Econ 2020 Chapter 1 – Flashcards

The law of increasing opportunity costs is reflected in a production possibilities curve that is

Microeconomics is concerned with

Products and services are scarce because resources are scarce

In economics, the pleasure, happiness, or satisfaction received from a product is called

The economizing problem is one of deciding how to make the best use of

(Consider this) At fast-food restaurants

A production possibilities curve illustrates

(Last Word) The fallacy of composition states that

Which of the following will not produce an outward shift of the production possibilities curve?

Any combination of goods lying outside of the budget line

Although sleeping in on a work day or school day, has an opportunity cost, sleeping late on a weekend does not.

The slope of a line parallel to the vertical axis is

Alex sees that his neighbors' lawns all need mowing. He offers to provide the service in exchange for a wage of $20 per hour. Some neighbors accept Alex's offer and others refuse. Economists would describe Alex's behavior as

The slope of the typical production possibilities curve:

The production possibilities curve shows various combinations of two products that an economy can produce when achieving full employment.

Which of the following is associated with macroeconomics?

The basic difference between consumer goods and capital goods is that

An economy will always operate at some point on its production possibilities curve.

A positive statement is concerned primarily with:

The problems of aggregate inflation and unemployment are:

The optimal point on a production possibilities curve is achieved where:

(Last Word) If variables X and Y are positively correlated, this means that:

(Last Word) The "after this, therefore because of this" fallacy states that:

The law of increasing opportunity costs is reflected in a production possibilities curve that is:

The production possibilities curve shows:

A typical concave (bowed out from the origin) production possibilities curve implies:

Any point inside the production possibilities curve indicates:

The slope of a line parallel to the horizontal axis is

The process by which capital goods are accumulated is known as investment

If economic theories are solidly based on relevant facts, then appropriate economic policy becomes obvious and uncontroversial.

Any combination of goods lying outside of the budget line:

ssume the price of product Y (the quantity of which is on the vertical axis) is $15 and the price of product X (the quantity of which is on the horizontal axis) is $3. Also assume that money income is $60. The absolute value of the slope of the resulting budget line:

Kelly works at an ice cream shop and observes that the number of people buying ice cream varies greatly from day to day. For a couple of weeks she has recorded the number of people at the shop each day, as well as the daily temperature. If Kelly is using the scientific method to better understand ice cream buying habits, her next step is to:

(Last Word) A study found that the incidence of skin cancer increases along with the amount of time people work under fluorescent light, leading some people to conclude that fluorescent lighting is a cause of skin cancer. But further analysis found that people who work in offices, where fluorescent light is common, suffer more sunburn on their vacations than other workers. The sunburns, not the fluorescent light, were the cause of the higher incidence of skin cancer. The original conclusion illustrates:

n recent years the economy of Japan has grown, despite the fact that the population of Japan has declined. Which of the following would best explain Japan's economic growth despite having a smaller population?

The marginal cost curve is:

Which of the following will shift the production possibilities curve to the right?

Refer to the above diagram. The equation that shows the relationship between Y and X is:

Suppose an economist says that "Other things equal, the lower the price of bananas, the greater the amount of bananas purchased." This statement indicates that:

If two variables are inversely related, then as the value of one variable:

If the equation y = 15 - 4x was plotted, the:

(Last Word) The fallacy of composition is essentially the error of:

A nation's production possibilities curve might shift to the left (inward) as a result of:

(Last Word) A caller to a radio talk show states that protesters against globalization are a collection of "anarchist punks, naïve college students, and trade union radicals." This is an example of:

All of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve, except:

Assume an economy is incurring unemployment. The effect of resolving this problem will be to:

The negative slope of the production possibilities curve is a graphical way of indicating that:

The budget line shows:

Suppose an economist says that "Other things equal, the lower the price of bananas, the greater the amount of bananas purchased." This statement indicates that:

Brinley says that "Gas prices are rising because there aren't enough oil refineries." Katie argues that "Gas prices are rising because of the growing demand for gasoline from China and India." We can conclude that:

If a positive relationship exists between x and y:

The typical production possibilities curve is:

The present choice of position on the production possibilities curve will not influence the future location of the curve.

An economy cannot produce at a point outside of its production possibilities curve because human economic wants are insatiable.

The production possibilities curve shows various combinations of two products that an economy can produce when achieving full employmen

Which of the following is assumed in constructing a typical production possibilities curve?

Microeconomics is concerned with:

(Consider This) The economic perspective used in customer decision making at fast-food restaurants is reflected in

The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that:

Answer the question on the basis of the following five data sets wherein it is assumed that the variable shown on the left is the independent variable and the one on the right is the dependent variable. Assume in graphing these data that the independent variable is shown on the horizontal axis and the dependent variable on the vertical axis.

Economists contend that most economic decisions are:

(Last Word) "The government deregulated the electricity industry in California and a shortage of electricity soon occurred. It is clear that the deregulation caused the shortage." This statement needs careful analysis because it may reflect the:

The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that

Answer the question on the basis of the following five data sets wherein it is assumed that the variable shown on the left is the independent variable and the one on the right is the dependent variable. Assume in graphing these data that the independent variable is shown on the horizontal axis and the dependent variable on the vertical axis

Last Word) "The government deregulated the electricity industry in California and a shortage of electricity soon occurred. It is clear that the deregulation caused the shortage." This statement needs careful analysis because it may reflect the

Refer to the above table. A total output of 3 units of capital goods and 4 units of consumer goods:

Answer the question on the basis of the following five data sets wherein it is assumed that the variable shown on the left is the independent variable and the one on the right is the dependent variable. Assume in graphing these data that the independent variable is shown on the horizontal axis and the dependent variable on the vertical axis.

Refer to the above diagram. Other things equal, which of the following positions relative to PP1 would be the most likely to result in a future production possibilities curve of PP3, rather than PP2

Refer to the above diagram. The movement down the production possibilities curve from point A to point E suggests that the production of

Refer to the above graph. Using Qd for quantity demanded and P for price, which of the following equations correctly states the demand for this product?

Positive statements are expressions of value judgments.

The production possibilities curve

Which of the following is not a main function of the entrepreneur?

Answer the question on the basis of the following information. Assume that if the interest rate that businesses must pay to borrow funds were 20 percent, it would be unprofitable for businesses to invest in new machinery and equipment, so investment would be zero. But if the interest rate were 16 percent, businesses would find it profitable to invest $10 billion. If the interest rate were 12 percent, $20 billion would be invested. Assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate. Refer to the above information. Which of the following correctly expresses the indicated relationship as an equation?

Other things equal, an increase in a consumer's money income:

Refer to the above diagram. Which of the following is a normative statement

Economics is concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity." This statement is:

Macroeconomics approaches the study of economics from the viewpoint of:

Assume a household would consume $100 worth of goods and services per week if its weekly income were zero and would spend an additional $80 per week for each $100 of additional income. Letting C represent consumption and Y represent income, the equation that summarizes this relationship is

Assume the price of product Y (the quantity of which is on the vertical axis) is $15 and the price of product X (the quantity of which is on the horizontal axis) is $3. Also assume that money income is $60. The absolute value of the slope of the resulting budget line

Refer to the above diagram. Technological advance in producing both capital goods and consumer goods is shown by the shift of the production possibilities curve from AB to:

Suppose Elroy's budget line is as shown on the above diagram. If his tastes change in favor of Coke and against popcorn, the budget line will:

Refer to the above diagram. Which line(s) show(s) a positive relationship between x and y?

The marginal benefit curve is:

Refer to the above diagram. Other things equal, this economy will achieve the most rapid rate of growth if:

Refer to the above diagram. As it relates to production possibilities analysis, the law of increasing opportunity cost is reflected in curve:

Refer to the above diagram. Which line(s) show(s) a positive vertical intercept?

Economists:

Refer to the above diagram. Which of the following is a positive statement?

(Last Word) Which of the following best illustrates the post hoc, ergo propter hoc fallacy?

Refer to the above production possibilities curve. At the onset of the Second World War the Soviet Union was already at full employment. Its economic adjustment from peacetime to wartime can best be described by the movement from point:

(Consider This) Refer to the above diagram. The direct economic impact of the destruction and loss of lives caused by the terrorist attacks of September 11, 2001 is illustrated by the:

Refer to the above diagram. Which line(s) show(s) a negative vertical intercept?

Refer to the above diagram. The concept of opportunity cost is best represented by the:

If an economy is operating inside its production possibilities curve for consumer goods and capital goods, it:

(Last Word) Which of the following has to do with the problem of distinguishing cause and effect in economic reasoning?

Which of the following is not a main function of the entrepreneur?

Answer the question on the basis of the following information. Assume that if the interest rate that businesses must pay to borrow funds were 20 percent, it would be unprofitable for businesses to invest in new machinery and equipment, so investment would be zero. But if the interest rate were 16 percent, businesses would find it profitable to invest $10 billion. If the interest rate were 12 percent, $20 billion would be invested. Assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate. Refer to the above information. Which of the following correctly expresses the indicated relationship as an equation?

Other things equal, an increase in a consumer's money income:

Refer to the above diagram. This production possibilities curve is constructed so that: