Macroeconomics – Chapter 1

question

What does it mean if a person makes a “decision at the margin”
answer

The person compares additional benefits and additional costs when deciding what to do
question

Theory is
answer

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
question

If variable X goes up as result of variable Y going down, then X and Y are
answer

inversely related
question

the opportunity cost of attending college is
answer

the highest valued alternative one forfeits to attend college
question

which of the following is an example of a positive economic statement
answer

if you drop a ball from the top of a building, it will fall to the ground
question

which of the following is not one of the four broad categories of resources
answer

government
question

the author of the textbook defines economics as the
answer

science of scarcity
question

which of the following is a microeconomics topic
answer

the study of how prices are determined in the computer industry
question

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
answer

the marginal cost of purchasing the second paper exceeds the marginal benefit of purchasing that paper
question

something that provides utility is called a
answer

good
question

scarcity means
answer

wants are greater that the limited resources available to satisfy these wants
question

the physical and mental talents people bring to production processes comprise the resource called
answer

labor
question

minerals, animals, water, and forests are all considered to be part of the resource category known as
answer

land
question

opportunity cost is the value of
answer

the best (or most highly valued) forfeited item
question

which of the following is a normative macroeconomics statement
answer

the central bank should increase the nations money supply
question

ceteris paribus
answer

all other thinks held constant or nothing else changes
question

in all cases positive economics deals with
answer

what is
question

according to economists competition exists because of
answer

scarcity
question

which of the following is not one of the four broad categories of resource
answer

money
question

produced goods used as inputs for the production of other goods compromise the resources known as
answer

capital
question

economists believe the people’s wants are
answer

infinite
question

amy’s opportunity cost of going to the movies are
answer

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
question

saying “the marginal cost are greater than the marginal benefits” is the same as saying
answer

the additional costs are greater that the additional benefits
question

to an economists, utility means
answer

satisfaction
question

good
answer

anything from which individuals receive utility of satisfaction
question

bad
answer

anything from which individuals receive disutility of dissatisfaction
question

disutility
answer

the dissatisfaction one receives from a bad
question

entrepreneurship
answer

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
question

rationing device
answer

a means of deciding who gets what of available resources and goods
question

marginal benefits
answer

additional benefits to consuming one more unit of a good or activity
question

marginal cost
answer

additional cost to consuming one more unit of a good or opportunity
question

efficiency
answer

when marginal benefits equal marginal cost
question

incentive
answer

something that encourages or motivates a person to perform an action
question

exchange
answer

giving up of one thing for something else

Get instant access to
all materials

Become a Member