question

The _________ problem refers to the need to make choices because economic wants exceed economic needs.

answer

economizing

question

_______________________________ states that as production of a particular good increases, the cost of producing an additional unit rises.

answer

The law of increasing Opportunity Costs

question

The four general categories of economic resources are:

answer

-Land (Natural Resources) -Labor -Capital -Entrepreneurship

question

Consists of the physical actions and mental activities that people contribute to the production of goods and services?

answer

Labor

question

Everyone, even the very wealthy, has a __________ amount of income.

answer

limited

question

An entrepreneur:

answer

-Takes the risk of earning profits or suffering losses from owning an enterprise. -Makes strategic business decisions that set the course of an enterprise. -Innovates

question

Which of the following results from having scarce economic resources?

answer

The production of limited goods and services.

question

All natural, human, and manufactured goods that go into the production of goods and services are considered society's _________ economic resources.

answer

scarce

question

Synonymous with land to an economist

answer

Oil and mineral deposits Forests Sunlight Water Arable land

question

In economics, the term ____________ describes spending that pays for the production and accumulation of capital goods.

answer

investment

question

For economists, __________ goods includes all manufactured aids used in producing consumer goods and services.

answer

capital

question

The discipline that examines either the economy as a whole or its aggregates.

answer

Macroeconomics

question

Scenarios illustrated in a PPC

answer

Attainable combinations of both goods are below the curve Output combinations on the curves are the same efficiency An economy is in full employment along the curve Efficiency in points on the curve

question

What enables society to produce more goods with current resources?

answer

Technology

question

The function of an entrepreneur is:

answer

to combine the resources of land, labor, and capital to produce a good or service. to create new products.

question

The situation where one thing had to be given up in order to have some other items is called a:

answer

trade-off

question

The pleasure, satisfaction, or happiness obtained from consuming a good or service is known as

answer

utility

question

A ___________________ lists the different combinations of two products that can be produced with a specific set of resources, assuming full employment

answer

production possibilities table

question

The discipline of economics concerned with individual units such as households, firms, and government.

answer

Microeconomics

question

Like the physical and life sciences, as well as other social sciences, economics relies on the __________method.

answer

scientific

question

The highest-values alternative that is given up or sacrificed when choosing to produce or consume one good over another is referred to as:

answer

opportunity cost

question

A production possibilities curve illustrates the attainable combination:

answer

of two goods that can be produces given a specific set of resources.

question

A statement about economic behavior or the economy that enables prediction of the probable effects of certain actions

answer

economic principle

question

Specializing and participating in international trade allows an economy to

answer

circumvent the output limits imposed by its own production possibilities curve increase the quantities of capital and consumer goods available to society

question

Economics assumes that human behavior reflects "_____ self interest"

answer

rational

question

Economic growth is a result of:

answer

improvements in resource quality technological advances increases in the supply of resources

question

Due to scarce resources, every individual, whether rich or poor, is faced with an ____________ cost when choosing to produce or consume more of one good over another.

answer

opportunity

question

Which of the following includes all natural resources used in the production of goods and services?

answer

Land

question

For better or worse, people have virtually _________ wants

answer

unlimited

question

__________ economics focuses on facts and cause-and-effect relationships.

answer

Positive

question

In Macroeconomics, an _______________ is a collection of specific economic units treated as if they were one unit.

answer

aggregate

question

The ability to produce more of both consumer goods and capital goods should be the net result of:

answer

economics growth increased supplies of the factors of production

question

Points __________ the production possibilities curve are produced efficiently so long as an economy uses all of its available resources.

answer

along

question

The economic term that means incremental "changes in" or additional changes is

answer

marginal

question

Combinations of output that fall inside the production possibilities curve present __________

answer

less total output in an economy inefficient use of resources goods that are attainable

question

____________ in income shifts a consumer's budget line to the right.

answer

An Increase

question

As individuals' income rise, they will still be confronted with which of the following?

answer

Trade-Offs Choices Opportunity Costs

question

Factors of production include ____________

answer

crude oil entrepreneurial ability capital land labor

question

Which of the following scenarios are illustrated in the given PPC?

answer

Attainable combinations of both goods below the curve An economy in full employment along the curve

question

Marginal analysis involves the comparison or the evaluation of

answer

the additional cost versus the additional benefit of a decision

question

A consumer's ___________ line or constraint shows various combinations of two products that can be purchased with a specific amount of income.

answer

budget

question

_________________ economic analysis concerns what is, whereas _________________ economic analysis embodies subjective feelings about what ought to be.

answer

Positive ; Normative

question

An Increase in ________ will shift the budget line to the right.

answer

income

question

The concept that "there is no free lunch" reflects the notion that:

answer

Scarce resources are used to produce so-called "free goods" that have alternative uses that are given up in order to produce the aforesaid "free" goods.

question

A decrease in income will shift the budget line to the _________

answer

left

question

Combinations of goods that are beyond the production possibilities curve:

answer

would require resources that are not currently available require economic growth are currently unattainable

question

Trade-offs arising from limited resources give rise to:

answer

opportunity costs

question

The concept or term that refers to the notion that all variables except those under immediate consideration are held constant for a particular analysis is known as _________.

answer

ceteris paribus (the other things equal assumption)

question

A statement about economic behavior or the economy that enables prediction of the probable effects of certain actions is known as an:

answer

economic law or principle

question

When individuals make decisions with some desired outcome in mind, they are engaging in:

answer

purposeful behavior

question

____________ economics considers the desirability of certain aspects of the economy and underlies expressions of support for particular economic policies

answer

Normative

question

Which of the following illustrates that at any point in time, a fully employed economy must sacrifice some amount of one good to obtain more of another good?

answer

A production possibilities table

question

At an output level that is greater than the optimal:

answer

the marginal cost of producing the good is greater than the marginal benefit

question

Each point on the production possibilities cure represents some ____________ of two products

answer

output combination

question

Natural resources, labor, human capital, physical capital and entrepreneurship are all scarce economic resources privately or collectively owned by members of society. Where these scarce resources are used to produce goods are services, there is:

answer

no "Free Lunch" a cost borne by society in utilizing these resources to produce any good or service

question

Which of the following combinations are attainable given a consumer's budget line?

answer

A combination that involves the entire consumption of one good and zero consumption of the other good. Combinations that fall inside the budget line Combinations that fall on the budget line Combinations on the midpoint of the budget line

question

In a world of scarcity,

answer

the decision to obtain the marginal benefit (MB) associated with some specific option always includes the marginal cost (MC) of forgoing something else.

question

A nation's production possibilities curve (PPC) can shift outward:

answer

as a result of specialization and trade through the use of improved production techniques with an increase in the quality and quantity of resources

question

Capital goods differ from consumer goods in that:

answer

capital goods satisfy consumer wants indirectly through the production of consumer goods consumer goods satisfy wants directly

question

Economic principles are generalizations that are

answer

expressed as the tendencies of average consumers, workers, or firms.

question

An economy can produce either guns or butter with all available resources. Suppose it currently produces all butter and it chooses to produce some guns, thereby giving up some production of butter. As a result, the first 200 units of guns are produces at the cost of only 50 units of butter. Not surprisingly, the next 200 units of guns are produced at the cost of 150 units of butter and the last 200 units of guns at the cost of 300 units of butter. What does this describe?

answer

The law of increasing opportunity costs.

question

When consumers purchase a good or service, they do so in order to _________ their utility.

answer

increase

question

Normative, value-based policy questions or statements give rise to:

answer

controversy or disagreement among economists

question

Specializing and participating in international trade allows an economy to:

answer

increase the quantities of capital and consumer goods available to society circumvent the output limits imposed by its own production possibilities curve

question

The economic perspective focuses on _________, therefore the decision maker must compare incremental benefits and costs.

answer

marginal analysis

question

Constant opportunity cost is best exemplifies through:

answer

the straight-line budget constraint

question

Economic principles and models are highly useful in

answer

analyzing economic behavior explaining and predicting understanding how the economy operates determining cause and effect

question

Consider the relationship between the price of gas and the quantity of gas consumed by drives. If we are to consider the price of gas as the only factor affecting the quantity of gas consumed, while holding other factors such as drivers' incomes and tastes and preferences irrelevant, then we are invoking:

answer

ceteris paribus and the other-things-equal assumption

question

Points lying _________ the production possibilities curve are unattainable with the current availability of resources and technology

answer

outside

Chapter 1 – Limits, Alternatives, and Choices – Flashcards

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