Economy – Flashcard
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What do economists mean when they state that a good is scarce?
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The amount of the good that people would like exceeds the supply freely available from nature
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Economic choice and competqtive behavior are the result of
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Scarcity
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Jacob and mason go to a diner that sells burritos for $5 and tacos for $3. They agree to split the lunch bill evenly. Mason chooses a taco. The marginal cost to jacob of ordering a burrito instead of a taco is
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$1
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The expression "theres no such thing as a free lunch" implies that
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Opportunity costs are incurred when resources are used to produce goods and services
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Which one of the following states a central element of the economic way of thinking?
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Incentives matter-human choice is influenced in predictable ways by changes in personal costs and benifits.
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Which of the following is mostly clearly consistant with the basic postulate of economics regarding the reaction of people to a change in incentives
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People will but less gas if the price of gas increases by $.20 per gallon
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Which one of the following is a positive economic statement?
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An increase in the minimum wage will reduce employment
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The basic difference between macroeconomics and microeconomics is that
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Macroeconomics is concerned with the forests(aggregate markets), while microeconomics is concerned with the indevidual trees( subcomponents)
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Economic analysis assumes that
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Changes in the personal benefits and costs associated with a choice will exert a predictable influence on human bahavior
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While waiting in line to buy two tacos at 75 cents each, and a medium drink for 80 cents, emma notices that the resturant has a value meal three tacos and a medium drink all for $2.50. For emma, the marginal cost of purchasing the third taco would be
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20 cents
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Or the typical student, taking an introductory course in economics should
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Help the students learn rationally analyze social problems
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Economics is primarily the study of
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The allocation of scarce resources in an effort to satisfy wants that are virtually unlimited.
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Ex-London School of Economics students Mick Jagger, " You cant always get what you want, but if you try sometimes, you just might find you can get what you need." Another statement of the basic economic principal expressed in this lyric is that
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You can allocate your respurces to what gives you the highest value.
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Capital is a term economics use to refer to
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Man-made resources used to produce other goods and services
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When price is the rationing criterion, individuals have a strong incentives to
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Provide services to others in exchange for income.
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The highest valued alternative that must be given up in order to choose an option is called
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Opportunity cost.
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The benifit ( or satisfaction) that an individual expects to derive from an activity is called
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Utility
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When economicsts say an individual has made a rational choice, they mean the individual has
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Made the choice by weighing their own subjective costs and benefits
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When deciding whether to buy a second car, the economic way of thinking indecates that the purchhaser shoukd compare
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The additional benifits of the second car with the additional cost of the second car
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The secretory of labor states that wage rates in the country have risen by 2% this past year. The head of a local labor union states that wage gains should have been higher. The secretarys statement is a(n) _______ economic statement, and the labor heads statement is a(n) _______ economic statement.
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Positive; normative
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Which of the following sayings best reflects the concept of opportunity cost?
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"Time is money"
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If an economy is operating at a point inside the production possibilities curve
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Its resources are not being used efficently
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The primary benefit that results when a nation employs its resources in accordance with the principal of comparative advantage is
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A larger output resulting from a more efficient use of resources
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Suppose the price of an airline ticket cost $600. Ticket cost $150. Traveling by plane takes six hours compared with 51 hours by bus. Other things constant an individual big gain by choosing near travel it and only in his time were valued at more than
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$10 per hour
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With voluntary exchange
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Both the buyer and seller will be made off better
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" Now that terrance paints the broad surfaces and i do the trim work, we canpaint a house in three-fourths the time it took for each of us to do both." This statement most clearly reflects
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The law of competative advantage
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Which of the following will mostly likely occur under a system of clearly defined and enforced private property rights?
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Resource owners will gain by discovering and employing their resources in ways that are highly valued by others
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Three basic decisiins must be made by all economies. What are they?
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What will be produced, how goods will be produced, and for whom goods will be produced.
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If a firm or a nation desires to maximize its outputs, each productive assignment shoukd be carried out by those persons who
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Have a comp
