DC Eco – Flashcards
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A student will decide to attend class when
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the marginal benefit of attending exceeds the marginal cost of attending
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Which of the following best describes the concept of utility and economic behavior?
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Satisfaction from consuming goods or services
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In a market system scarce goods are allocated through the operation of
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what must be sacrificed in using a resource for its next best use
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Suppose a city block was going to be used for a parking lot. The opportunity cost would be
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greater in New York City because the alternative uses of the block are more valuable
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Which of the following represents a positive economic statement?
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The unemployment rate is 4.8 percent
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Which of the following represent a normative economic statement?
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The unemployment rate is higher than it was last year.
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Which of the following is not a key element of the scientific method?
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designing data
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The scientific method is the technique used by economists to determine
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economic principles
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Economic resources are the
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natural, human, and manufactured inputs used to produce goods and services.
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Economists classify resources as
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labor, land, real capital, and entrepreneurs
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Because economic resources are used to produce goods and services, they are called
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inputs or products
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A student will decide to attend class when
the marginal benefit of attending exceeds the marginal cost of attending.
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Explanation:
The marginal benefits of attending class may include the acquisition of knowledge, participation in discussion, and better preparation for an upcoming examination. Marginal costs may include lost opportunities for sleep, meals, or studying for other classes.
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Which of the following best describes the concept of utility and economic behavior?
Satisfaction from consuming goods or services.
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Explanation:
"Utility" refers to the pleasure, happiness, or satisfaction gained from engaging in an activity (eating a meal, attending a ball game, etc.). It does not refer to the usefulness of a product. Utility is an important component of purposeful behavior because people will allocate their scarce time, energy, and money in an attempt to gain the most utility possible.
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In a market system scarce goods are allocated through the operation of what must be sacrificed in using a resource for its next best use. Suppose a city block was going to be used for a parking lot. The opportunity cost would be greater in New York City because the alternative uses of the block are more valuable.
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Explanation:
An opportunity cost is what was sacrificed to do or acquire something else. The condition of scarcity creates opportunity cost. If there was no scarcity, there would be no need to sacrifice one thing to acquire another.
The opportunity cost would be much higher in New York City as the alternative uses for that square block are much more valuable than for a typical suburban city block.
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Which of the following represents a positive economic statement?
The unemployment rate is 4.8 percent.
Which of the following represent a normative economic statement?
The government ought to lower taxes so people have more money.
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Explanation:
Positive economic statement describe "what is." Normative economic statements describe "what should be."
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Specify the typical shapes of marginal-benefit and marginal-cost curves.
The marginal benefit curve is .... correct sloping.
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downward
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The marginal cost curve is ....correct sloping
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upward
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With these curves, the optimal allocation of resources to a particular product will occur when
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MC=MB
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If current output is such that marginal cost exceeds marginal benefit, should more or fewer resources be allocated to this product?
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Fewer
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Suppose that, on the basis of a nation's production possibilities curve, an economy must sacrifice 10,000 pizzas domestically to get the 1 additional industrial robot it desires, but that it can get the robot from another country in exchange for 9,000 pizzas.
Now consider the following statement: "Through international specialization and trade, a nation can reduce its opportunity cost of obtaining goods and thus 'move outside its production possibilities curve.'"
Which of the following explains the relationship between the situation described and the statement?
Specialization and trade have the same effect as having more and better resources or discovering improved production techniques.
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Explanation:
The message of the production possibilities curve is that an individual nation is limited to the combinations of output indicated by its production possibilities curve. International specialization means directing domestic resources to output which a nation is highly efficient at producing. International trade involves the exchange of these goods for goods produced abroad. Specialization and trade have the same effect as having more and better resources or discovering improved production techniques. The output gains from greater international specialization and trade are the equivalent of economic growth.
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Studies indicate that married men on average earn more income than unmarried men of the same age and education level. From this statement, we can conclude that
there is a correlation, but marriage is not necessarily the cause of higher income for married men.
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Explanation:
Correlation does not necessarily mean that there is causation. The relationship could be purely coincidental or dependent on some other factor not included in the analysis. It is also possible that higher income is the variable that "causes" marriage
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Which of the following is not a key element of the scientific method?
Designing data
The scientific method is the technique used by economists to determine
economic principles.
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Explanation:
The key elements include the gathering of data (observation), the formulation of possible explanations (hypothesis), testing the hypothesis, determining the validity of the hypothesis, and repeated testing of hypotheses that have appeared to be valid in prior tests. Data is gathered or collected not designed.
The scientific method is the technique used by economists to determine economic laws or principles. These laws or principles are formulated to explain and/or predict behavior of individuals or institutions.
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Economic resources are the
natural, human, and manufactured inputs used to produce goods and services.
Economists classify resources as
labor, land, real capital, and entrepreneurs.
Because economic resources are used to produce goods and services, they are called factors of production or inputs.
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Explanation:
Economic resources are the natural, human, and manufactured inputs used to produce goods and services. Technological resources are manufactured resources. Economic resources fall into four main categories: labor, land (natural resources), real capital (machines, factories, buildings, etc.,) and entrepreneurs. Financial capital is not classified as a resource. It is used to facilitate resources transactions.
Economic resources fall into four main categories: labor, land (natural resources), real capital (machines, factories, buildings, etc.,) and entrepreneurs. Financial capital is not classified as a resource. It is used to facilitate resources transactions.
Economic resources are also called factors of production because they are used to produce goods and services. They are called inputs because they go into a production process (like ingredients go into a bowl to make a cake), with the resulting goods and services also being referred to as output.
