Macro Economy Chapter 1 Test Questions – Flashcards
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The book Wealth of Nations was written by
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Adam Smith in 1776.
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The study of microeconomic theory focuses on the
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Structure and performance of individual markets and the operation of the price system.
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Opportunity cost is
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The best alternative that must be given up in order to get something else.
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Opportunity cost may be defined as the
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Goods or services that are forgone in order to obtain something else.
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According to the law of increasing opportunity costs,
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Greater production of one good requires increasingly larger sacrifices of other goods.
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The basic factors of production include
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Land, labor, capital, and entrepreneurship.
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The Latin phrase ceteris paribus means
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Other things remain equal.
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The invisible hand refers to
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The allocation of resources by market forces.
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Which of the following is an assumption under which the production possibilities curve is drawn?
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The supply of resources is fixed.
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Factors of production are
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Scarce in every society.
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Macroeconomics focuses on the performance of
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The overall economy.
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A mixed economy
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Utilizes both market and nonmarket signals to allocate goods and services.
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A linear function can be distinguished by
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The same slope throughout the line.
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Which of the following is not a macroeconomic statement?
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Jenny's wage rate rose, and in response, she decided to work more hours.
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In a market economy, the people who receive the goods and services that are produced are those who
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Are willing to pay the highest price.
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Which of the following can be used to correct market failure?
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Laws and regulations.
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