Economic Concepts and Influencing Factors Quiz

Technology is not considered a factor of production, which typically include land, labor, capital, and entrepreneurship.

GDP stands for Gross Domestic Product, which is the total value of all goods and services produced within a country's borders in a specific time period.

CPI stands for Consumer Price Index, which measures the average change in prices over time of goods and services purchased by households.

A perfectly competitive market is characterized by many buyers and sellers, identical products, perfect information, and ease of entry and exit, so barriers to entry are not a characteristic.

Deadweight loss occurs when the price of a good or service exceeds its marginal cost, leading to an inefficient allocation of resources.

GDP, or Gross Domestic Product, measures the total value of all goods and services produced within a country's borders in a specific time period.

A monopoly is a market situation where there is only one seller and many buyers, leading to limited competition.

Price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in its price.

Open market operations are a monetary policy tool used by central banks, not a fiscal policy tool.

Gross value added is the total value of a company's output minus the value of intermediate goods used in production, representing the value added by the company.

David Ricardo is known for his theory of comparative advantage, which suggests that countries should specialize in producing goods for which they have a lower opportunity cost.

The production possibility frontier describes the maximum amount of goods or services that can be produced with a given set of resources.

The law of comparative advantage suggests that individuals can gain from trade by specializing in the production of goods for which they have a comparative advantage.

Marginal utility states that as more of a good is consumed, the additional satisfaction gained from each additional unit decreases.

A.W. Phillips developed the theory of the Phillips curve, which shows an inverse relationship between inflation and unemployment in the short run.