Ch.1 MicroEcon – Flashcards
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The minimum wage law causes unemployment
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Which of the following is a positive economic statement?
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what will be produced/how something will be produced
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Allocative efficiency best explains_______and productive efficiency best explains________.
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Production managers are more concerned with satisfying government's orders than with satisfying consumer wants.
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Which of the following is a problem inherent in centrally planned economies?
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Consumers and firms choosing which goods and services to buy or produce.
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The decision about what goods and services will be produced made in a market economy is made by
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Are simplified versions of reality
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Economic models
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What determines the growth rate of gross domestic product
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Which of the following is a macroeconomics question?
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marginal benefit equals the marginal cost
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Economists reason that the optimal decision is to continue any activity up to the point where the
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Marginal revenue
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A grocery store sells a bag of potatoes at a fixed price of $2.30. Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?
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Unlimited wants exceed limited resources
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Scarcity refers to the situation where
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Competition
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_________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers is greater than the additional cost of production.
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What determines inflation rate?
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Which of the following is a macroeconomics question?
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What factors determine the price of carrots?
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Which of the following is a microeconomics question?
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The price of gasoline is too high.
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Which of the following is a normative economic statement?
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How households and firms make choices
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Microeconomics is the study of
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model
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An economic _____ is a simplified version of some aspect of economic life used to analyze an economic issue.
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What goods and services to produce; how will these goods and services be produced; and who receives them?
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The three fundamental questions that any economy must address are
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Producing more of one good means less of another good can be produced.
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Every society faces economic trade-offs. This means
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The choices people make to attain their goals, given their scarce resources
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By definition, economics is the study of
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The highest valued alternative that must be given up to engage in an activity
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Opportunity cost is defined as
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The government
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Consider the following economic agents: the government, consumers, and producers. Who in a centrally planned economy, decides what goods and services will be produced with the scarce resources available in that economy?
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Choices; scarce
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Economics is the study of the ________ people make to attain their goals, given their _____ resources.
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There is often a trade-off between the two.
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Which of the following correctly describes the relationship between economic efficiency and economic equity?
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Receive the most of what is produced
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In a market economy, those who are willing and able to buy what is produced
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Macroeconomics
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The branch of economics which studies the behaviors of entire economies is called
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Productive Efficiency
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_____________ is a situation in which a good or service is produced at the lowest possible cost.
