ECON 201 Module 1 SG with PPT Slides for 1 and 2

You spend $10 on Chick-Fil-A every day for lunch. However, you figure out that if you pack a lunch, it would cost you $3. What is the opportunity cost of buying Chick-Fil-A?

$7

Smith divided pin-making into how many operations?

18

Prices is one thing that acts as what in Economics?

A motivator

If someone is an efficent producer in terms of absolute value of resource, then they have what type of advantage?

Absolute

In order to measure (abs or comp adv.), take two activities and measure how much they cost in terms of a common resource.

Absolute

Monetary policy are policies that affect ______ lending, ______ rates, and ______ markets.

Bank, Interest, Capital

Marginal Analysis is comparing the ___________ and costs of choosing a ________ more or a little less of a ________.

Benefits; little; good

From people making rational choices and having more experience with decision making, how can our choices be described as?

Better and efficient

According to the Invisible Hand Metaphor, how can individuals pursuing their own interest end up benefiting society?

By providing things people need and want.

Adam Smith argued that humans are self-___________ and ___________.

Centered; Altruistic

In order to measure (abs or comp. adv.), take the same two activities and measure how much they cost in terms of each other.

Comparative

If someone produces something at a lower opportunity cost, then they have what type of advantage?

Comparative Advantage

Sunk Costs are ________ that were incurred in the past and can't be ___________ They shouldn't affect the current _________.

Costs; Recovered; Decision

Why did Adam Smith argue that the Division of Labor would be powerful even if all humans were identical?

Differences in productive capacity are learned.

Division of Labor is a way something is produced is ___________ into tasks by different workers.

Divided

Why Study Economics? World conflicts have _________ dimension, importance of economics to _______ citizenship, and makes you a __________ thinker.

Economic, good; well-rounded

T/F: Economics is a form of moral instruction; it describes economic behavior as it actually exists.

False

Opportunity Cost is what must be _______ up to obtain something desired.

Given

Example of rational choice making?

Going grocery shopping

Would a high or low opportunity cost lead to easier decision making?

High

Many times the incentives created with a policy change are?

Ignored or Misunderstood

Many times the incentives created with a change in policy are ________ or __________-.

Ignored; Misunderstood

People can anticipate many outcomes if people understand what?

Incentives

Economies of Scale is as production level _________, the average cost of producing individual units __________.

Increases; Declines

Think about low prices. What would low prices discourage on the production side? Encourage on The consumption side?

Investment; More Consumption

Opportunity Cost is what you _______ when you _______.

Lose; Choose

Cost of one item is the _______ opportunity to do something else.

Lost

Micro decisions are influenced by the health of _______,

Macro

_________ allows people to learn a specialized set of skills and use pay to buy goods and services wanted.

Market

What occurs when the market fails to allocate resources efficently?

Market Failure

The division of labor gives rise and expands the extent of what?

Markets

Well functioning ________ work if property rights are enforced.

Markets

Subjective Value is the value of something comes from the human ______.

Mind

People have a ________ value when making their own economic choices.

Moral

The Law of Diminishing Marginal Utility states that as a person receives _______ of a good, the additional utility of the good __________.

More; Declines

The Rationality Assumption is the idea that people behave ____________.

Naturally

Can someone have a comparative advantage in both?

No

Positive or Normative: People shouldn't have to pay for a place to live.

Normative

Value is NOT determined by the ______ itself nor a product of the amount of ________ or resources.

Object; Labor

Core Competency is when a business focuses on ______ or a few products.

One

Specialization only makes sense if workers use the _____ they receive to _________ other goods and services.

Pay; Purchase

You pay $30 to watch a musical and you do not enjoy watching it. You think about leaving at intermission. What is the sunk cost?

Paying the $30.

What example does Adam Smith use to convey that labor is divided into the number of operations fitting the extent of the market?

Pin-Making

Positive or Normative: 30% of Americans work at or below the minimum wage.

Positive

The sunk cost fallacy explains how people are focused on past investment rather than?

Present and future costs and benefits.

Specialization allows workers to focus on parts of __________ where they have an advantage.

Production

Specialization makes society more ___________ if people specialize in what they're best at.

Productive

Self-interested behavior and _______ seeking is also known as __________ choice and freedom.

Profit; Personal

What would be an unintended consequence for subsidies?

Rent-Seeking

Societies must choose how to use ___________.

Resources

Think about high prices. What would high prices attract on the production side? The consumption side?

Resources on production and rationing on consumption

People desire goods and services for ______________ or __________.

Satisfaction; Utility

Humans must make choices about how to use resources due to resources being?

Scarce

How would Economists portray people as?

Self-Interested

When there is a situation of comparative advantage, one can have ___________ in the low opportunity cost activity and gains from ________.

Specialization; Trade

When Marginal Cost equals Marginal Benefit, one should do what?

Stop buying an item.

When doing Marginal Analysis, you are comparing what of choose one more or less of a good?

The costs and benefits

The lesson about sunk costs is to forget about the money and time that is gone but rather focus on?

The current and future options

According to the Law of Diminishing Marginal Utility, what eventually declines as a person receives more of a good?

The extra utility and satisfaction from each additional unit.

Opportunity Cost is the value of what?

The next best alternative

Marginal Benefit refers to the benefit of what?

The next unit

Marginal Cost refers to the cost of what?

The next unit

Property rights can be defined as someone's ability to do what over a scarce resource?

To own and exercise

Fill in the blank: People face _________ refined into ____________. Rational people think at the _________ and people respond to __________.

Trade-offs; Opportunity Cost; Margin; Incentives

Choices involve ___________ and every choice has a _________.

Tradeoffs; cost

What would be an unintended consequence for seat belts?

Traffic Deaths

True/False: If there are two activities and one person has a comparative advantage in one activity, does the other person have a comparative advantage in the other?

True

What would be an unintended consequence for luxury tax?

Unemployment

Unintended consequences are effects that occur due to what?

Unplanned actions

What is the unit of measurement of satisfaction called?

Util (amount of utility)

If something is scarce, it means that at a price of zero, there is more want or availability of the resource?

Want

The scarcity problem is that not having enough to buy all we ________.

Want

Things have value because people ______ such items.

Want

Scarcity is when ________ exceed availability.

Wants

What incentives do property rights create?

Work and harvest

The ability to make choices about buying, _______, and saving is important personal ________.

Working; Freedom

Positive Statement: ________ as it is. _______based Can be _________.

World; Fact; Verified

A normative statement: describes how the ________ should be. Incorporate ___________.

World; Opinions