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ECON Test #1 – Flashcards

Richard Lattimore

8 July 2022

question

The highest-valued 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

True or false: Economics, as a social science, is concerned with how to make money?

answer

False

question

________ is the notion that, in general, the quantity desired of economic goods (or services) exceeds the quantity available.

answer

Scarcity

question

Which of the following describes the concept of rational self-interest?

answer

Individuals look for and pursue opportunities to increase their utility or level of personal satisfaction Individuals allocate their resources to maximize their satisfaction Individuals weigh the costs and benefits of their decisions

question

The trade deficit between the U.S. and China grew between 2000 and 2009

answer

Example of Macroeconomics

question

Recently, Chase Bank lowered its interest rate on business loans by 2 percentage points

answer

Example of Microeconomics

question

The real GDP for the United States grew by 2.2 percent in 2007

answer

Example of Macroeconomics

question

An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise.

answer

Example of Microeconomics

question

The Consumer Price Index (CPI) rose by 3 percent in 2007

answer

Example of Macroeconomics

question

A U.S. software film laid off 15 workers last month and transferred the work to India

answer

Example of Microeconomics

question

True or false: The three main decisions that must be addressed by an economic system include what goods are to be produced, who will produce them, and where they will be produced.

answer

False

question

__________ is the discipline of economics concerned with individual units such as a person, household, firm or industry.

answer

Microeconomics

question

The branch of economics that studies the economy as a whole or in the aggregate is known as:

answer

Macroeconomics

question

The economic question of "__________ to produce" is about decisions related to the mix (quantity and type) of goods and services to make available in a given economy

answer

"what to produce"

question

Which of the following are all possible because of private property rights in a market system?

answer

Economic growth Exchange Maintenance of property Innovation Investment

question

An _______ outcome is one each individual affected is treated fairly

answer

Equitable

question

Economics assumes that human behavior reflects "_______ self-interest."

answer

"Rational self-interest"

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 or services, there is:

answer

A cost borne by society in utilizing these resources to produce any good or service. No free lunch.

question

In economics, an incremental or gradual change is also known as a _________

answer

marginal change

question

Which of the following define positive economics

answer

Statements based on facts empirical cause and effect relationships Measurable or scientific statements about economic behavior

question

Normative Economics is

answer

based on subjective or value judgements

question

Economics is a ________ science concerned with the allocation of __________ resources to meet the unlimited wants of the members of a given society

answer

SOCIAL science concerned with the allocation of SCARCE

question

Consumers derive personal satisfaction from goods and services by

answer

Allocating their time, energy, money and other resources so as to maximize their satisfaction from consuming these goods Acting in their own self interest

question

The economic decisions of different individuals are considered to be rational when these individuals:

answer

compare benefits and costs

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

Private property rights, coupled with the freedom to negotiate binding legal _______ enables individuals and businesses to obtain, use and dispose of property resources as they see fit.

answer

contracts

question

_______ economic analysis concerns what is, whereas ___________ economic analysis represent subjective statements about what ought to be.

answer

Positive, normative

question

Which of the following describe the role of government in the United States' form of capitalism?

answer

Provides certain goods and services that would otherwise be underproduced or not produced at all Modifies the distribution of income Promotes economics stability and growth Provides the rules for economic activity

question

When consumers purchase a good or service, they do so in order to _______ their level of utility or well being

answer

increase

question

Because consumers behave in a rationally self-interested manner, the consumer will purchase a good or service:

answer

when the marginal benefit is greater than or equal to the marginal cost

question

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

answer

Marginal analysis

question

Private property helps to facilitate exchange in which type of economic system?

answer

Free market system

question

Which of the following are economic measures are considered in macroeconomic analysis?

answer

The level of prices in the economy The unemployment rate International trade National income

question

Property rights encourage:

answer

exchange maintenance of property innovation economic growth investment

question

True or false: Positive economics encourages value judgements.

answer

False

question

Which of the following best, clarifies the "other-things-equal" assumption?

answer

All variables except those under immediate consideration are held constant for a particular analysis

question

Which of the following are issues most explored in microeconomics?

answer

Measuring the price of specific goods The expenditures of a government entity A firms decision to hire more workers Measuring total revenues of a firm or household

question

Which of the following statements or questions represent positive economics?

answer

The unemployment rate in Mexico is higher than in the U.S. As the price of airfare falls, airlines experience a spike in business If the government increases the minimum wage, the unemployment rate will rise

question

When individuals take into account the costs and benefits of their economic decisions, these decisions are considered to be_________.

answer

rational

question

Which of the following statements or questions represent normative economics?

answer

The government ought to ball out distressed banks Cable companies should merge because they result in more competitive pricing What should the Federal minimum wage be? The government should increase the minimum wage.

question

Positive economics is concerned with _________, whereas normative economics deals with __________.

answer

What is, what should be

question

Which of the following define ceteris paribus?

answer

The idea that factors other than those being considered in a particular analysis do not change Other-things-equal assumption

question

In the type of capitalism practiced in the U.S. and most other countries, the government plays __________ role.

answer

a substantial

question

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

answer

investment

question

The factors of production include:

answer

Land Labor Capital Entrepreneurship

question

In addition to entrepreneurship, the factor of production (resources) defined as ___________ consists of the physical actions and mental activities that people contribute to the production of goods and services.

answer

Labor

question

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

answer

A trade-off

question

Factories, storage, transportation and distribution facilities, as well as tools and machinery are all examples of physical ____________ goods.

answer

capital

question

From an economic standpoint______ including all natural resources used in the production process

answer

land

question

Combinations of goods that fall on the production possible curve:

answer

are attainable utilize all of an economies resources are efficiently produced represent economic growth

question

A production possibilities curve (frontier) shows the attainable combination:

answer

of two goods that can be produced given a specific set of resources

question

Capital goods differ from consumer goods in that:

answer

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

question

Arable land, water machinery and professional baseball player are all considered scarce economic __________ to production.

answer

inputs

question

Combinations of output that fall inside the production possibilities curve represent:

answer

Less total output in an economy Goods that are attainable Inefficient use of resources

question

Select all choices from the following that would be considered land to an economist

answer

Forests Oil and mineral deposits Arable Land Sunlight Water

question

Points lying _______ the production possibilities curve (frontier) would represent a greater but unachievable level of output than that at any point on the curve

answer

outside

question

Constant opportunity cost is best represented by:

answer

The straight-line production possibilities

question

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

answer

Choices Opportunity Cost Trade-offs

question

Points_______ the production possibilities curve are attainable so long as an economy uses all of its available resources.

answer

Along

question

A nations production possibilities curve (frontier) can shift outward:

answer

As a result of specialization and trade With an increase in the quality and quantity of resources Through the use of improved production techniques

question

In economics, investment describes spending:

answer

that pays for production and accumulation of capital goods

question

What does each point on a production possibility represent?

answer

Efficiency in production The maximum potential output of two or more products

question

Points lying _______ the production possibilities curve (frontier) are unattainable with the current availability of resources and technology.

answer

outside

question

Which of the following best describes the relationship between trade-offs and opportunity costs?

answer

As you give up consumption or production of one good over another, an opportunity cost is incurred.

question

The importance of the production possibilities model is to show the different combinations of goods and services that society can produce:

answer

Given a fixed amount of resources Inefficiently Efficiently In a fully employed economy

question

Specialization is about an individual or firm using available resources to:

answer

Produce one or only a few goods and services

question

The law of increasing opportunity is driven by:

answer

resources that are not equally productive in the production of different goods or interchangeable

question

As more and more of a particular good is produced, which of the following rises?

answer

Opportunity costs

question

Trade-offs arising from limited incomes give rise to:

answer

Opportunity costs

question

Economists do not include money as a factor of production because:

answer

Money is a medium of exchange rather than an input to the production of goods and services

question

Which of the following best represents the relationship between a capital good and a consumer good or service?

answer

A commercial baking oven and loaves of bread

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question

The highest-valued 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

True or false: Economics, as a social science, is concerned with how to make money?

answer

False

question

________ is the notion that, in general, the quantity desired of economic goods (or services) exceeds the quantity available.

answer

Scarcity

question

Which of the following describes the concept of rational self-interest?

answer

question

The trade deficit between the U.S. and China grew between 2000 and 2009

answer

Example of Macroeconomics

question

Recently, Chase Bank lowered its interest rate on business loans by 2 percentage points

answer

Example of Microeconomics

question

The real GDP for the United States grew by 2.2 percent in 2007

answer

Example of Macroeconomics

question

An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise.

answer

Example of Microeconomics

question

The Consumer Price Index (CPI) rose by 3 percent in 2007

answer

Example of Macroeconomics

question

A U.S. software film laid off 15 workers last month and transferred the work to India

answer

Example of Microeconomics

question

True or false: The three main decisions that must be addressed by an economic system include what goods are to be produced, who will produce them, and where they will be produced.

answer

False

question

__________ is the discipline of economics concerned with individual units such as a person, household, firm or industry.

answer

Microeconomics

question

The branch of economics that studies the economy as a whole or in the aggregate is known as:

answer

Macroeconomics

question

The economic question of "__________ to produce" is about decisions related to the mix (quantity and type) of goods and services to make available in a given economy

answer

"what to produce"

question

Which of the following are all possible because of private property rights in a market system?

answer

Economic growth Exchange Maintenance of property Innovation Investment

question

An _______ outcome is one each individual affected is treated fairly

answer

Equitable

question

Economics assumes that human behavior reflects "_______ self-interest."

answer

"Rational self-interest"

question

answer

A cost borne by society in utilizing these resources to produce any good or service. No free lunch.

question

In economics, an incremental or gradual change is also known as a _________

answer

marginal change

question

Which of the following define positive economics

answer

Statements based on facts empirical cause and effect relationships Measurable or scientific statements about economic behavior

question

Normative Economics is

answer

based on subjective or value judgements

question

Economics is a ________ science concerned with the allocation of __________ resources to meet the unlimited wants of the members of a given society

answer

SOCIAL science concerned with the allocation of SCARCE

question

Consumers derive personal satisfaction from goods and services by

answer

Allocating their time, energy, money and other resources so as to maximize their satisfaction from consuming these goods Acting in their own self interest

question

The economic decisions of different individuals are considered to be rational when these individuals:

answer

compare benefits and costs

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

Private property rights, coupled with the freedom to negotiate binding legal _______ enables individuals and businesses to obtain, use and dispose of property resources as they see fit.

answer

contracts

question

_______ economic analysis concerns what is, whereas ___________ economic analysis represent subjective statements about what ought to be.

answer

Positive, normative

question

Which of the following describe the role of government in the United States' form of capitalism?

answer

question

When consumers purchase a good or service, they do so in order to _______ their level of utility or well being

answer

increase

question

Because consumers behave in a rationally self-interested manner, the consumer will purchase a good or service:

answer

when the marginal benefit is greater than or equal to the marginal cost

question

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

answer

Marginal analysis

question

Private property helps to facilitate exchange in which type of economic system?

answer

Free market system

question

Which of the following are economic measures are considered in macroeconomic analysis?

answer

The level of prices in the economy The unemployment rate International trade National income

question

Property rights encourage:

answer

exchange maintenance of property innovation economic growth investment

question

True or false: Positive economics encourages value judgements.

answer

False

question

Which of the following best, clarifies the "other-things-equal" assumption?

answer

All variables except those under immediate consideration are held constant for a particular analysis

question

Which of the following are issues most explored in microeconomics?

answer

Measuring the price of specific goods The expenditures of a government entity A firms decision to hire more workers Measuring total revenues of a firm or household

question

Which of the following statements or questions represent positive economics?

answer

question

When individuals take into account the costs and benefits of their economic decisions, these decisions are considered to be_________.

answer

rational

question

Which of the following statements or questions represent normative economics?

answer

question

Positive economics is concerned with _________, whereas normative economics deals with __________.

answer

What is, what should be

question

Which of the following define ceteris paribus?

answer

The idea that factors other than those being considered in a particular analysis do not change Other-things-equal assumption

question

In the type of capitalism practiced in the U.S. and most other countries, the government plays __________ role.

answer

a substantial

question

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

answer

investment

question

The factors of production include:

answer

Land Labor Capital Entrepreneurship

question

answer

Labor

question

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

answer

A trade-off

question

Factories, storage, transportation and distribution facilities, as well as tools and machinery are all examples of physical ____________ goods.

answer

capital

question

From an economic standpoint______ including all natural resources used in the production process

answer

land

question

Combinations of goods that fall on the production possible curve:

answer

are attainable utilize all of an economies resources are efficiently produced represent economic growth

question

A production possibilities curve (frontier) shows the attainable combination:

answer

of two goods that can be produced given a specific set of resources

question

Capital goods differ from consumer goods in that:

answer

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

question

Arable land, water machinery and professional baseball player are all considered scarce economic __________ to production.

answer

inputs

question

Combinations of output that fall inside the production possibilities curve represent:

answer

Less total output in an economy Goods that are attainable Inefficient use of resources

question

Select all choices from the following that would be considered land to an economist

answer

Forests Oil and mineral deposits Arable Land Sunlight Water

question

Points lying _______ the production possibilities curve (frontier) would represent a greater but unachievable level of output than that at any point on the curve

answer

outside

question

Constant opportunity cost is best represented by:

answer

The straight-line production possibilities

question

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

answer

Choices Opportunity Cost Trade-offs

question

Points_______ the production possibilities curve are attainable so long as an economy uses all of its available resources.

answer

Along

question

A nations production possibilities curve (frontier) can shift outward:

answer

As a result of specialization and trade With an increase in the quality and quantity of resources Through the use of improved production techniques

question

In economics, investment describes spending:

answer

that pays for production and accumulation of capital goods

question

What does each point on a production possibility represent?

answer

Efficiency in production The maximum potential output of two or more products

question

Points lying _______ the production possibilities curve (frontier) are unattainable with the current availability of resources and technology.

answer

outside

question

Which of the following best describes the relationship between trade-offs and opportunity costs?

answer

As you give up consumption or production of one good over another, an opportunity cost is incurred.

question

The importance of the production possibilities model is to show the different combinations of goods and services that society can produce:

answer

Given a fixed amount of resources Inefficiently Efficiently In a fully employed economy

question

Specialization is about an individual or firm using available resources to:

answer

Produce one or only a few goods and services

question

The law of increasing opportunity is driven by:

answer

resources that are not equally productive in the production of different goods or interchangeable

question

As more and more of a particular good is produced, which of the following rises?

answer

Opportunity costs

question

Trade-offs arising from limited incomes give rise to:

answer

Opportunity costs

question

Economists do not include money as a factor of production because:

answer

Money is a medium of exchange rather than an input to the production of goods and services

question

Which of the following best represents the relationship between a capital good and a consumer good or service?

answer

A commercial baking oven and loaves of bread

ECON Test #1 – Flashcards

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