Macro Economics: Chapters 1

Which of the following is a labor resource? A) A computer programmer. B) A computer. C) Silicon (sand) used to make computer chips. D) A piece of software used by a firm.

A computer programmer.

Which of the following is a capital resource? A) A computer programmer. B) A corporate bond issued by a computer manufacturer. C) Silicon (sand) used to make computer chips. D) A piece of software used by a firm.

A piece of software used by a firm.

Which of the following is a land resource? A) A farmer. B) An oil drilling rig. C) A machine for detecting earthquakes. D) Natural gas.

Natural gas.

Microeconomics is concerned with:

a detailed examination of specific economic units that make up the economic system.

The term "other things equal" means that:

a number of relevant variables are assumed to be constant.

The law of increasing opportunity costs is reflected in a production possibilities curve that is:

bowed out from the origin.

The study of economics is primarily concerned with:

choices that are made in seeking the best use of resources.

The point on the production possibilities curve that is most desirable can be found by:

comparing marginal benefits and marginal costs.

Economic resources are also called:

factors of production.

A normative statement is one that:

is based on value judgments.

The four factors of production are:

land, labor, capital, and entrepreneurial ability.

Economics involves marginal analysis because:

most decisions involve changes from the present situation.

A positive statement is one that is:

objective and is based on facts.

The Latin term "ceteris paribus" means:

other things equal.

A production possibilities curve illustrates:

scarcity.

Macroeconomics can best be described as the:

study of the large aggregates of the economy or the economy as a whole.

Any point inside the production possibilities curve indicates:

that more output could be produced with the available resources.

Opportunity costs exist because:

the decision to engage in one activity means forgoing some other activity.

The economizing problem is:

the need to make choices because economic wants exceed economic means.

The scientific method is:

used by economists and other social scientists, as well as by physical scientists and life scientists, to formulate and test hypotheses.