Microeconomics Chapter 1 Questions – Flashcards
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For economists, the word "utility" means:
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-pleasure or satisfaction
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Economics may best be defined as the:
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-social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity
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You should decide to go to a movie:
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-if the marginal benefit of the movie exceeds the marginal cost
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Opportunity costs exists because:
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-the decision to engage in one activity means forgoing some other activity
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The scientific method is:
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-used by economists and other social scientists, as well as by physical scientists and life scientists, to formulate and test hypotheses
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The Latin term "ceteris paribus" means:
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-other things equal
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Macroeconomics approaches the study of economics from the viewpoint of:
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-the entire economy
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Microeconomics is concerned with:
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-a detailed examination of specific economic units that make up the economic system
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A normative statement is one that:
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-is based on value judgments
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A positive statement is one that is:
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-objective and is based on facts
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"Economics is concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity." This statement is:
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-positive and correct
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The economizing problem is:
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-the need to make choices because economic wants exceed economic means
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The four factors of production are:
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-land, labor, capital, and entrepreneurial ability
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Money is not an economic resource because:
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-money, as such, does not produce anything
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The production possibilities curve illustrates the basic principle that:
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-if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced
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Unemployment:
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-is illustrated by a point inside the production possibilities curve
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Any point inside the production possibilities curve indicates:
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-that more output could be produced with the available resources
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The law of increasing opportunity costs states that:
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-if society wants to produce more of a particular good, it must sacrifice larger and larger amounts of another good to do so
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The concept of opportunity cost:
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-suggests that the use of resources in any particular line of production means that alternative outputs must be forgone
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The point on the production possibilities curve that is most desirable can be found by:
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-comparing marginal benefits and marginal costs
