question

comparing the total benefits and costs

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Decision making "at the margin" means making a choice based on __________ of a decision.

question

Competition is an effect of scarcity.

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How is scarcity related to competition?

question

The increase in the nation's money supply helped push the nation's unemployment rate down in the short run

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Which of the following is a positive macroeconomics statement?

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normative economics.

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In an interview an economist states, "This problem should be of greater concern to the federal government." We can explicitly put this statement in the category of

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scarcity exists.

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condition in an economy that makes a "rationing device" a necessity is the fact that

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choice

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headline in the newspaper reads "County Supervisors Debate Building New Schools." The headline relates closest to which economic concept?

question

what should be.

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In all cases, normative economics deals with

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NOT: a person with low opportunity cost of time a person with high opportunity cost of time a person who is out of work There is not enough information to answer the question.

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It usually takes less time to buy a six-pack of 7-Up, a loaf of bread, and a half-gallon of ice cream at a small convenience store (such as a 7-Eleven) than at a large, full-service grocery store. Which of the following persons is most likely to buy these items at a convenience store?

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utility; disutility

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good provides __________ and a bad provides __________.

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Because scarcity exists.

answer

Why do societies need rationing devices?

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ceteris paribus.

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condition often used in economics to isolate the relationship between two variables is

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competition.

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In every economy people vie for the economy's rationing device, a process called

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capital.

answer

Produced goods used as inputs for the production of other goods comprise the resource known as

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

answer

What does it mean if a person makes a "decision at the margin"?

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Consumers bought fewer cars when the relative price of cars increased.

answer

Which of the following is a positive economic statement?

question

b and c

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How are changes in opportunity cost predicted to affect behavior?

question

positive economics.

answer

The absence of value judgments is the essence of

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equal the marginal cost of the activity.

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At the optimal level of an activity, the activity's marginal benefit must

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If you exercise regularly, you will be healthier, ceteris paribus.

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Which statement uses the term ceteris paribus correctly?

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macroeconomics.

answer

The study of an economy's price level is explicitly a part of

question

as the price of oranges rises, individuals' preferences do not change, nor does anything else, but individuals buy fewer oranges in response to the higher price of oranges.

answer

If an economist says "the higher the price of oranges, the fewer oranges individuals will buy, ceteris paribus," this means that

question

choice.

answer

In economics, scarcity implies

question

NOT: maximizing net benefits. equating marginal benefits and marginal costs. maximizing total benefits. minimizing total costs. a and b

answer

Efficiency is consistent with

question

positive

answer

Attempts to determine "what is" are part of __________ economics.

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People leave their medicine containers open more often, which ends up making it easier for children to get into the medicine.

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Which of the following is an unintended effect of placing safety caps on medicines?

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opportunity cost.

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Choice implies

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the best forfeited alternative.

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Opportunity cost is the value of

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the desirability of a minimum wage increase

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Which of the following issues is most unlikely to be addressed by an economist practicing positive economics?

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NOT: consists of the tuition costs plus the costs of room and board and other expenses. consists of the tuition costs only. is zero, if the student receives a scholarship that covers the costs of tuition, room and board, and other expenses. varies from person to person. both b and c

answer

The opportunity cost of attending college

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NOT: a and c the study of how prices are determined in the computer industry the study of unemployment in the economy the study of how changes in the nation's money supply affect the nation's output b and c

answer

Which of the following is a microeconomics topic?

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NOT: The increase in the nation's money supply helped push the nation's unemployment rate down in the short run. The central bank should increase the nation's money supply. Ford Motor Company's new advertising campaign ended up hurting General Motors's sales. The local government ought to spend more on recreational activities.

answer

Which of the following is a positive microeconomics statement?

question

isolate the relationship between two variables.

answer

The purpose of the ceteris paribus condition is to allow economists to

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entrepreneur

answer

Some years ago, chemists at 3M Corporation were trying to create a super-strong glue. Somehow they got their molecules twisted and came up with one of the weakest glues ever made. But, rather than pouring it down the drain, they tried coating some paper with it, and the "Post-It Note" was born. In this case, 3M was acting as a(n)

question

circular flow diagram

answer

Economic models like the _____________________ are not physical models, but instead are diagrams or graphs or even mathematical equations that represent economic patterns or theories.

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microeconomics.

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The branch of economics that studies the decisions of individuals and firms is called

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wants are greater than the limited resources available to satisfy these wants.

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Scarcity means

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labor market

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In the ____________, households work and receive payment from firms.

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the reasons for a decline in the price of crude oil

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Which of the following would NOT be considered a macroeconomic topic?

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An increase in labor costs will increase the additional cost of producing another bus.

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Which of the following statements most likely lies within the realm of microeconomics?

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NOT: China and Vietnam Cuba and North Korea South Africa and Kenya Germany and France

answer

In countries like _____________ the command economy predominates.

question

unemployed people

answer

If macroeconomics looks at the economy as a whole, it focuses on which of the following?

question

built on the major factors or variables that the theorist believes explain some event. a simplified abstract representation of the real world. used to understand the real world. a and b ANSWER: a, b, and c

answer

A theory is

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environmental pollution

answer

Which of the following is generally accepted as a valid criticism of the production of useful goods and services?

question

division of labor

answer

In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________, which means the way in which the work required to produce a good or service is divided into a number of tasks that are performed by different workers.

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goods and services market

answer

In the ______________, households receive goods and services and pay firms for them.

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human behavior and choices as they relate to relatively small units --- an individual, a firm, an industry.

answer

Microeconomics is the branch of economics that deals with

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aggregates or the entire economy.

answer

In all cases, macroeconomics deals with

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government

answer

In a command economy, the __________ either makes most economic decisions itself or at least strongly influences how the decisions are made.

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labor.

answer

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

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Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.

answer

Which of the following best characterizes the circular flow of income?

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omits certain factors when trying to explain something.

answer

A theory is an abstract representation of reality. This means a theory

question

macroeconomics.

answer

The question of how a tax change might impact U.S. economic output is most closely associated with the study of

question

a study of how tax cuts stimulate aggregate production

answer

Which of the following lies primarily within the realm of macroeconomics?

question

low inflation

answer

When nations desire a healthy macroeconomic, they typically focus on three goals, one of these being:

question

a command economy

answer

Which of the following best denotes the reason for the existence of substantial black markets?

question

relatively small units in the economy.

answer

In all cases, microeconomics deals with

question

economy

answer

Regardless of whether you are looking through the microeconomics microscope or the macroeconomics telescope, the fundamental subject material of the interconnected __________ doesn't change.

question

microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets).

answer

The basic difference between macroeconomics and microeconomics is that:

question

An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded. Due to process innovations in computer chip manufacturing, the market supply of computers increased. Due to an economic recession, manufacturing firms began implementing layoffs of their workforces. NOT: Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook.

answer

Which of the following statements most likely lies within the realm of macroeconomics?

question

scarcity exists.

answer

The reason people can't have everything they want is because

question

a decrease in the unemployment rate

answer

Which of the following is most likely a topic of discussion in macroeconomics?

question

broad issues such as national output, employment and inflation.

answer

Macroeconomics primarily examines:

question

can lead to an increase in overall production.

answer

Specialization:

question

interest rates

answer

Which of the following best describes a monetary policy tool?

question

government spending

answer

Which of the following best describes a fiscal policy tool?

question

the profit maximizing decisions of an individual manufacturer.

answer

Macroeconomic topics do not usually include:

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a decrease; lower

answer

All sellers may be tempted to raise the price of what they sell, but an unintended effect of raising the price could be __________ in units sold large enough to __________ their total revenue earned.

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