Chapter 1,2,and 5 Quiz – Flashcards with Answers
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Economics is the study of how:
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Society uses limited resources
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The concept of opportunity cost
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can be applied to the analysis of any decision making process
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The reason that opportunity costs arise is that
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resources are scarce
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Which of the following is NOT an opportunity cost of attending college
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Cost of food you consume while you're attending college
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You own a Star Wars DVD set. The oppurtunity cost of watching these DVD's for the second time
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Is the Value of the alternative use of the time you spend watching the DVD's
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Studying how Joshua allocates his time between school and video games is an example of
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microeconomics
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Inflation and unemployment are a focus of:
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macroeconomics
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There is a ___________ relationship between disposible income and consumption
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Positive
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A decrease in unemployment may be represented by the movement from
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The dot on the top to inside the PPF
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Economy moves from the top pf the y axis to the second to last point of the x axis. This could be explained by:
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Change in society preferences from one product to another
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An improvement in technology will cause the PPF to shift in which direction?
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The PPF will shift outward
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Which of the following is a topic studied in macroeconomics?
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Gross Domestic Product
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An increase in the overall price level is called
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inflation
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A period during which aggregate output rises is called
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expansion
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It has become conventional to classify an economic downturn as a recession when aggregate ouput declines for :
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2 consecutive quarters
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A prolonged and deep recession is called a
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depression
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Unemployment implies that in the labor market
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there is an excess supply of labor
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Unemployement generally _________ during recessions and ________ during expansions.
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rises, falls
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Who is considered the father of macroeconomics?
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John Maynard Keynes
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According to classical economics, the economy
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is self correcting
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Suppose the economy suffers a high rate of unemployment. According to Keynesian economists, the government should increase employment by
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increasing governement spending
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Prices that do not adjust rapidly to maintain equality between quantity supplied and quantity demanded are
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sticky prices
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Since 1970, the US economy has experienced five
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recessions
