Macro test 1 prep – Flashcards
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An economy's standard of living depends largely on its ___.
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productivity
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____ is the study of how individuals and firms make decisions and how they interact in markets. This is more likely to create models that analyze the decisions of firms
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microeconomics
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____ is the study of matters affecting the entire economy. Therefore it is more likely to create models that analyze the policy decisions of governments and central banks, as well as how these decisions affect growth, inflation, and unemployment.
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macroeconomics
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____ is one that seeks to describe the world as it is. Ex: "If taxes were lowered, government revenues would actually increase".
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positive statement
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____ is one that offers an opinion as to the way the world should be. Ex: "Taxes are too high".
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normative statement
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___ statement can generally be supported or refuted by data.
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positive statement
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___ statement require a larger philosophical framework to evaluate.
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normative statement
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"Lung caners kills millions of people each year" is an example of a ___ statement
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positive statement
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"Too many people smoke" is an example of a ___ statement
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normative statement
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"If the government were to increase taxes on cigarettes, fewer people would smoke" is an example of a ___ statement
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positive statement
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"The government should increase taxes on cigarettes" is an example of a ___ statement
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normative statement
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___ is social science that studies how individuals, institutions and society make optimal choices under conditions of society
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Economics
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___ is limited nature of resources
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Scarcity
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Scarcity requires that ___ be made
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choices
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____: rational self-interest entails making decisions to achieve maximum utility
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Purposeful behavior
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____ is the pleasure or satisfaction obtained from consuming a good
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utility
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different preferences and circumstances lead to different ___.
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choices
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____- interest is not the same as selfishness
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rational self
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giving to charity could be action in a rational self interest because it can increase ones happiness, doesn't make them selfish. this is an example of ____
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rational self interest
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Land- or natural resources is a ___
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factor of production
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labor-or human resources- how skilled the workforce is. this is a ____
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factor of production
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Capitol- investment goods, manufacturing equipment, tool, transportation, machinery. is a _____.
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factor of production
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___ is a tool to illustrate society's economic problem
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production possibilities frontier
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PPF is ___
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production possibilities frontier
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economy is employing all available resources (full employment) is a/an ___
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assumtion
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____ focuses on tech and resources
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Macro
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___ focuses on the individual
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Micro
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PPF things on graph are (dependent/independent) of each other
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dependent
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"Ceterus Perabus" means what?
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"with other things the same" or " all other things being equal or held constant "
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Change in consumer preference, change in consumer income, or change in price of substitute can all do what. (assuming price is constant on demand curve)
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shift the demand curve
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statement is one that seeks to describe the world as it is
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positive statement
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statement is one that offers an opinion as to the way the world should be
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normative statement
