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Flashcards About Econ chapter 1

Lewis Edwards

22 July 2021

question

Which of the following is not a central focus of the "economic perspective"?

answer

The scientific method.

question

The basic economic problem is essentially one of deciding how to make the best use of:

answer

limited resources to satisfy unlimited economic wants.

question

The key economic concept that serves as the basis for the study of economics is:

answer

scarcity.

question

As a consequence of the condition of scarcity:

answer

individuals and communities have to make choices from among alternatives.

question

What is the economic meaning of the expression that "there is no such thing as a free lunch"?

answer

It means that there is an opportunity cost when resources are used to provide "free" products.

question

One major feature of the economic perspective is:

answer

the assumption of purposeful behavior by individuals.

question

The utility of a specific product:

answer

varies from person to person using the product.

question

Which expression is another way of saying "marginal cost"?

answer

additional cost

question

Henry wants to buy a book. The economic perspective suggests that Henry will buy the book if:

answer

the marginal benefit of the book is greater than its marginal cost.

question

From an economic perspective, when a student decides to attend another year of college, the student has concluded that the marginal:

answer

benefits of attending college are greater than the marginal costs.

question

Economic models do not reflect the full complexity of reality and instead are based on:

answer

purposeful simplifications.

question

The purpose of the ceteris paribus assumption used in economic analysis is to:

answer

restrict the analysis to the effect of a single economic factor.

question

Which question is an illustration of a macroeconomic question?

answer

How does a cut in the business tax rate increase business investment in the economy?

question

Which is an illustration of a microeconomic question?

answer

Will a new type of television set increase the number of buyers?

question

Which question is an example of a microeconomic question?

answer

Will the merger of two airlines likely lead to higher airline ticket prices?

question

Macroeconomics focuses on:

answer

total output and the general level of prices in the economy.

question

The study of how one business firm sets its prices would fall under the study of:

answer

microeconomics.

question

Which would be considered a macroeconomic study? A study of the effect of:

answer

government spending to increase employment.

question

Which question is an illustration of a macroeconomic question?

answer

Is the level of employment in the economy sensitive to the quantity of consumer spending?

question

The macroeconomist would most likely study:

answer

the effects of a reduction in income tax rates on the nation's total output.

question

Suppose a consumer has an income of $16, the price of A is $2, and the price of B is $1. Which combination is on the consumer's budget line?

answer

5A and 6B

question

Assume that a consumer purchases two products and there is an increase in the consumer's money income. All other things equal, the most likely effect is:

answer

an outward shift in the budget line because the consumer can now purchase more of both products.

question

The individual who brings together economic resources and assumes the risk in a capitalist economy is called the:

answer

entrepreneur

question

Which would not be considered as capital (or an economic resource) by an economist?

answer

a share of corporate stock issued by General Motors

question

Which is a factor of production?

answer

capital

question

The production possibilities curve represents which of the following?

answer

maximum combinations of goods attainable with fixed resources

question

A movement along the production possibilities curve would imply that:

answer

society has chosen a different set of outputs.

question

Which statement is an economic rationale for the law of increasing opportunity cost?

answer

Many economic resources are better at producing one product than another.

question

The opportunity cost of a new national park is the:

answer

alternative uses for the land and funding for the park.

question

In a production possibilities table, the most-valued or optimal point for society is determined by:

answer

the equality of marginal benefits and marginal costs.

question

A nation that devotes more of its resources to capital investment is likely to:

answer

shift outward its production possibilities curve.

question

The individual who brings together economic resources and assumes the risk in a capitalist economy is called the:

answer

entrepreneur.

question

The utility of a specific product:

answer

varies from person to person using the product.

question

If an economy that produces capital and consumer goods is operating at a point on its production possibilities curve, this indicates that:

answer

more capital goods can be produced only at the cost of some consumer goods.

question

The opportunity cost of a new national park is the:

answer

alternative uses for the land and funding for the park.

question

If country A has a comparative advantage in the production of good X over country B, then:

answer

The opportunity cost of producing X in country A is lower than in country B

question

Which is an illustration of a microeconomic question?

answer

Will a new type of television set increase the number of buyers?

question

What is the economic meaning of the expression that "there is no such thing as a free lunch"?

answer

It means that there is an opportunity cost when resources are used to provide "free" products.

question

Economic growth may be represented by a:

answer

rightward shift of the production possibilities curve.

question

Which question is an illustration of a macroeconomic question?

answer

How does a cut in the business tax rate increase business investment in the economy?

question

The opportunity cost of producing 100 barrels of chemicals in Germany is one ton of steel. In France, the opportunity cost of producing 100 barrels of chemicals is two tons of steel. In this case:

answer

Germany has a comparative advantage in the production of chemicals

question

Assume that money income decreases and the prices of products X and Y both decrease, then the budget line:

answer

may shift either outward from or inward to the origin.

question

Money is not considered to be an economic resource because:

answer

as such it is not productive.

question

Which statement is an economic rationale for the law of increasing opportunity cost?

answer

Many economic resources are better at producing one product than another.

question

Macroeconomics focuses on:

answer

total output and the general level of prices in the economy.

question

Opportunity cost is best defined as:

answer

the value of the best foregone alternative.

question

Microeconomics focuses on:

answer

the individual units that make up the whole of the economy.

question

30. Economic models do not reflect the full complexity of reality and instead are based on:

answer

purposeful simplifications.

question

31. The alternative combinations of two goods which a consumer can purchase with a given money income is:

answer

a budget line.

question

32. A movement along the production possibilities curve would imply that:

answer

society has chosen a different set of outputs.

question

When an economist says that there is "too much of a good thing," the economist is suggesting that: wants are not unlimited.

answer

the marginal benefit of the thing is less than the marginal cost.

question

The production possibilities for country X is either 6,000 bushels of soybeans or 10,000 bushels of wheat. The production possibilities for country Y is 2,000 bushels of soybeans and 4,000 bushels of wheat. Which of the following is true?

answer

Country Y should specialize in the growing of soybeans according to the principle of comparative advantage

question

How is the economic perspective reflected in lines for fast food?

answer

Customers select the shortest line because they believe it will reduce their time cost of obtaining food.

question

A point inside the production possibilities curve is:

answer

attainable, but the economy is inefficient.

question

Which question is an example of a microeconomic question?

answer

Will the merger of two airlines likely lead to higher airline ticket prices?

question

The production possibilities curve bows outward from the origin because:

answer

opportunity costs increase as the production of a good increases.

question

The term scarcity in economics refers to the fact that:

answer

no country can produce enough products to satisfy everybody's economic wants.

question

From an economic perspective, when a student decides to attend another year of college, the student has concluded that the marginal:

answer

benefits of attending college are greater than the marginal costs.

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question

Which of the following is not a central focus of the "economic perspective"?

answer

The scientific method.

question

The basic economic problem is essentially one of deciding how to make the best use of:

answer

limited resources to satisfy unlimited economic wants.

question

The key economic concept that serves as the basis for the study of economics is:

answer

scarcity.

question

As a consequence of the condition of scarcity:

answer

individuals and communities have to make choices from among alternatives.

question

What is the economic meaning of the expression that "there is no such thing as a free lunch"?

answer

It means that there is an opportunity cost when resources are used to provide "free" products.

question

One major feature of the economic perspective is:

answer

the assumption of purposeful behavior by individuals.

question

The utility of a specific product:

answer

varies from person to person using the product.

question

Which expression is another way of saying "marginal cost"?

answer

additional cost

question

Henry wants to buy a book. The economic perspective suggests that Henry will buy the book if:

answer

the marginal benefit of the book is greater than its marginal cost.

question

From an economic perspective, when a student decides to attend another year of college, the student has concluded that the marginal:

answer

benefits of attending college are greater than the marginal costs.

question

Economic models do not reflect the full complexity of reality and instead are based on:

answer

purposeful simplifications.

question

The purpose of the ceteris paribus assumption used in economic analysis is to:

answer

restrict the analysis to the effect of a single economic factor.

question

Which question is an illustration of a macroeconomic question?

answer

How does a cut in the business tax rate increase business investment in the economy?

question

Which is an illustration of a microeconomic question?

answer

Will a new type of television set increase the number of buyers?

question

Which question is an example of a microeconomic question?

answer

Will the merger of two airlines likely lead to higher airline ticket prices?

question

Macroeconomics focuses on:

answer

total output and the general level of prices in the economy.

question

The study of how one business firm sets its prices would fall under the study of:

answer

microeconomics.

question

Which would be considered a macroeconomic study? A study of the effect of:

answer

government spending to increase employment.

question

Which question is an illustration of a macroeconomic question?

answer

Is the level of employment in the economy sensitive to the quantity of consumer spending?

question

The macroeconomist would most likely study:

answer

the effects of a reduction in income tax rates on the nation's total output.

question

Suppose a consumer has an income of $16, the price of A is $2, and the price of B is $1. Which combination is on the consumer's budget line?

answer

5A and 6B

question

Assume that a consumer purchases two products and there is an increase in the consumer's money income. All other things equal, the most likely effect is:

answer

an outward shift in the budget line because the consumer can now purchase more of both products.

question

The individual who brings together economic resources and assumes the risk in a capitalist economy is called the:

answer

entrepreneur

question

Which would not be considered as capital (or an economic resource) by an economist?

answer

a share of corporate stock issued by General Motors

question

Which is a factor of production?

answer

capital

question

The production possibilities curve represents which of the following?

answer

maximum combinations of goods attainable with fixed resources

question

A movement along the production possibilities curve would imply that:

answer

society has chosen a different set of outputs.

question

Which statement is an economic rationale for the law of increasing opportunity cost?

answer

Many economic resources are better at producing one product than another.

question

The opportunity cost of a new national park is the:

answer

alternative uses for the land and funding for the park.

question

In a production possibilities table, the most-valued or optimal point for society is determined by:

answer

the equality of marginal benefits and marginal costs.

question

A nation that devotes more of its resources to capital investment is likely to:

answer

shift outward its production possibilities curve.

question

The individual who brings together economic resources and assumes the risk in a capitalist economy is called the:

answer

entrepreneur.

question

The utility of a specific product:

answer

varies from person to person using the product.

question

If an economy that produces capital and consumer goods is operating at a point on its production possibilities curve, this indicates that:

answer

more capital goods can be produced only at the cost of some consumer goods.

question

The opportunity cost of a new national park is the:

answer

alternative uses for the land and funding for the park.

question

If country A has a comparative advantage in the production of good X over country B, then:

answer

The opportunity cost of producing X in country A is lower than in country B

question

Which is an illustration of a microeconomic question?

answer

Will a new type of television set increase the number of buyers?

question

What is the economic meaning of the expression that "there is no such thing as a free lunch"?

answer

It means that there is an opportunity cost when resources are used to provide "free" products.

question

Economic growth may be represented by a:

answer

rightward shift of the production possibilities curve.

question

Which question is an illustration of a macroeconomic question?

answer

How does a cut in the business tax rate increase business investment in the economy?

question

The opportunity cost of producing 100 barrels of chemicals in Germany is one ton of steel. In France, the opportunity cost of producing 100 barrels of chemicals is two tons of steel. In this case:

answer

Germany has a comparative advantage in the production of chemicals

question

Assume that money income decreases and the prices of products X and Y both decrease, then the budget line:

answer

may shift either outward from or inward to the origin.

question

Money is not considered to be an economic resource because:

answer

as such it is not productive.

question

Which statement is an economic rationale for the law of increasing opportunity cost?

answer

Many economic resources are better at producing one product than another.

question

Macroeconomics focuses on:

answer

total output and the general level of prices in the economy.

question

Opportunity cost is best defined as:

answer

the value of the best foregone alternative.

question

Microeconomics focuses on:

answer

the individual units that make up the whole of the economy.

question

30. Economic models do not reflect the full complexity of reality and instead are based on:

answer

purposeful simplifications.

question

31. The alternative combinations of two goods which a consumer can purchase with a given money income is:

answer

a budget line.

question

32. A movement along the production possibilities curve would imply that:

answer

society has chosen a different set of outputs.

question

When an economist says that there is "too much of a good thing," the economist is suggesting that: wants are not unlimited.

answer

the marginal benefit of the thing is less than the marginal cost.

question

answer

Country Y should specialize in the growing of soybeans according to the principle of comparative advantage

question

How is the economic perspective reflected in lines for fast food?

answer

Customers select the shortest line because they believe it will reduce their time cost of obtaining food.

question

A point inside the production possibilities curve is:

answer

attainable, but the economy is inefficient.

question

Which question is an example of a microeconomic question?

answer

Will the merger of two airlines likely lead to higher airline ticket prices?

question

The production possibilities curve bows outward from the origin because:

answer

opportunity costs increase as the production of a good increases.

question

The term scarcity in economics refers to the fact that:

answer

no country can produce enough products to satisfy everybody's economic wants.

question

From an economic perspective, when a student decides to attend another year of college, the student has concluded that the marginal:

answer

benefits of attending college are greater than the marginal costs.

Flashcards About Econ chapter 1

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