are201spg07test1akey

are201spg07test1akey - ARE 201 Fall 2009 Test 1 Name _KEY_...

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ARE 201 Name ___KEY_____ Fall 2009 Test 1 I. Complete the sentence or provide the short answer on the "answer sheet". 1. An economy in which a central authority decides what is produced and who receives what amount of products and services is called a __ command _______ economy. 2. An economy that relies on individual self-interest to decide how resources are used and who received what amount of products and services is called a __ market (or price) economy. 3. In the economy described in question #2, _ prices ________ are the signals, or "invisible hand", that guide resource allocation. 4. A __ demand ______ curve shows how much of something (product or service) buyers purchase as the price of the product or service varies. 5. On the curve describe in question 4, when the price of the product or service falls, the amount purchased increases. 6. The field of economics that studies the decisions of individual households and businesses and their interactions in the marketplace is called ___ microeconomics _. 7. The field of economics that studies the national economy and government economic policy is called _ macroeconomics ____________. 8. People are sometimes criticized for only being concerned with money. However, in economics money is simply a convenient way to measure the amount of resources available to someone. 9. In Micro Mischief , George argues that growing kudzu is "free" because it grows wild and requires no fertilizer or watering. Dia disagrees, saying growing kudzu is not free because the land on which it grows could be used for some other purpose, and
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are201spg07test1akey - ARE 201 Fall 2009 Test 1 Name _KEY_...

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