question

capital refers to the knowledge and skills that people acquire to increase productivity.

answer

Human

question

the value of the opportunity that you give up when you choose one activity instead of another.

answer

Opportunity Cost

question

rational decision making is based on three assumptions.

answer

Marginal Decision Making

question

the term "scarcity" describes the fact that people's____________ wants cannot be completely satisfied with __________ resources.

answer

-Unlimited -Limited

question

when you decide after studying for three hours that another hour of sleep is more beneficial to you that a fourth hour of studying, you are engaging in:

answer

Marginal Decision Making

question

resources sometimes referred to as "gift of nature" are classified as________.

answer

Land

question

capital refers to tangible items that are created to increase productivity.

answer

Physical

question

the idea that people choose to do the things that interest them is.

answer

Self-Interest

question

Because resources are scarce, they must be ______________ between competing uses.

answer

Allocated

question

The tools, machinery, infrastructure, and knowledge used to produce good and services are classified as the resource category of ___________.

answer

Capital

question

Capital is sometime divided into two categories: _________ capital and __________ capital.

answer

-Physical -Human

question

Total benefits as the level of the activity increases by one unit.

answer

The marginal benefit of an activity can be found by calculating the change in:

question

The marginal benefit equals the total cost.

answer

The optimal level of economic activity occurs when:

question

Increasing marginal cost describes the ___________ relationship between the marginal cost associated with the use of a good or a service and the quantity produced.

answer

Positive

question

Assuming that people are self-interested recognizes that people will make mistakes.

answer

True

question

Interest is the idea that people choose to do the things that interest them.

answer

Self

question

Means that resources are limited.

answer

Scarcity

question

Due to the ________ of natural resources, we cannot have all the housing and all the forests we may want.

answer

Scarcity

question

The marginal benefits equals the marginal cost.

answer

Equilibrium Occurs When:

question

When the marginal benefit equals the marginal cost, that stable level is an _________ level.

answer

Optimal

question

The additional benefit associated with one more unit of an activity is the _______ benefit.

answer

Marginal

question

Total benefits as the level of the activity increases by one unit.

answer

The marginal benefit of an activity can be found by calculating the change in:

question

If we assume that people are self-interested, they will never do things that might make them worse off.

answer

False

question

Assuming that people are self-interested recognizes that people will make mistakes.

answer

True

question

the more of a good or a service that is consumed in a given period of time, the lower the marginal________ that is associated with each additional unit.

answer

Benefit

question

The more of a good or a service that is produced in a given period of time, the higher the marginal ________ that is associated with each additional unit.

answer

Cost

question

When that marginal _______ equals the marginal ______, there is no incentive to either increase or decrease the level of the activity performed.

answer

Benefit / Cost

question

When the marginal benefits equals the marginal cost, that stable level is an ________________ level.

answer

Equilibrium

question

When spending more money on one thing means that you have less money to spend on something else, you have experiences ___________________________.

answer

Opportunity Cost

question

The quality of an _____________ model can be measured by how well it reflects reality and weather it gives us insights that can used in the real world.

answer

Economic

question

As the amount of an activity increases, its marginal _________ falls and its marginal ______ rises.

answer

Cost

question

How we choose to utilize the _________ that are available to us ultimately determines which goods and services get produced.

answer

Resources

question

Because the world is characterized by scarcity, people must allocate the limited ________ at their disposal among many competing uses.

answer

Resources

question

Economics is the study of how individuals and societies allocate__________ resources among many competing uses.

answer

Scarce

question

The quality of an economic model can be measured by how well it reflects reality and whether it gives us insights that can used in the real world.

answer

True

question

Anything that is used to produce a good or a service, whether it is provided by nature or is manufactured, is a(n) ___________.

answer

Resources

question

Production Possibilities Schedule

answer

A table that shows the possible combinations of two different goods or service that can be produced with fixed resources and technology is the:

question

When _______ are fixed, increasing the production of one good causes a decrease in the production of the other.

answer

Resources

question

Possible but Inefficient

answer

Combinations in the interior of the production possibilities frontier are:

question

The process of assigning a good, a service , or a resource to one use instead of another describes "___________".

answer

Allocation

question

Because resources are ________, they must be allocated between competing uses.

answer

Scarce

question

A major problem faced by developing countries is the relative ___________ of drinkable water as compared to water in general.

answer

Scarcity

question

Because the world is characterized by scarcity, people must _________ the resources at their disposal to many competing uses.

answer

Allocate

question

Combinations _________ the production possibilities frontier are possible but inefficient with the current resources and technology.

answer

Within

question

Rational Decision making

answer

Self-interest, marginal decision making, and optimization form the basis for:

question

The additional cost associated with one more unit of an activity is the _________ cost.

answer

Marginal

question

The ___________ cost associated with one more unit of an activity is the marginal cost.

answer

Additional

question

Each row of the production possibilities schedule illustrates the ___________ amount of a good service that may be produced given the production of the other.

answer

Maximum

question

Production Possibilities Schedule

answer

A table that shows the possible combinations of two different goods or services that can be produced with fixed resources and technology is the:

question

At a local town council, people debated a proposal that would change the _________ of public space for recreational use by demolishing a skate park and building an arboretum.

answer

Allocation

question

Each row of the ___________ ___________ schedule illustrates the maximum amount of a good or a service that can be produced given the production of the other.

answer

Production Possiblities

question

Energy is ____ scarce than wind energy.

answer

Less

question

A Useful way to visually represent that data in a production possibilities schedule is by means of a _____ called a production possibilities frontier.

answer

Graph

question

Combinations ______ the production possibilities frontier are impossible with the current resources and technology.

answer

Beyond

question

Decreasing marginal benefit describes the _________ relationship between the marginal benefit associated with the use of a good or a service and the quantity consumed.

answer

Negative

question

Less than the buyer's opportunity cost but greater than the seller's opportunity cost.

answer

For two parties to be willing to trade, the terms of trade must be:

question

if you are relatively at something , then you are sald to have a(n) ____________ advantage in that activity.

answer

Comparative

question

-Factors of Production -Inputs

answer

In economics, resource are also called:

question

The circular flow model shows how ___________ and _____ interact in two key markets: the resource market and the product market.

answer

-Household -Firms

question

Is most plainly visible when spending on the thing means that less money can be spent on another thing.

answer

Opportunity Cost

question

Individuals and countries specialize because of ______ in opportunity cost

answer

Differences

question

The circular flow model shows how household and firms interact in two key markets: the resource market and the ________ market.

answer

Product

question

Self-Interest

answer

The idea that people choose to do the things that interest them is:

question

The producer with the lowest relative _____________ cost as a comparative advantage and should specialize in the production of that good.

answer

Opportunity

question

Specialization is based on ____________ advantage.

answer

Comparative

question

Differences in available resources and technology

answer

The opportunity cost of producing a good for one producer may be different from that of another because of:

question

In the circular flow model, only by buying resources can _____ produce the output they will sell to household to generate revenue.

answer

Firms

question

A useful way t visually represent the data in a production possibilities schedule is by means of a graph called production possibilities_________.

answer

Frontier

question

A net gain to the economy.

answer

If an activity if performed where the marginal benefits is greater that the marginal cost (MB>MC), there is :

question

In the circular flow model, only by selling resources can _______ obtain the income they need to buy the products they want to consume.

answer

Households

question

Describes the trade-off resulting from the production of Good X in terms of Good Y.

answer

On a production possibilities frontier (PPF) with good X on the horizontal axis and good Y on the vertical axis, we can say that the slope of the PPF ( In absolute value) equals the opportunity cost of production good X. This is true because the slope.

question

Constant Opportunity Cost

answer

When the opportunity cost associated with increasing the production of one good or service in term of another is constant at every level of production, There is;

question

In the circular flow model, only by buying ____________ can firms produce the output they will sell to households to generate revenue.

answer

Resources

question

MB<MC

answer

A waste of resources that could have been used to produce something else occurs when:

question

Being the lowest relative opportunity cost producer of a good.

answer

Comparative Advantage Refers to:

question

If the demand for the good or service you produce decreases, its price and your income will decrease too.

answer

The haem in specializing is that

question

When resources are allocated in such a way that it is possible to increase the production of one good only by decreasing the production of another, then the allocation of resources is ___________.

answer

Efficient

question

He or She will be able to sell at a lower price than other producers.

answer

When a producer has a low opportunity cost, that producer has an advantage in the market because.

question

____________________ in trade cause individuals and nations to become interdependent.

answer

Specialization

question

Comparative advantage is the foundation for establishing the benefits of ______.

answer

Trade

question

If you are "relatively" better at something, you have a(n) _________ advantage.

answer

Comparative

question

As the amount of an activity increases, its marginal ______ falls and its marginal _____ rises.

answer

-Benefit -Cost

question

The terms associated with the trade.

answer

Whether a good or a service will be traded depends largely on :

question

A producer has a(n) __________ advantage in the production of a good or a service if his or her relative opportunity cost of production is lower than the opportunity cost of the other producers.

answer

Comparative

question

When resources are ________, increasing the production of one good causes a decrease in the production of the other.

answer

Fixed

question

______________advantage is the foundation for establishing the benefits of trade.

answer

Comparative

question

Does not have to be monetary.

answer

The wealth, or additional well-being , created by trade.

question

Producing a good or a service at a _____ opportunity cost giving the producer a comparative advantage in the market.

answer

Low

question

Some resources are better suited for producing some good or service than others.

answer

In the Real World, the opportunity cost increases as production increases, Because:

question

The law of ___________ __________ cost says that because some resources are better suited to producing one good or service than another, as the production of a good or a service increases, the _______ cost of each additional unit rises.

answer

-Increasing Opportunity -Opportunity

question

When production is characterized by ________ opportunity cost, the resulting production possibilities frontier will be a straight line.

answer

Constant

question

The simple model of production assumes that the opportunity cost or production is _______.

answer

Constant

question

Comparing the level of consumption available before and after the trade.

answer

Gain from trade can be measured by.

question

Gain from trade.

answer

The benefit, or wealth, that accrues to a buyer or a seller as a result of trading one good, service, or resource for another is the:

question

Specialization causes individuals and nations to become _____________.

answer

Interdependent

question

____________ causes individuals and nations to become independent.

answer

Specialization

question

When you see a production possibilities frontier (PPF) drawn as a straight line, the opportunity cost of one good or service (in terms of units of the other good or service that must be given up) is assumed to be __________.

answer

Constant

question

Law of increasing opportunity cost.

answer

Suppose a farmer has three kinds of land for growing peaches; good, better, and best. As the farmer increases production, she will use that best land first, and costs will be low. At some point , she will run out of the best land and will have to start using the better land, and cost will be a little higher. this describes the:

question

It is possible to operate outside the production possibilities frontier.

answer

Only with trade:

question

When resources are allocated in such a way that it is possible to increase the production of one good without decreasing the production of another, then the allocation of recourse is ____________.

answer

Inefficient

question

If the price is too ____, producers will not be eager to sell , but buyers will be willing and able to buy.

answer

Low

question

Marginal Decision Making

answer

When you decide to turn off the bedroom light on your way to the kitchen so that you can save a little money on your electric bill, you are engaging in:

question

___________________ ability is the talent or ability to combine land, labor, and capital t produce goods and services.

answer

Entrepreneurial

question

Circular Flow Model.

answer

A model that concisely describes how goods, services, resources, and money flow back and forth in an economy is the :

question

The study of the economy at the small-scale level, examining individuals and specific markets.

answer

Microeconomics

question

The study of the economy at the large-scale level, examining total output, the price level, and other aggregate measures of the economy.

answer

Macroeconomics

question

Anything that is used to produce a good or service, whether it is provided by nature or is manufactured.

answer

Resource

question

All natural resources used in production; sometimes referred to as "Gift of Nature."

answer

Land

question

All physical and mental activity devoted to producing good and service.

answer

Labor

question

The tools, machinery, infrastructure, and knowledge used to produce good and services. Capital is sometimes divided into "physical" and "Human" capital. Physical refers to tangible items that are created to increase productivity; human capital refers to the knowledge and skills that people acquire in order to increase productivity.

answer

Capital

question

The talent or ability to combine land, labor, and capital to produce goods and services. Entrepreneurial ability is different from human capital in that it primarily involves assuming risk and organizing resources into a productive process rather using resources in production.

answer

Entrepreneurial Ability

question

A condition that results from the inability of limited resources to satisfy unlimited wants.

answer

Scarcity

question

The comparison of the scarcity of one good, service, or resource to that of another.

answer

Relative Scarcity

question

The process of assigning a good service, or resource to one use instead of another.

answer

Allocation

question

The value of the next-best forgone alternative; the value of the opportunity that you gave up when you chose one activity, or opportunity, instead of another. Opportunity cost exist because of scarcity.

answer

Opportunity Cost

question

The idea that people choose to do the things that interest them.

answer

Self-interest

question

The process of making choices in increments by evaluating the additional, or marginal, benefit against the additional, or marginal, cost of an action.

answer

Marginal Decision Making

question

The idea that people make choices in order to maximize the overall benefit, or utility , of an action subject to its cost; people will engage in an activity as long as the marginal benefit of an activity is greater than or equal to its marginal cost.

answer

Optimization

question

The additional benefit associated with one more unit of an activity.

answer

Marginal Benefit

question

The additional cost associated with one more unit of an activity.

answer

Marginal Cost

question

The negative relationship between the marginal the marginal benefit associated with the use of a good or service and the quantity consumed; the more of a good or service is consumed, in a given period of time , the lower the marginal benefit associated with each additional unit.

answer

Decreasing Marginal Benefit

question

The level of output where the marginal benefit of the last unit produced and consumed is equal to the marginal cost of that unit.

answer

Optimal Level of Output

question

A table that shows the possible combinations of two different goods or services that can be produced with fixed resources and technology.

answer

Production Possibilities Schedule

question

A characteristic of production such that the opportunity cost associated with increasing the production of one good or service, in terms of another, is constant at every level of production.

answer

Constant Opportunity Costs

question

The ability to produce a good or service at a lower relative opportunity cost than another producer.

answer

Comparative Advantage

question

The practice of producing a single good or service rather than producing multiple goods or services.

answer

Specialization

question

The price of one good, service, or resource in term of another.

answer

Terms of trade

question

The benefit, or wealth, that accrues to a buyer or seller as a result of trading one goods, service, or resource for another. The wealth, or additional well-being, created by trade does not have to be monetary.

answer

Gain from trade

question

A law on economics that reflects the observation that since some resources are better suited to producing one good or service than another, as the production of a good or service increses, the opportunity cost of each additional unit rises.

answer

Law of increasing Opportunity Cost

question

A model that concisely describes how goods, services, resources, and money flow back and forth in an economy.

answer

Circular Flow Model

ECN 201 (Fundamentals) – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards