Macroeconomics Chapter One – Flashcards

Economics can be describes as the study of: A) increasing the level of productive resources so there is maximum output in society B) increasing the level of productive resources so there is a minimum level of income. C) how people, institutions, and society make choices under conditions of scarcity D) the efficient use of scarce resources paid for at the minimum level of cost to consumers and businesses.

The satisfaction or pleasure one gets from consuming a good or service is described by the term: A) price B) utility C) consumption D) preferences

The ceteris paribus assumption states that: A) what is true for the part is true for the whole B) as price decreases, quantity demanded will increase C) whatever goes up must come down D) all other things will remain constant or equal

Macroeconomics is the study of the economics from the standpoint of: A) individual economic units B) a typical business firm C) a typical household D) the aggregate or overall economy

The production possibilities concept illustrates the basic principle that: A) the production of one good will in time require smaller and smaller sacrifices of other goods. B) an economy will automatically seek the level of output at which all of its resources are employed. C) if all of the resources of an economy are in use, more of one product can be produced only if less of another product is produced. D) an economy will always operate at some point on its production possibilities curve.

returning of purchases

extra or additional

pay attention to different prices

The higher the price goes up, the quantity lowers

Post hoc ergo propter hoc

What's good for one is good for all

Natural resources used to produce goods and services

work/ effort

Man-made resources used to produce goods and services

__________ combines the other resources to produce a product, make strategic decisions, and bear risks.

Basic Economic Activites: 1. 2. 3.

Four Factors of Production