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Chap 1. – Flashcard Essay

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1. A resource is something that
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is used to produce goods and services
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2. Economics is best defined as the study of how
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individuals decide to use scarce resources in an attempt to satisfy their unlimited wants
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3. In economics, capital is defined as
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human creations used in the production process
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4. Goods and services are exchanged in
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product markets
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5. A market
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– is often a physical place – facilitates exchanges between buyers and sellers -typically involves monetary transactions -might not have well-defined geographical limits
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6. Households
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own and sell resources
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7. The labor market is an example of a
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resource market
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8. A rational decision maker will take only those actions for which the expected marginal benefit
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is greater than or equal to the expected marginal cost
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9. Microeconomics is the study of
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the economic behavior of individual decision makers
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10. Normative economic statements refer to what should be.
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true
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11. “There should be less discrimination against women” is an example of a positive statement.
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false
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12. An example of a positive economic statement is, “An increase in the price of a product causes consumers to purchase more of that product.”
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true
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13. Which of the following is an example of a positive statement?
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An increase in the price of gasoline will cause a reduction in the amount purchased.
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14. A normative economic statement
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is a statement of what ought to be, not what is
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15. The difference between positive economic statements and normative economic statements is that
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positive statements are based on fact while normative statements are based on opinion
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16. One might commit the fallacy of composition by concluding that
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what is good for the individual is necessarily good for the group
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17. In a circular-flow model, households supply all of the following except
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goods and services
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18. Rational self-interest is equivalent to pure selfishness
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false
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19. Which of the following would be a topic considered in the field of macroeconomics?
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Studying the amazing recent growth of the Chinese economy.
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25. The numerical value of the slope of a line depends in part on the units of measurement used.
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true
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26. If slope = -2 for a line on a graph with x on the horizontal axis and y on the vertical axis, then if
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x increases by 4, y decreases by 8
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27. A U-shaped curve has a positive slope everywhere.
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false
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28. Moderate exercise is better than none, but excessive exercise is harmful. What is the shape of the graph of health benefits versus hours of exercise per week if health benefits are measured on the vertical axis and exercise is measured on the horizontal axis?
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a hill-shaped curve