Homework 1 Flashcard
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A model or theory in economics is: A.based mostly on value judgments. B.built using relevant observations, assumptions, and abstractions. C.only useful if it correctly portrays the real world and its complexities. D.useful only if it is based on normative economic statements.
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B.built using relevant observations, assumptions, and abstractions.
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An example of a positive statement is: A.slow growth in real GDP will raise unemployment B.A high rate of economic growth is good for the country. C.Everyone in the country needs to be covered by national health insurance. D.Baseball players should not be paid higher salaries than the president of the United States.
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A.slow growth in real GDP will raise unemployment
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What is a business cycle? A.It is a firm's pattern of sales during a given year. B.It is the economy's pattern of fluctuations in economic activity: expansion followed by contraction and then by an expansion. C.It is the pattern of fluctuations in consumer spending: increased spending during the summer months and holiday seasons and decreases at other times of the year. D.It is the pattern of growth in gross domestic product over the long run.
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B.It is the economy's pattern of fluctuations in economic activity: expansion followed by contraction and then by an expansion.
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A hypothesis is an assertion that can be: A.proven to be false. B.proven to be true. C.proven to be true or false. D.tested only in the normative sense.
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A.proven to be false.
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Economists are: A.concerned with developing theories and interested in solving problems. B.interested in solving problems but not concerned with developing theories. C.reluctant to predict changes in variables such as prices, employment, and spending. D.always in agreement on the best way to implement policy decisions.
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A.concerned with developing theories and interested in solving problems.
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The problem of scarcity is confronted by: A.industrialized societies. B. pre-industrialized societies. C.societies governed by communist philosophies. D.all societies.
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D.all societies.
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The three fundamental economic questions of what, how, and for whom: A.exist because of scarcity. B.are much more serious in a socialist system. C.are not serious in a capitalistic system. D.are not relevant in the industrialized world of today.
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A.exist because of scarcity.
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A simplified representation of a particular problem is a: A.model. B.constant. C.hypothesis. D.law.
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A.model.
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The three broad types of factors of production are: A.capital, labor, and natural resources. B.money, profit, and interest. C.stocks, bonds, and financial assets. D.technology, human capital, and comparative advantage.
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A.capital, labor, and natural resources.
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Macroeconomics is most likely to be concerned with the: A.price determination in the car industry B.relative prices C.the efficient allocation of resources D.unemployment and inflation
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D.unemployment and inflation
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Statements that make value judgments are: A.pecuniary. B.positive. C.nominal. D.normative.
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D.normative.
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The study of how people choose among the alternatives available to them is the: A.definition of economics. B.model of demand. C.theory of opportunity costs. D.method of distinguishing between microeconomics and macroeconomics.
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A.definition of economics.
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Many disagreements among economists result because: A.economists deal only with positive economics. B.economists sometimes make normative judgments. C.economics is a social science. D.economics deals so much with theories and models.
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B.economists sometimes make normative judgments.
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Unemployment and inflation are: A.not relevant in the U.S. economy today. B.major topics in macroeconomics. C.unique only to capitalistic economies. D.very important in the study of microeconomics.
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B.major topics in macroeconomics.
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A person who seeks to earn profits by finding ways to organize factors of production is called a(n): A.foreman B.finance capitalist. C.entrepreneur. D.manager.
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C.entrepreneur.
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A tradeoff between two economic goals means that: A.if achievement of one increases, then achievement of the other must increase. B.if achievement of one decreases, then achievement of the other must decrease. C.if you achieve more of one, you will achieve less of the other. D.the goals are fully compatible.
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C.if you achieve more of one, you will achieve less of the other.
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Whenever a choice is made: A.the value of all the other choices that could have been made is called opportunity cost. B.normative economics is encountered. C.the problem of "all other things unchanged" results. D.the opportunity cost of that choice is the highest-valued other choice that could have been made.
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D.the opportunity cost of that choice is the highest-valued other choice that could have been made.
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In a command socialist economy: A.resources are government owned but individuals make some decisions over their use. B.resources are government owned and government exercises broad power over their use. C.resources are privately owned and individuals make decisions over their use. D.resources are privately owned but government exercises broad power over their use.
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B.resources are government owned and government exercises broad power over their use.
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Economic resources used in the production process are called: A.free gifts of the natural environment. B.factors of production. C.consumer items. D.money capital.
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B.factors of production.
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Capital is best considered as: A.the natural environment. B.a factor of production that has been produced. C.financial assets. D.money.
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B.a factor of production that has been produced.
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The circular flow is a model of the A.flow of goods, services and payments between households and businesses B.spending by households C.role of government taxation and spending D.workings of labor markets
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A.flow of goods, services and payments between households and businesses
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Macroeconomics deals with: A.the what, how, who questions faced by any economy B.the role of prices and markets in allocating resources C.the determinants of aggregate output, overall level of prices and inflation, growth, etc D.all of the above
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C.the determinants of aggregate output, overall level of prices and inflation, growth, et
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The statement that "there is no such thing as a free lunch" means: A.there are no tradeoffs between economic goals. B.any production requires the use of scarce resources, and thus the sacrifice of another alternative. C.choices need not be made in rational behavior. D.scarcity only exists in poor societies.
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B.any production requires the use of scarce resources, and thus the sacrifice of another alternative.
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Economics is a: A.social science that studies goods with no alternative uses. B.natural science that studies goods with no alternative uses. C.social science concerned chiefly with how people choose among alternatives. D.social science concerned chiefly with reasons why society has unlimited resources.
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C.social science concerned chiefly with how people choose among alternatives.
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An answer to the question "For whom" determines: A.tastes and preferences. B.how resources are combined in production. C.the kinds and quantities of goods produced. D.who gets the goods and services produced.
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D.who gets the goods and services produced.
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An example of a normative statement is: A.The rate of unemployment is 4 percent. B.A high rate of economic growth is good for the country. C.The federal government spends half of its budget on national defense. D.People with health insurance tend to spend more on health care than those who are uninsured..
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B.A high rate of economic growth is good for the country.
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Ceteris paribus means: A.allowing all other things to change. B.making value judgments. C.all other things unchanged. D.differentiating between macroeconomics and microeconomics
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C.all other things unchanged.
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The best example of a market capitalist economy is: A.Russia. B.China before 1979. C.Cuba. D.the United States.
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D.the United States.
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The basic concern of economics is: A.to keep business firms from losing money. B.to prove that capitalism is better than socialism. C.to study the choices people make. D.to use unlimited resources to produce goods and services to satisfy limited wants.
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C.to study the choices people make.
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The fundamental economic questions that every economic system must answer are: A.what, how, and for whom. B.what, why, and for whom. C.when, why, and for whom. D.how, when, and how much.
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A.what, how, and for whom.
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A key theme fundamental to all of economics is: A.there are limited wants. B.we are a rich country but are simply not aware of it. C.people have unlimited wants facing limited means to satisfy them. D.there are unlimited resources.
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C.people have unlimited wants facing limited means to satisfy them.
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Factors of production are: A.the resources the economy has available to produce goods and services. B.generally unlimited in modern economies. C.always employed in modern economies. D.the knowledge that can be applied to the production of goods and services.
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A.the resources the economy has available to produce goods and services.
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A feature that distinguishes economists' approach to making choices is (are): A.assigning opportunity costs a major role in their analyses of choices. B.assuming individuals make choices to maximize objectives. C.emphasizing that choices are made at the margin. = D.all of the above.
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D.all of the above.
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Scarcity in economics means: A.not having sufficient resources to produce all the goods and services we want. B.the wants of people are limited. C.there must be poor people in rich countries. D.economists are clearly not doing their jobs.
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A.not having sufficient resources to produce all the goods and services we want.
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The answer to, "What goods are to be produced ?" deals with: A.who gets the goods. B.how tastes and preferences are determined. C.how resources are combined to produce goods and services. D.the kinds and quantities of goods and services produced.
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D.the kinds and quantities of goods and services produced.
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In a market capitalist economy: A.factors of production are owned privately and decisions about their use are basically made by individuals. B.factors of production are owned by the government but decisions about their use are made privately. C.private ownership exists but decisions about resource allocation are usually made centrally by the government. D.there is no role for the government.
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A.factors of production are owned privately and decisions about their use are basically made by individuals.
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Statements that are a hypothesis or statement of fact are: A.pecuniary. B.positive. C.nominal. D.normative.
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B.positive.
