Micro Chpt 1

Which of the following is most likely a topic of discussion in macroeconomics?

a decrease in unemployment rate

In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________, which means the way in which the work required to produce a good or service is divided into a number of tasks that are performed by different workers.

division of labor

Because of their relatively small national economies, which of the following is most likely considered to be the most important factor for Belgium, Korea, and Canada to take full advantage of specialization?

international trade

When nations desire a healthy macroeconomy, they typically focus on three goals, one of these being:

low inflation

In a _______________________, most economic decisions about what to produce, how to produce it, and for whom to produce it are made by buyers and sellers.

market-oriented economy

The basic difference between macroeconomics and microeconomics is:

microeconomics concentrates on the behaviour of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.

The basic difference between macroeconomics and microeconomics is that:

microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets).

Which of the following best characterizes the circular flow of income?

Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.

Which of the following statements most likely lies within the realm of macroeconomics?

Due to an economic recession, manufacturing firms began implementing layoffs of their workforces.

In the circular flow diagram model:

both a and b are correct

In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of:

buyers and sellers

Specialization:

can lead to an increase in overall production

Economic models like the _____________________ are not physical models, but instead are diagrams or graphs or even mathematical equations that represent economic patterns or theories.

circular flow diagram

In which of the following countries will the national government have the greatest influence with respect to the nation's economy?

cuba

_____________ - 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

Which of the following is generally accepted as a valid criticism of the production of useful goods and services?

environmental pollution

The circular flow diagram of economic activity is a model of the:

flow of goods and services, and payment between households and firms

In the ______________, households receive goods and services and pay firms for them.

goods and services market

In a command economy, the __________ either makes most economic decisions itself or at least strongly influences how the decisions are made.

government

If macroeconomics looks at the economy as a whole, it focuses on which of the following?

unemployed people