HW Chapter 1 – Flashcards
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They are all available information as they take actions intended to achieve their goals
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Economists assume that people are rational in the sense that
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Unlimited wants exceed the limited resources available
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Which of the following describes scarcity?
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Every choice involves an opportunity cost
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Scarcity is central to the study of economics because it implies that
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Marginal benefit equals marginal cost
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Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when
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When we assume the managers at Microsoft have used all available information and have weighted all known benefits and costs, we are assuming rationality
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Microsoft charges a price of $599 for a copy of Windows 7. Is this pricing decision rational?
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Scarcity
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One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls
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Normative Analysis
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What type of economic analysis is concerned with the way things ought to be?
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Positive analysis
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A 50-cent-per-pack tax on cigarettes will reduce smoking by teenagers by 12 percent. This represents
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Normative analysis
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The federal government should spend more on AIDS research. This represents
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Positive analysis
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Rising paper prices will increase textbook prices. This represents
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Normative analysis
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The price of coffee at Starbucks is too high. This represents
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Positive analysis Normative analysis Positive analysis
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______ is concerned with what is, and _____ is concerned with what ought to be. Economists is about _____, which measures the costs and benefits of different courses of action.
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(value in the second period - value in the first period / value in the first period) x 100
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Percentage change
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1/2 x base x height
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Area of triangle
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(y2 - y1)/(x2 - x1)
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Slope formula
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Price x Quantity
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Total revenue
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77.3 Yes
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In your economics class, you scored a 67 on the first quiz, a 86 on the second quiz, and a 79 on the third quiz. Your average quiz is _____. On the fourth quiz, you scored an 82. Did the fourth quiz raise your average?
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Microeconomics examines individual markets while macroeconomics examines the economy as a whole.
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A primary difference between macroeconomics and microeconomics is
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Microeconomic
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The effect of higher cigarette taxes on the quantity of cigarettes sold. This is a _____ issue
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Macroeconomic
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The effect of higher income taxes on the total amount of consumer spending. This is a _____ issue.
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Macroeconomic
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The reasons for the economics of East Asian countries growing faster than the economies of sub-Saharan African countries. This is a _____ issue.
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Microeconomic
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The reasons for low rates of profit in the airline industry. This is a _____ issue.
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Microeconomics
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Which of the following areas of economics studies issues such as ways to reduce teenage smoking?
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Macroeconomics
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Which of the following areas of economics studies issues such as whether government intervention is capable of reducing the severity of recessions?
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The study of the company as a whole, including topics such as inflation, unemployment, and economic growth
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Macroeconomics is
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how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices
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Microeconomics is the study of
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Macroeconomics
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Which of the following covers the study of topics such as inflation or unemployment?
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Unemployment
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Macroeconomics is most likely to include the study of
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Nonlinear Linear
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In the diagram to the right, the curve "S" is apparently _____, while the curve labeled "D" is apparently _____.
