Test Questions on econ – Flashcard
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when resources are fully employed, an economy can produce more of one thing only by producing less of something else
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The negative slope of the production possibilities curve illustrates that:
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individuals and communities must make choices among competing alternatives
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The fundamental problem of economics implies that:
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opportunity cost
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Margaret decides to stay home and study for her exam rather than going out to a movie with her friends. Her dilemma is an example of:
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if the marginal benefit of studying an extra hour exceeds its marginal cost
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You should decide to study an extra hour tonight
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the problem of scarce resources relative to human wants
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Economics is primarily the study of:
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increasing sacrifices of consumer goods
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The data in the table indicate that increasing production of capital goods requires:
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shift her budget line to the right
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Consider the problem Marsha faces of how to allocate her weekly allowance between books and videos. An increase in Marsha's allowance will:
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how consumers respond to a change in gasoline prices
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A microeconomist would most likely study:
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Correct is constant and equal to 2 songs
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Suppose you have a $20 iTunes gift card with which you can buy (download) songs or videos. Songs cost $1.00 each and videos cost $2.00 each. The opportunity cost of one video:
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its total sales revenue exceeds the sum of all its costs
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A firm will earn a positive economic profit if:
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Any good that returns its producers sufficient revenue to cover its total costs
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For a market system, which of the following best answers the question, "What goods and services will be produced?"
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profitable returns to innovative firms
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The competitive market system encourages innovation and technological advance, primarily through:
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private property rights
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The market system is characterized by:
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increases output by enabling workers to take advantage of differences in their skills
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Human specialization, or the division of labor:
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central planners found it increasingly difficult to coordinate the economic decisions of consumers, resource suppliers, and businesses
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The command systems of the Soviet Union and eastern Europe failed in part because:
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Profits of peach growers will rise and peach production will rise
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If a change in consumer preferences results in many more consumers registering their "dollar votes" in favor of peaches, which of the following will most likely follow
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help determine which industries survive or fail
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Economic profits and losses:
