Econ 101 first Exam

Because resources are scarce

They must be allocated between competing uses

Every person's and ultimately, every economy's standard of living depends on the effective use of resource

True

When the marginal blank equals the marginal blank, there is no incentive to either increase or decrease the level of activity performed

cost, benefit

The problems of inflation are

major topics of macroeconomics

Suppose that a university decides to spend $1 million to upgrade personal computers and scientific equipment for faculty rather than spend $1 million to expand parking for students. This example illustrates

opportunity costs.

Labor as a recourse is defined as all blank and blank activity devoted to producing goods and services

physical and mental

The opportunity cost to a consumer who smokes cigarettes consists of the

product that the consumer could have bought instead of cigarettes.

Ralph Waldo Emerson once wrote: "Want is a growing giant whom the coat of Have was never large enough to cover." According to economists, "Want" exceeds "Have" because

productive resources are scarce.

A major problem faced by developing countries is the relative blank of drinkable water as compared to water in general

scarcity

The basic truth that underlies the study of economics is the fact that we all face

scarcity

Economic analysis assumes "rational or purposeful behavior," which means that people will pursue decisions or actions

that will increase their well-being.

Opportunity cost is defined as

the value of the opportunity that you give up when you choose one activity instead of another

Lauren makes $150 a day as a bank clerk. She takes two days off work without pay to fly to another city to attend the concert of her favorite band. The cost of transportation and lodging for the trip is $250. The cost of the concert ticket is $50. The opportunity cost of Lauren's decision to attend the concert is

$600.

Martin has given himself an entertainment budget of $5 per week. he has decided that each week he will spend that $5 by either attending a matinee movie at his local theater or downloading five songs by one of his favorite artists. What is the non- monetary opportunity cost of seeing a movie this week?

5 songs

Example of capital resource

A piece of software used by a firm

Which of the following is Macroeconomics

Are increasing wage demands by workers contributing to price inflation

The more of a good or a service that is produced in a given period of time, the higher the marginal blank that is associated with each additional unit

Cost

Blank is the study of how individuals and societies allocate scarce resources among many competing uses and how this decision-making affects the economy at large.

Economics

blank is the study of how individuals and institutions make decisions in a world of scarce resources

Economics

Blank ability is the talent or ability to combine land, labor and capital to produce goods and services

Entrepreneural

Someone who is self interested only performs actions for his or her own benefit and not for the benefits of others.

False

Suppose a firm spends $10,000 to train its employees on a new, company-wide software program that it has already purchased and intends to adopt in the following month. In this case, the knowledge gained through the training is considered

Human capital

Optimization

If MB is > or equal to MC DO IT If MB < MC DON't Do it

Micro or Macro The effect of an extension in unemployment benefits on the unemployment rate in the country. The effect of a tax credit for purchasing new energy-compliant appliances on the use of capacity The effect of a harsh growing season on the price of corn The effect of an increase in the inflation rate on household's decision to save or spend money

Macro, Micro, Micro, Macro

The process of making choices in increments by evaluating the additional, or marginal benefit against the additional, or marginal, cost of an action is called:

Marginal decision making

When you decide, after studying for three hours, that another hour of sleep is more beneficial to you that a forth hour of studying, you are engaging in:

Marginal decision making

Is the volume of wine produced in one year dependent on the price of wine?

Micro

The value of the next best, forgone alternative is the

Opportunity cost

Blank is the idea that people make choices to maximize the overall benefit, or utility, of an action subject to its cost

Optimization

When a decision maximizes overall benefit, it is called

Optimization

Blank capital refers to tangible items that are created to increase productivity, such as, tools, factories, machinery, etc.

Physical

Money spent by firm on machinery that is designed to improve future productivity is called:

Physical capital

Because resources are ___ they must be allocated between competing uses

Scarce

What does "there is no such thing as a free lunch" mean in economics

Scarce resources are used up to provide "freebies" and giveaways.

A common economic situation where an economy's resources are insufficient to meet the existing wants and must be used judiciously is referred to as

Scarcity

- interest is the idea that people choose to do the things that interest them

Self

Marginal cost

The additional cost associated with one more unit of activity

Evaluate the following statement: "I love ice cream. But I've eaten so much today, I can't possibly eat another cup"

The marginal benefit of eating ice cream is falling

Which of the following is a microeconomic statement

The price of personal computers declined 4.7 percent last year

If you continue to producing when marginal benefit is less that marginal cost,

Wasting resources that would be spent else where

Which is an example of macroeconmics

What policies would be recommended for stimulating national economic growth

Example of labor resource

a computer programmer

Which of the following is the best synonym for "marginal" in economics?

additional

Individuals and businesses must choose between the different uses for their available resources. This is called blank resources and is due to the concept of

allocating; scarcity

the process of assigning a good, a service, or a resource to one use instead of another describes

allocation

Which of the following lists includes only capital resources

automobiles owned by a car rental firm; computers at the car rental agency; the vans that shuttle rental customers to and from the airport

Mia wants to buy a book. The economic perspective suggests that Mia will buy the book if the

marginal benefit of the book is greater than or equal to its marginal cost.

Self interest, marginal decisions, and optimization all form the basis of

rational decision making

tomatoes represent a small subset of food, so tomatoes are:

relatively more scarce than food in general

anything that is used to produce a good or a service, whether it is provided by nature or is manufactured is a

resource

The term Blank describes the fact that unlimited wants cannot be completely satisfied with limited resources

scarcity

When a state government chooses to build more roads, the resources used are no longer available for public education programs. This dilemma illustrates the concept of

scarcity.

Which of the following is not a main function of the entrepreneur?

to make routine pricing decisions