Macroeconomics – Chapter 1 – Flashcards
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What does it mean if a person makes a "decision at the margin"
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The person compares additional benefits and additional costs when deciding what to do
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Theory is
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built on a major factors or variables that the theorist believes explains some event simplified abstract representation of the real world used to understand the real world
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If variable X goes up as result of variable Y going down, then X and Y are
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inversely related
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the opportunity cost of attending college is
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the highest valued alternative one forfeits to attend college
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which of the following is an example of a positive economic statement
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if you drop a ball from the top of a building, it will fall to the ground
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which of the following is not one of the four broad categories of resources
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government
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the author of the textbook defines economics as the
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science of scarcity
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which of the following is a microeconomics topic
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the study of how prices are determined in the computer industry
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many people buy one newspaper per day, but rarely do they buy two of the same newspapers on the same day. What is the economic justification for this behavior
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the marginal cost of purchasing the second paper exceeds the marginal benefit of purchasing that paper
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something that provides utility is called a
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good
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scarcity means
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wants are greater that the limited resources available to satisfy these wants
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the physical and mental talents people bring to production processes comprise the resource called
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labor
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minerals, animals, water, and forests are all considered to be part of the resource category known as
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land
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opportunity cost is the value of
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the best (or most highly valued) forfeited item
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which of the following is a normative macroeconomics statement
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the central bank should increase the nations money supply
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ceteris paribus
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all other thinks held constant or nothing else changes
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in all cases positive economics deals with
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what is
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according to economists competition exists because of
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scarcity
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which of the following is not one of the four broad categories of resource
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money
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produced goods used as inputs for the production of other goods compromise the resources known as
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capital
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economists believe the people's wants are
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infinite
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amy's opportunity cost of going to the movies are
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the price of the ticket plus the value to amy of what she would have chosen to do with her time had she not chosen to go to the movies
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saying "the marginal cost are greater than the marginal benefits" is the same as saying
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the additional costs are greater that the additional benefits
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to an economists, utility means
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satisfaction
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good
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anything from which individuals receive utility of satisfaction
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bad
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anything from which individuals receive disutility of dissatisfaction
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disutility
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the dissatisfaction one receives from a bad
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entrepreneurship
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the talent that some people have for organizing the resources of land, labor, and capital to produce goods, seek new business, and develop ways of doing things
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rationing device
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a means of deciding who gets what of available resources and goods
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marginal benefits
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additional benefits to consuming one more unit of a good or activity
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marginal cost
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additional cost to consuming one more unit of a good or opportunity
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efficiency
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when marginal benefits equal marginal cost
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incentive
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something that encourages or motivates a person to perform an action
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exchange
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giving up of one thing for something else
