behaviour, Statements based on facts and empirical cause-and-effect relationships

Positive economics is concerned with __; normative economics deals with __.

what is; what should be

A market system allows for the private ownership of _____ , communicates through _____, and coordinates economic activity through _____.

capital, prices, markets

True or false: When you are revising for your economics exam, you typically have a choice about whether to revise for another half hour or watch television. This is not a decision about revising all of the time or watching television all of the time but one about marginal changes.

True

The notion that economic resources, goods and services are limited is known as __.

scarcity

Private property rights are important because__.

when coupled with the freedom to negotiate contracts, they allow individuals and businesses to use resources as they see fit

Inflation is a(n) __ topic.

macroeconomic

Consumer sovereignty refers to __.

the fact that consumers determine the types and quantities of goods and services that will be produced with the scarce resources in the economy

An aggregate is a collection of __.

specific economic units treated as if they were one unit

When comparing the additional or incremental costs versus additional or incremental benefits of a decision, one is engaging in __.

marginal analysis

Which of the following apply to the government's role under laissez-faire capitalism?

Establishing a legal environment, Protecting private property

In a market system, the goods and services produced at a continuing _____ will be produced, and those produced at a continuing _____ will not.

profit, loss

True or false: Economic models simplify reality so much that they have little to no value.

False

True or false: Positive economics encourages value judgments.

False

As a consumer, your ability to buy goods and services that best suit your preferences and budget is thanks to __.

freedom of choice

Economists develop theories of __ concerning individuals (consumers, workers) and institutions (businesses, governments) engaged in the production, exchange and consumption of goods and services.

behaviour

The major reasons for the collapse of the command system in countries like the Soviet Union were __.

lack of coordination

Creative destruction refers to the hypothesis that the creation of new products and production methods simultaneously _____ the market power of existing _____.

destroys, monopolies

Firms and resource suppliers, seeking to further their own _____ and operating within the framework of a highly competitive _____ system, will simultaneously, as though guided by an _____ hand, promote the public or social interest.

self-interest, market, invisible

Which of the following are determined by a society's economic system?

How to promote technological progress, Who gets goods that have been produced, What goods are produced, and how they are produced, How to accommodate change

According to Adam Smith, a curious unity between private interests and social interests would be established when firms and resource suppliers act out of __.

self-interest

Consumers' ability to pay the market price for goods and services will depend on the consumers' __.

income, preferences and the price of the goods

Optimal producer behaviour consists of three elements, namely _____, _____ and _____.

calculation, negotiation, expenditure

In command systems such as those of the Soviet Union, the route for getting ahead was__.

through participation in the Communist party

The discipline that studies the decision-making process of workers, households, firms and government on an individual basis, rather than as aggregates is known as __.

microeconomics

Complete the following definition of an economic system.

institutional, coordinating, scarcity, market, command

Recently, you decided to super-size your chips at a fast food restaurant. On the one hand, your decision considered the additional costs associated with the super-size, including the additional monetary, caloric and cholesterol intake, as well as the extra time you had to wait for those fries because a new batch was being cooked.

Marginal analysis

In a market system, output will be distributed to consumers based on their _____ and _____ to pay the existing market price for goods and services.

ability, willingness

True or false? Only market economies need to address the fundamental five questions.

False

Technology and capital goods progress differently in laissez-faire and command systems because__.

in command systems, government decides which technologies and capital to use. In laissez-faire systems however, there is a constant drive for innovation and accumulation

David has made R100 000 with his small business, and wishes to invest the full sum so that his money can grow. After reading up a bit more about his options, he has identified two alternatives which seem most suited to his needs.

He forfeits the 5% interest he could have earned

A major argument for the market system, which does not necessarily have to do with economics, is the system's emphasis on __.

personal freedom

What do we call a statement about economic behaviour that enables prediction of the probable effects of certain actions?

An economic theory, An economic principle

Which of the following economic measures are considered in macroeconomic analysis?

The level of prices in the economy, The unemployment rate, Balance of payments, National income

Which one of the following results from scarcity with respect to economic resources?

The production of limited goods and services

The economic decisions of different individuals are considered to be rational when these individuals

compare benefits and costs.

Which of the following statements are normative?

'The government ought to bail out distressed banks', 'The minimum wage should be increased', 'Supermarkets should lower their prices to compete more strongly', 'I would like the minimum wage to be abolished'

A positive statement is different from a(n) _____ statement in that it appeals solely to empirical facts.

normative

Governments will also form part of the flow between the markets in terms of _____ and _____ from and to households and firms.

taxes, services

True or false: Positive economics incorporates value judgements concerning what the economy should be like or what particular policy actions ought be recommended to achieve a desirable goal.

False

Which of the following are issues often explored in microeconomics?

Measuring total revenues of a firm or household, Measuring the prices of specific goods, The expenditures of a government entity, A firm's decision to hire more workers

Question

Answer(s)

Which of the following statements are positive in an economic sense?

The growth rate in Zimbabwe is higher than that in Zambia., If the government increases the minimum wage, the unemployment rate will rise, As the price of air fares falls, airlines experience a rise in quantity demanded

From the list below, select all statements that can be classified as normative.

Covid vaccines should be available free of charge to all citizens, Developed countries ought to assist developing countries in allocating funds to combat climate change

Suppose a business continuously earns enough from its sale of goods and services to more than cover its various input costs, including opportunity costs. This business is said to __.

make a profit

Consider two participants in an economy. Sharon lives as a tenant on a smallholding in the North-West province. She has no proper rental agreement with her landlord and is not sure whether her landlord will allow her to remain on the property for another year. Jabulani has spent the past decade working very hard to save enough money, with which she has just bought a house in a nature estate in Gauteng.

Jabulani

The most pressing reason for societies to develop economic systems is__.

to respond to the problem of scarcity

The five fundamental questions reflect the reality of _____ resources in a world of _____ wants.

scarce, unlimited

If Amahle gets 40 utils of satisfaction from two drinks and 50 utils from three drinks, what is the marginal satisfaction of her third drink?

10 utils

Entrepreneurs and business owners promote progress by __.

selling ownership shares, paying interest, purchasing capital goods

In a market system, production will be organized according to the combinations and ways that _____ the cost per unit of output.

minimize

Resources flow from _____ to _____ through the resource market, and products flow from _____ to _____ through the product market.

households, businesses, firms, households

Over the course of the last few years, frozen yoghurt outlet chain Wakaberry has been closing its chains as consumers spend more at Milky Lane, and profits decline. This phenomenon shows the working of __.

rand votes, consumer sovereignty

Why do market systems provide such strong incentives for technological advance?

Technological advances spread rapidly because rival firms must follow the lead of the most innovative firm, or suffer immediate losses, Improved production methods which allow firms to lower their product prices, allowing such firms to increase their sales and obtain economic profit at the expense of rivals, An entrepreneur or firm that introduces a popular new product will gain revenue and economic profit at the expense of rivals

When individuals take into account the costs and benefits of their economic decisions, these decisions are considered to be _____.

rational

Under a command system, businesses produce according to__.

government directives

A key driver of the market system lies in the fact that participants act__.

in their own self-interest

In which of the following ways can clearly defined property rights contribute to a market system?

Property rights encourage innovation by ensuring that intellectual property is protected, Property rights facilitate exchange and allow people to use their time in productive purposes, Property rights encourage investment, maintenance of property and economic growth

Economics is the study of how _____, _____ and _____ make choices, to optimize their level of satisfaction under conditions of _____.

individuals, businesses, institutions, scarcity

The market system acknowledges rands voting for _____ goods as well as for _____ goods.

capital, consumer

The main problems facing central planners operating command systems included__.

the fact that, without the profit motive, there was no reliable success indicator for industries, the fact that, in many cases, outputs from one industry served as the inputs for another industry

One of the main differences between emerging and developed markets lies in the fact that __.

developed nations export industrialized goods, while emerging markets are moving away from primary production

Which of the following are fundamental questions that every market economy must address?

What goods and services will be produced?, How will the system accommodate change?, How will the system promote progress?, How will the goods and services be produced?, Who will get the goods and services?

The market system requires that various economic units make choices. These are expressed in the markets through freedom of _____ and freedom of _____.

enterprise, choice

After completing her matric with six distinctions, Mala must choose what she will do next year. Her parents are eager for her to study chemical engineering. Mala, however, thinks that it would be best to take a year off in order to gain some practical experience and figure out what she really enjoys. A third option is for her to study economics, which she hears about often in the news, though she is not quite sure it would suit her personality. Mala also has an uncle who is a veterinarian, and has suggested that she train to be a veterinary nurse with him next year. Mala is a bit scared of dogs and isn't sure that she would want to do that.

The forfeit opportunity to take a year off.

Which of the following are aspects of the concept of rational self-interest?

Individuals look for and pursue opportunities to increase their utility or level of personal satisfaction, Individuals allocate their resources to maximize their satisfaction, Individuals weigh the costs and benefits of their decisions

The economic assumption that human behaviour reflects rational self-interest is based on the notion that individuals__.

weigh the costs and benefits of their decisions to maximize their utility

Which of the following are aspects of the concept of rational consumer behaviour?

The products and the quantities bought must provide the consumer with the highest possible total utility , Consumers think carefully before choosing the goods and services on which to spend their income, Consumers know the wants (needs) that they seek to satisfy, then identify the matching products and decide on the respective quantities that their budget constraints permit

The major role players in an economic system are __.

the government, business enterprises, households, the foreign sector

Positive economics avoids the use of _____ judgements.

value

Households receive _____ from firms through the resource market, and businesses receive _____ from households through the product market.

income, revenue

Command systems such as those in the Soviet Union and China faced an incentive problem because__.

these systems did not allow for entrepreneurship, so there was never a reward for innovation, output mixes were centrally determined, so production managers never faced penalties for shortages

Despite certain limitations, in which of the following ways are economic principles and models highly useful?

Determining cause and effect within an economic system, Understanding how the economy operates, Analysing economic behaviour, Explaining and predicting

In the market system, greater work skills and effort mean _____ production and higher _____.

greater, incomes

In macroeconomics, a(n) _____ is a collection of specific economic units treated as if they were one unit.

aggregate

Countries such as the BRICs (Brazil, Russia, India and China) are well-known examples of _____ markets.

emerging

In economics, an incremental or gradual change is also known as a(n) _____ change.

marginal

Marginal analysis involves the comparison or evaluation of __.

the incremental cost versus the incremental benefit of a decision

Which of the following are aspects of the concept of rational producer behaviour?

The producer thinks about the production process to reach the maximum output, The producer considers production factors – and the quantities thereof – used as inputs in the process, The producer chooses the production technique and the productive inputs that will yield the highest possible profit in the end

Market systems are dynamic because _____ preferences, _____ and _____ of resources all change.

consumer, technology, supplies

Emerging markets refer to economies that consist of a combination of the characteristics of the _____ market form yet still depend highly on _____ intervention to set the playing field in terms of _____ development specifically.

laissez-faire, government, infrastructure

The focus of __ economics is facts and cause-and-effect relationships, including things like theory testing and descriptions.

positive

Which of the following regarding theories of behaviour is accurate?

Such theories are 'rational simplifications'

The most efficient production technique depends on the available technology as well as __.

the price of the needed resources

The discipline that examines either the economy as a whole or in the aggregate is known as _____.

macroeconomics

Flashcard Info

Chapter 1