Microeconomics Study Guide Answers
Which of the following terms best refers to a fair distribution of economic benefits? Equity, Productive efficiency, Allocative efficiency, Voluntary exchange
Equity
Which of the following is a positive economic statement? The government should do something to help the homeless. We should tax the wealthy more and use the money to provide services for the poor. If minimum wage rates rise, then unemployment will rise. Full employment policies should be pursued.
If minimum wage rates rise, then unemployment will rise.
Which of the following is not a possible opportunity cost of attending college? The cost of housing Backpacking across Europe instead of attending college Starting a business instead of attending college Wages you could have made instead of attending class and studying
The cost of housing
If the president of Columbia commented that "we should do something to reduce inflation in Columbia," this would be an example of:
a normative statement
Graphs are often used in economics because they:
can simplify complex topics
Economic models often simplify the real world by holding all things equal and changing one variable to determine the impact of the change. The "all things equal" assumption is also known as:
ceteris paribus
Understanding economics can help policymakers devise strategies to do all of the following except: reduce poverty levels eliminate climate change increase our standard of living encourage business formation
eliminate climate change
One of the first steps in deciding whether to complete your education is to:
evaluate the marginal cost and marginal benefit of that decision.
Economics
is concerned with how people respond to incentives
Economics is the study of choice under conditions of:
scarcity
The slope of a straight line equals the change in the value on the __________ axis __________ by the change in the value of the other axis measured between any two points on the line.
vertical, divided
The vertical axis on a graph is also known as the:
y-axis
