Ch.1: Economics Foundations and Models

Macroeconomics can be used to understand all of the topics listed below, *except*:

-*How a consumer decides between the purchase of two different cars* -National unemployment trends -What causes economic booms and recessions -how the national economy works

Which of the following is *not* a possible opportunity cost of attending college?

-Wages you could have made instead of attending class and studying -Backpacking across Europe instead of attending college -Starting a business instead of attending college -*The cost housing*

Macroeconomics is concerned with all of the following *except*

-standard of living -*political party affiliation* -inflation rates -unemployment rates

In what type of economy does the government decide how economic resources will be allocated?

A centrally planned economy *North Korea is an example*

When you think of an arrangement or institution that brings buyers and sellers of a good or service together, what are you thinking of?

A market

___goods and services are those bought by businesses to be used to increase efficiency or enhance production

Capital

According to the rationality assumption, people

Do not intentionally make decisions that would leave them worse off

One of the first steps in deciding whether to complete your education is to:

Evaluate the marginal cost and marginal benefit of that decision

Which of the following is a positive economic statement?

If minimum wage rate rise, then unemployment will rise

The stock of computers, factory buildings, and machine tools used to produce goods is known as?

Physical Capital

The Principle of opportunity costs evolves from the concept of?

Scarcity

Economists believe that an individual or firm should continue any activity unitl

marginal benefit is equal to marginal cost

Economics:

is concerned with how people respond to incentives