Bachelor of Social Science Economics Flashcards
7 cards from real BSocSc Bachelor of Social Science practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Bachelor of Social Science Economics flashcards as text
Which concept explains why nations benefit from trade even when one country is more efficient at producing everything?
Answer: Comparative advantage
Comparative advantage shows that a country gains from specializing in goods it produces at lower opportunity cost, even if another country is absolutely more efficient at all goods.
When calculating GDP using the expenditure approach, which component is subtracted?
Answer: Imports
Imports are subtracted in the expenditure formula (GDP = C + I + G + NX) because they represent spending on foreign-produced goods, not domestic output.
The concept of 'moral hazard' in economics refers to:
Answer: Risky behavior encouraged by being insulated from consequences
Moral hazard arises when individuals or firms take on greater risk because they do not bear the full cost of that risk, such as when insured parties are less careful.
Stagflation, which challenged Keynesian economics in the 1970s, refers to the simultaneous occurrence of:
Answer: High inflation and high unemployment
Stagflation — stagnant growth plus inflation — contradicted the traditional Phillips Curve trade-off and prompted reconsideration of demand-management policies.
In behavioral economics, 'loss aversion' means people:
Answer: Feel losses more strongly than equivalent gains
Kahneman and Tversky found that the pain of losing a given amount is roughly twice as powerful as the pleasure of gaining the same amount.
Which of the following best describes 'frictional unemployment'?
Answer: Short-term unemployment while workers search for new jobs
Frictional unemployment is temporary and arises naturally as workers transition between jobs, reflecting normal job search in a dynamic economy.
A tariff on imported steel primarily benefits which group while harming which other?
Answer: Domestic steel producers; domestic manufacturers using steel
A steel tariff raises prices for imported steel, helping domestic steel producers compete, but raises costs for domestic manufacturers who use steel as an input.