Chapter one Econ

Which of the following questions is a topic that would be studied by microeconomics? A) How will a lower price of digital cameras affect the quantity of cameras sold? B) Why did production and the number of jobs shrink in 2009? C) Will the current budget deficit affect the well-being of the next generation? D) What is the current unemployment rate in the United States?

A.) How will a lower price of digital cameras affect the quantity of cameras sold?

Which of the following statements is CORRECT? A) The United States produces more agricultural goods than manufactured goods. B) The United States produces more services than goods. C) The United States produces more goods than services. D) The United States produces an equal amount of goods and services.

B) The United States produces more services than goods.

Which of the following questions is a macroeconomic issue? A) What effect would a cure for Mad Cow Disease have on the market for beef? B) What is the future growth prospect for an economy? C) How many workers should the owner of a business hire? D) How many more pounds of cookies will a consumer purchase if the price of cookies decreases?

B) What is the future growth prospect for an economy?

The income earned by the people who sell the services of the factor of production ________ is called ________.

B) entrepreneurship; profit

An example of a question that might be explored in microeconomics is to determine A) savings by the household sector. B) the total employment within the U.S. economy. C) the number of workers employed by Intel. D) why the U.S. economy has grown more rapidly than the Japanese economy.

C) the number of workers employed by Intel.

Which of the following is an example of a microeconomic decision? 12) ______ A) a small shoe factory deciding how much leather to purchase for the next quarter's production need B) a multinational company deciding where to relocate its world headquarter C) an individual deciding how to allocate the time he or she has for work and leisure D) All of the above answers are correct.

D) All of the above answers are correct.

Macroeconomic topics include A) studying what factors influence the price and quantity of automobiles. B) studying the determination of wages and production costs in the software industry. C) the impact of government regulation of markets. D) total, nationwide employment.

D) total, nationwide employment.

When China builds a dam using few machines and a great deal of labor, it is answering the ________ part of one of the two big economic questions.

How

An inducement to take a particular action is called

an incentive

Macroeconomics is concerned with

economy-wide variables.

The fact that people with higher incomes get to consume more goods and services addresses the ________ part of one of the two big economic questions.

for whom

An art museum decides to offer tours by having visitors listen to cassette tapes rather than have tour guides. The museum is answering the ________ part of one of the two big economic questions.

how

In part, microeconomics is concerned with A) the Federal Reserve's policy decisions. B) how a business firm decides upon the amount it produces and the price it sets. C) changes in the economy's total output of goods and services over long periods of time. D) factors that explain changes in the unemployment rate over time.

how a business firm decides upon the amount it produces and the price it sets.

All economic questions are about

how to cope with scarcity

Joy is training to become a chef. The skills she is obtaining from her training and education will increase Joy's

human capital

When an economist talks of scarcity, the economist is referring to the

inability of society to satisfy all human wants because of limited resources.

Copper falls into which factor of production category

land

The "gifts of nature" are included as part of which factor of production?

land

Factors of production include

land, labor, capital and entrepreneurship.

Macroeconomics differs from microeconomics in that

macroeconomics focuses on the national economy and the global economy.

Economics is best defined as the study of how people, businesses, governments, and societies

make choices to cope with scarcity.

Economics is best defined as

making choices with unlimited wants but facing a scarcity of resources.

The study of the choices made by individuals is part of the definition of

microeconomics.

Scarcity is a situation in which

people cannot satisfy all their wants.

The term human capital refers to

people's knowledge and skill.

All economic questions arise because we

want more than we can get.

U.S. producers decide to produce more compact cars and fewer SUVs as the price of gasoline rises. Producers are answering the ________ part of one of the two big economic questions.

what

When an economy produces more houses and fewer typewriters, it is answering the ________ part of one of the two big economic questions

what

Which of the following is NOT a factor of production? A) 175 shares of Microsoft stock B) vans used by a bakery company for deliveries C) a person developing a production schedule for a new product D) wilderness areas that have yet to be developed

A) 175 shares of Microsoft stock

Which of the following is NOT a factor of production? A) the wages paid to workers B) the water used to cool a nuclear power plant C) the effort of farmers raising cattle D) the management skill of a small business owner

A) the wages paid to workers

18) In broad terms the difference between microeconomics and macroeconomics is that 18) ______ A) microeconomics studies the effects of government taxes on the national unemployment rate. B) microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy. C) macroeconomics studies the effects of government regulation and taxes on the price of individual goods and services whereas microeconomics does not. D) they use different sets of tools and ideas.

B) microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy.

Which of the following is a macroeconomic issue? A) the hiring decisions that a business makes B) the effect of increasing the money supply on inflation C) the effect of an increase in the tax on cigarettes on cigarette sales D) the purchasing decisions that an individual consumer makes

B) the effect of increasing the money supply on inflation

Factors of production include all of the following EXCEPT A) entrepreneurship. B) machines made in past years. C) money. D) a wheat field that is not irrigated.

C. money

Economists point out that scarcity confronts

both the poor and the rich.

In economics, the term "capital" refers to

buildings and equipment

An incentive

could be either a reward or a penalty.