Econ Exam 1 Ch.1 – Flashcards
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human wants exceed the resources available to satisfy them.
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Scarcity exists because
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we make choices in the face of scarcity.
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Economics studies how
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Human wants exceed the resources available to satisfy them.
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What is the reason that all economic issues and problems occur?
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how people make choices to cope with scarcity.
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Economics is the social science that studies
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choices made by individuals and businesses.
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Microeconomics includes the study of the
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b. the effect on economic growth if the government raises taxes
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Which of the following is a topic studied in macroeconomics? a. the impact of labor unions on wages b. the effect on economic growth if the government raises taxes c. the pricing decisions in the computer hardware industry d. how the wheat industry determines how much wheat to grow e. the impact of higher prices for gasoline on the number of SUVs people buy
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what
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When Ford decides to increase production of hybrid cars, it directly answers the ________ question.
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how
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When the power company decides to use manpower to bury its lines, it directly answers the ________ question.
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For whom will health care be produced?
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Canada has nationalized health care, so that everyone, regardless of their ability to pay, has some access to health care. Based on this observation, Canada has decided that "everyone, regardless of their ability to pay" is the answer to what microeconomic question?
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self-interest
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Choices that are best for the individuals that make them are choices in pursuit of
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social interest
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Choices that are best for the society as a whole are choices in pursuit of
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a. It is the same for all individuals.
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What is NOT true about rational choice? a. It is the same for all individuals. b. It can result in different decisions for different individuals. c. It involves comparing costs and benefits. d. It might turn out not to have been the best choice after the event. e. It is a choice that uses the available resources to best achieve the objective of the person making the choice.
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the best thing given up.
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Economists measure opportunity cost as..
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the missed movie.
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If Jessie studies economics for two hours instead of going to the movies with her friends, then the opportunity cost of studying is..
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the $10 he could have earned at his job.
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Ali decides to attend the one-hour review session for microeconomics instead of working at his job. His job pays him $10 per hour. Ali's opportunity cost of attending the review session is
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increased the marginal cost
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Mothers Against Drunk Drivers (MADD) campaigned to increase the legal penalties of drunk driving. This successful campaign ________ of drunk driving.
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comparing the marginal cost and marginal benefits when making a decision.
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Decision making on the margin involves
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marginal benefit of graduate school exceeds the marginal cost.
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The decision to go to graduate school is a rational one for a college student if the
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a reward or a penalty that encourages or discourages an action.
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An incentive is
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an incentive to attend the review session.
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Your economics professor offers 10 points extra credit if you attend a review session before your next exam. This extra credit is an example of
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positive statement
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The statement that "increases in the tax on gasoline increase the price of gasoline" is an example of a
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ii and iii
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Normative statements i. describe how the world is. ii. describe how the world ought to be. iii. depend on people's values and cannot be tested.
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a normative statement (Statement of opinion; cannot be tested to be true or false; what ought to be)
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A statement that "All children should receive free health care" is an example of what kind of statement?
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the value of the highest-valued alternative that is forgone in making a choice.
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Opportunity cost is best defined as
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scatter diagram
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A graph of the value of one variable against the value of another variable is known as a
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shows how a variable changes over time
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a time series graph..
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rising or falling quickly.
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A steep slope in a time series graph means the variable is
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a general tendency for a variable to rise or fall.
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trend refers to..
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cross-section graph
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A graph shows the average wage of various demographic groups in 2012. The kind of graph used to show these data would be a
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time-series graph
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Demonstrating how an economic variable changes from one year to the next is best illustrated by a
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cross-section graph
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To show the values of an economic variable for different groups in a population at a point in time, it is best to use a
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a positive relationship between y and x.
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If the change in y = 10 and the change in x = 3, there is
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negatively related
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If x increases and as a result y decreases, then x and y are
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either a horizontal or a vertical line.
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If two variables are unrelated, their graph is
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maximum
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If a curve rises and then falls, it has a
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minimum
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If a curve falls and then rises, it has a
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-5
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If the quantity of the variable on the y-axis increases by 10 when the quantity of the variable on the x-axis decreases by 2, then the slope of the curve equals
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"other things remaining the same."
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The Latin term "ceteris paribus" means
