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Economics
module 1
| Question | Answer |
|---|---|
| Specialization: | can lead to an increase in overall production. |
| Philosophers draw a distinction between positive statements, which describe the world as it is, and ___________________s, which describe how the world should be. | normative statement |
| Why is there scarcity? | Because our unlimited wants exceed our limited resources |
| Scarcity implies that: | it is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available. consumers |
| Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is: | the benefit to his grades from studying for an hour |
| "If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is: | $44 |
| The opportunity cost of attending university is likely to include all except which of the following? | the cost of haircuts received during the school term |
| The opportunity cost of an action: | is a subjective valuation that can be determined only by the individual who chooses the action. |
| Most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good. | marginal analysis |
| Marginal thinking is best demonstrated by: | Taking a lower paying job that is closer to home saving on travel time |
| The lesson of __________ is to forget about the money that’s irretrievably gone and instead to focus on the marginal costs and benefits of future options. | sunk costs |
| Philosophers use __________________ to describe the world as it is, which is not based on opinion | positive statements |
| Which of the following would most likely shift the production possibilities curve inward? | a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time |
| The choice on a production possibilities set that is socially preferred, will display _____________________. | allocative efficiency |
| Which looks at the economy as a whole. It focuses on broad issues such as growth of production, the number of unemployed people, the inflationary increase in prices, government deficits, and levels of exports and imports. Microeconomics and macroeconomics | macroeconomics |
| The idea behind opportunity cost is that the cost of one item is the lost opportunity to do or consume something else. In short, opportunity cost | is the value of the next best alternative |
| Consider the case of Selena, who pays $8 to see a movie, but after watching the film for 30 minutes, she knows that it is truly terrible. Should she stay and watch the rest of the movie because she paid for the ticket, or should she leave? The money she s | sunk cost |
| Just as individuals cannot have everything they want and must instead make choices, society as a whole cannot have everything it might want, either. Because society has limited resources (e.g., labor, land, capital, E.A.) at any point in time, there i | Production Possibilities |
| When a country can produce a good at a lower opportunity cost than another country, we say that this country has a ______________ in that good. | comparative advantage |
| What are taxes that governments place on imported goods for a variety of reasons | Tariffs |
| Which of the following is classified as new Capital? | Building a new factory |
| The limit to total production capacity in the economy is set by: | the quantity and quality of its productive resources |
| Opportunity costs exist because: | the decision to engage in one activity means forgoing some other activity. |
| Which of the following is a labor resource? | A computer programmer. |
| Which of the following is a capital resource? | A piece of software used by a firm. |
| Which of the following is not considered by economists to be an economic resource? | Money. |
| The greatest benefit to an economy from international trade is: | consumption beyond domestic production possibilities. |
| Joe sold gold coins for $1,000 that he bought a year ago for $1,000. He says, "At least I didn't lose any money on my financial investment." His economist friend points out that in effect he did lose money because he could have received a 3 percent return | opportunity costs. |
| A person should consume more of something when its marginal: | benefit exceeds its marginal cost. |
| Ben says that "an increase in the tax on beer will raise its price." Holly argues that "taxes should be increased on beer because college students drink too much." We can conclude that: | Holly's statement is normative, but Ben's is positive. |
| The four factors of production are: | land, labor, capital, and entrepreneurial ability. |
| Which of the following is a land resource? | Natural gas. |
| The production possibilities curve shows: | the various combinations of two goods that can be produced when society employs all of its scarce resources. |
| To society the "best" production level of a certain good is where, from society's point of view: | MB = MC |
| The advent of DVDs has virtually demolished the market for videocassettes. When people's preferences for videocassettes change it means after the change at the old production level the MB of videocassettes is now: | < MC so less production is needed |
| Which one of the following is considered brand new resources. | A student graduates from FSW as a nurse and enters the workforce |
| Which of the following is a Positive Statement | The unemployment in France is higher than in the US |
| Participating in a sport because you find the activity enjoyable is which kind of incentive | intrinsic |
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maria_decc