Economics Test- Chapter 1

Microeconomics deals with:
Individual units in the economy

The study of a single firm and how it determines prices would fall under:

The primary emphasis in macroeconomics is on:
The national economy

if resources are “scarce” it means that they
cannot provide enough goods or services to satisfy human material wants and needs

the opportunity cost of something is:
what is given up to acquire it

Corner offices in high-rise office buildings usually cost more to rent than other offices. This best illustrates the economics principle of:
scarce resources

You decide to join the economics club, but this means you cant join the accounting club because it meets at the same time. This statements best represents the economic concept of:
the real cost of something is what you must give up get it.

For which of the following decisions would marginal analysis be most relevant?
should I eat another donut

To encourage young people to go to college within their home state, state universities can:
offer lower tuition to in-state students

The phrase “gains from trade” refers to the:
increase in total output that is realized when individuals specialize in particular tasks and trade with each other.

the trade- off between equity and efficiency occurs because:
allocating resources fairly may cause inefficiency.

in most cases, economic efficiency is achieved through:
incentives built into a market economy

a simplified representation that is used to study a real situation is called:
a model

The ppf illustrates that:
if all resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced.

Technological improvements will:
shift the ppf outward.

a ppf illustrates the ____ facing an economy that ____ only twos goods.
trade-offs; produces

All points inside the ppf represent:
inefficient production points

all points on the ppf represent:
efficient production points.

an economy that has the lowest cost for producing a particular good is said to have a..
comparative advantage

assume an econmy is operating on its ppf. which shows the production of military and civilan goods. if the output of military goods is increased, the output of civilian goods:
must decrease

the circular-flow diagram illustrates how firms___ goods and services and ___ factors of production

in the simplest circular- flow model, households supply ____ and demand
factors of production;goods and services