Econ Chapter 1-2 Quiz Questions

Timothy is given $20 each week to buy lunch and he only chooses between two goods, burritos and teriyaki bowls. If burritos cost $2 each and teriyaki bowls cost $4 each, what is the opportunity cost of one teriyaki bowl?

2 burritos

When choosing the amount of two goods to produce on a production possibilities frontier, the particular mix of a good produced by a society maximizes societies desires given their resource constraints is said to be _______

Allocative Efficient

What is the name of the model that represents the exchange between households and firms in the market for goods and services and the labor market?

Circular Flow Diagram

Timothy is given $20 each week to buy lunch and he only chooses between two goods, burrito and teriyaki bowls. The combinations of teriyaki bowls and burritos that cost exactly $20, thereby exhaling Timothys budget called the ________

Budget Constraint

Is a term referring to the fact that for many goods as the level of production increases, the average cost of producing each individual unit declines

Economies of Scale

The bowed out shape often seen in a production possibilities frontier is a result to?

Increasing opportunity cost between the two goods

As a person consumes more of a good, the _____ from each additional unit of the food declines

Marginal utility

What is a true command economy?

Means all decisions flow through a central government

Though certainly on the market end of the spectrum, the presence of institutions such as social security or even municipal transportation services suggest the economic system of the United States is best described as a _______

Mixed economy

Timothy is given $20 each week to buy lunch and he only chooses between two goods, burritos and teriyaki bowls. All possible combinations of burritos and teriyaki bowls in which Timothy can afford each week is called Timothy's ________

Opportunity Set

Which of the following statement about scarcity is true? Scarcity only affects countries with large populations Scarcity only impacts non renewable nautral resources Sacrcity refers to the situation that human wants exceed what is available Wealthy individuals, like Bill Gates, are not faced with the problem of sarcity

Sacrcity refers to the situation that human wants exceed what is available

According to the text, economics is best described as the study of how humans make decisions in the face of ________.

Scarcity

Homer decides to spend an hour playing basketball rather than studying. His opportunity costs can be described as the benefit to his grades from studying for an hour Nothing since he is playing for free at a local park The wear and tear on his sneakers from playing basketball Nothing since he would rather play basketball

The benefit to his grades from studying an hour

In a true command economy, what determines the answers to the most basic economic questions a society must face?

The government

Microeconomics is the study of

how individual agents within the economy make choices

A point inside the production possibilities frontier is said to be

inefficient

A point outside the production possibilities frontiers said to be

unattainable with current resources