Test Questions on Chapter 1 – Flashcard

1)
In every economic system, choices must be made because resources are ________ and our wants are _____

2) The problem of “scarcity” applies

3) Economics is best defined as

4) In part, microeconomics is concerned with

5) Which of the following questions is a topic that would be studied by microeconomics?

6) Which of the following is a macroeconomic issue?

7) Factors of production include

8) Factors of production include all of the following EXCEPT ________.

9) Overtime worked by a JCPenney associate is considered ________ and earns ________.

10) The term human capital refers to

11) Samantha goes to college to become an engineer. This is an example of an

12) Because we face scarcity, every choice involves

13)
On Saturday morning, you rank your choices for activities in the following order: go to the library,
work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to go to the
library. Your opportunity cost is

14)
Today, Julie attended her 12:30 Economics class. If she hadn’t gone to class, Julie would have gone
out to lunch with friends. She had other options; she could have worked or slept in. Julie’s
opportunity cost of going to class is the

15) Opportunity cost is best defined as

16)
John has two hours of free time this evening. He ranked his alternatives, first go to a concert,
second go to a movie, third study for an economics exam, and fourth answer his e-mail. What is
the opportunity cost of attending the concert for John?

17) A benefit from an increase in activity is called the

18) If the marginal cost of an activity exceeds the marginal benefit, then

19) Making a choice at the margin means

20)
Suppose that for the past two months, you have studied economics one hour a day. You now
decide to study economics two hours a day. For the past two months

21) Which of the following is a positive statement?

22) The statement “Unemployment should be below 6 percent” is

23) Which of the following is a normative statement?

24) Microeconomics is the study of topics such as national production and unemployment.

true or false

25)
The tools, instruments, machines, and buildings that people use to produce goods and services are
called human capital.

true or false

49)
As long as the marginal benefit from a good is greater than its marginal cost, an economy is
operating efficiently.

true or false

50) Specialization and trade allow countries to consume beyond their PPFs

true or false

Suppose that the government is trying to decide between allocating its resources to build more
dams or to build more freeways. In terms of forgone dams, as more freeways are constructed, the
marginal benefit of additional freeways ________ and the marginal cost of additional freeways
________.

A country produces only pencils and erasers. Pencil production is allocatively efficient if the
marginal ________ of a pencil equals the marginal ________ of ________.

Technological progress makes the production possibilities frontier

A person has a comparative advantage in producing a particular good if that person

Suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas. The opportunity cost of Joe
producing one sandwich is

Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36
sandwiches or 27 pizzas. The concept of comparative advantage concludes that

A person who has an absolute advantage in the production of all goods will

In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either
plow 14 acres or plant 14 acres. Which of the following statements about comparative advantage is
CORRECT?

In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either
plow 14 acres or plant 14 acres. Brandon and Christopher can