Macro TEST 1 – Flashcards
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How limited resources are allocated to satisfy unlimited wants
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Economics is primarily the study of:
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occurs if there are isufficient resources to provide for human wants
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Scarcity
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Microeconomics & Macroeconomics
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Economics can be divided into two main branches of study
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Macroeconomics
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the branch of economics that studies the aggregate decisions of all households and all firms is called
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an increase in the price of lumber used to construct houses
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Which of the following is most likely a topic of discussion in a microeconomics course
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Microeconomics is concerned with the trees (IND MARKETS) while macro is ocnerned with the forest (AGGREGATE MARKETS)
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The basic difference between macroeconomics and microeconomics is that:
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the production decisions of individual firms
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Macroeconomic topics do not generally include:
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microeconomics
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the branch of economics that studies the decisions mademby individual firms and consumers is called :
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can be tested using empirical analysis
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an economic hypothesis
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is an abstraction from reality
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an economic theory
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a hypothesis is a testable proposition. when a hypothesis is supported by empirical analysis, it is tentatively accepted as a theory
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what is the difference between a theory and a hypothesis
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scarcity
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economic choices or tradeoffs are the result of:
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Legal institutions
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which of the following is not a factor of production?
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Labor
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Raylene works at an accounting firm. She is considered what type of resource?
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Factors of production
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Economic resources are also known as:
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Money is not directly used to produce goods and services
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Money is not considered to be an economic resource because:
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friendship
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An example of an intangible good is:
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the benefit to his grades from studying for an hour
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trent decides to spend an hour playing basketball rather than studying. His opportunity cost is:
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individulas to make the best use of resources by devoting themselves to one primary
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Specialization is a way for:
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has the highest opportunity cost
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If a country wanted to maximize the value of its output, each job should be carried out by the person who
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More wood is being used in the construction of new homes
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Lumber prices fall in Providence, Rhode Island, because new forests are opened for harvesting in nearyby Maine. as a result, in the providence housing industry, you might expect to find that:
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how can scarcity be eliminated?
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which of the following is not a question that scarcity forces all societies to answer?
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use more capital rather than labor in the production process
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countries with high labor costs tend to:
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Business buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.
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which of the follwoing best characterizes the circular flow of income
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all can be traded : LAND CAPITAL LABOR ENTREPRENEURSHIP
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Which of the following is not a resource exhcnged in the factor markets
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ANY OCCUR: the production possibilities curve shifts outward, the production possibilites curve shifts ioutward or moves on the curve
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consider a production possibilities curve for an economy producing bicycles and video game player. it is possible to increase the production of bicycles without sacrificing video game players if:
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ALL OF ABOVE:physical resources of that society, the skills of the workforce, the level of technology of society, the number of factories availble to society
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What determines the position and shape of a society's production possibilities curve?
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A decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time.
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Which of the foloowing would most likely shift the production possibilieis cuve inward?
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PRICE
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Which of the following is NOT illustrated by a production possibility curve?
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ALLOFABOVE: households are suppliers of resources, firms are suppliers of final products, households are demanders of final products, firms are demanders of resources
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In a simple cicular flow model
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inverse relationship between the price of a good and the quantitiy demanded.
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The law of demand refers to the:
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substitution effect
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When the price of a good falls relative to other goods and the consumer consequently buys more of this good, it is called the:
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The inverse relationship between price and quantity demanded;as price increases, the quantity demanded decreases.
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A downward-sloping demand curve shows:
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decrease in the quantiyt of milk demanded
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If the demand for milk is downward sloping, then an increase in the price of milk result in an
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complements
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whenever the price of a Good A decreases, the demand for Good B increases. Good A and B appear to be:
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The supply curve for A to the right.
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A technological improvement that lowers production costs for Good A will shift:
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Lobster
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Which of the following is most likely to be an inferior good?
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NO, but if there is no outside interference, they tend to move toward equilibrium
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ARe markets always in equilibrium?
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A &B everyone with the desiere and the income to buy gasoline at that price can do so, SURPLUSES ARE INEVITABLE
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at the equilibrium price for gasoline
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The market price is either above or below the equilibrium price
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The quantity of a good bought and sold in a market will be below the equilibrium quantity if:
