Economics Flashcard

Front

The essential difference between a command economy and a market economy is that in a market economy:

Back

buyers and sellers determine resource allocation.

Front

Which is a basic economic question that must be answered by all economic systems?

Back

Which goods and services will be produced?

Front

Profits are equal to total...

Back

sales minus taxes and depreciation.

Front

If the government decides to increase the payroll taxes on the wages and salaries of workers, then there will most likely be

Back

a decrease in consumption.

Front

Some members of Congress want to increase the general level of tariffs. If this increase occurs, then we should expect...

Back

a decrease in imports in the U.S.

Front

Which best describes what the law of comparative advantage means for trading routes? Each trading nation can benefit by exporting goods that...

Back

it produces at low opportunity costs and importing goods it produces at high opportunity costs.

Front

When there is a surplus of a product in a competitive market, it is usually the case that the...

Back

market price of the product will eventually decrease.

Front

In a market economy, high wages depend mostly on...

Back

high output per worker.

Front

Why do medical doctors generally earn more than farmers?

Back

Medical doctors are scarcer, given the demand for their services.

Front

A nation has an international trade surplus when...

Back

its exports are greater than its imports.