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individual decision makers in the economy

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Microeconomics deals with:

question

we do not have sufficient resources to produce all the goods and services.

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scarcity in economics means:

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the study of microeconomics.

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How people make decisions is:

question

the value of the best alternative forgone in making any decision.

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Opportunity cost is:

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what you gave up to get it

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For economists, the value of something is:

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refers to decisions about whether to do a bit more or a bit less of an activity, helps when making a "how much" choice, and involves trade-offs.

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marginal analysis:

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offer lower tuition to in-state students.

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To encourage young people to go to college within that home state, state universities

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the exchange of goods and services in markets

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specialization and trade usually lead to:

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individuals, states, and countries.

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gains from trade exist for:

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scarcity

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we are forced to make choices because of:

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The Wealth of nations, By Adam Smith

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which book illustrates the advantages of specialization using an eighteenth-century pin factory?

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a decrease in total economic output.

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specialization and trade should lead to all of the following except:

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a model

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A simplified representation that is used to study a real situation is called:

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trade offs; produces

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a production possibility frontier illustrates the ___ facing an economy that ___ only two goods

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an increase in the unemployment rate

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the production possibility frontier will shift outward for all of the following reasons except:

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operating on its production possibility frontier

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efficient production exists when the economy is:

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can produce less of all goods than another economy

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an economy is said to have comparative advantage if it:

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relative opportunity costs

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the concept of comparative advantage is based upon:

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bartering

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if leroyce trades two cookies for one of amis brownies, we say that they are engaging in

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Normative

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the current rate of unemployment of 9% is too high. this is a ___ statement.

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production possibility frontier

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The ___ illustrates the trade offs facing an economy that produces only two goods.

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Shift the production possibility frontier outward.

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Technological improvements will:

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has the lower opportunity cost for a producing a particular good than another country.

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an economy is said to have a comparative advantage in the production of one good if it:

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barter

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trade takes the form of ____ when people directly exchange goods that they have for goods that they want.

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Bureau of Labor statistics.

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which of the following offices of the U.S. government is a major employer of economists?

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often useful in forming economic policy

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Economic models are:

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increasing opportunity cost

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the fact that a society's production possibility frontier is bowed out or concave to the origin of a graph demonstrates the law of:

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efficient production points.

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all points on the PPF are:

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buy; sell

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The circular flow diagram illustrates how firms ___ goods and services and ___ factors of production.

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the federal government pays for 46% of U.S. health care costs.

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which of the following is an example of a positive statement?

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usually make simplified assumptions.

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the models that the economists construct:

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inefficient production points.

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all points inside the PPF represent

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economic growth

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the process observed when an economy's PPF is shifted outward is:

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comparative advantage

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the economy that has the lower opportunity cost for producing a particular good than another economy is said to have

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money flows from households to firm as households offer factors of production for sale.

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which is the following is false about the circular flow diagram?

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consumers will buy more at lower prices.

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The law of demand implies that:

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when income increases, the demand increases.

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a good is normal if which of the following is true?

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an increase in the price of input that are used in production.

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a decrease in supply is caused by:

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as the price increases, the quantity demanded will decrease.

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the law of demand states that other things equal:

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an increase in the demand.

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Pizza is a normal good. If students incomes at your college increase, the effect on pizza would be:

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quantity supplied to increase.

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If the price of a good increases, you would expect the:

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the price is above the equilibrium price.

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Excess supply occurs when:

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quantity demanded exceeds the quantity supplied

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rent controls usually set a price ceiling below the equilibrium price and therefore:

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all of the answers are correct.

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which of the following is a source of inefficiency from a rent-control price ceiling:

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a price floor (price support).

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a minimum price that the government guarantees farmers will receive for a particular crop is:

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quantity control

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the system of taxicab medallions in NYC is an ex of a

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a difference between the demand price and the supply price at the quota limit.

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the quota rent refers to:

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price control

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a price floor or a price ceiling is an example of:

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keep prices low

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a binding price ceiling is designed to:

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it is set above the equilibrium price

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a price ceiling will have no effect if:

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a maximum price sellers are allowed to charge for a good or service.

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a price ceiling is:

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widespread evasion of the minimum wage law in the black market for labor.

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In Europe the minimum wage has led to:

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the quota rent and the wedge that represents the difference between the demand price and the supply price.

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when the government imposes a limit on a sale of a good or service by a quota, it usually issues a license that gives the owner the right to sell a given quantity of the good. the market price of the license is equal to:

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shortage, surplus.

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a price ceiling will create a persistent ___ and a price floor will create a persistent _____.

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all of the answers are correct

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rent control in NYC cause which of the following

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a price ceiling has been set and a shortage of rental units may occur.

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if the government sets out to help low-income people by establishing a rent control:

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the u.s government in some cases has destroyed the surplus production.

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The united states and the European union impose price floors on many agricultural products. These price floors lead to unwanted surpluses. To deal with surplus:

question

increases the price paid by consumers.

answer

setting a price floor in the market for wheat usually:

micro economics chapter 1,2,3,5 – Flashcards

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