MACRO ECO SPRING 2017

All the lines in a grocery store seem to be the same length why:

Because everyone is trying to choose the shortest one

VHS vs. the other type

It was easier to use the same system as others used, to share movies

If Scout has an absolute advantage over Dill

Then Scout can accomplish more in a given hour than Dill can

Average benefit

total benefit of undertaking n units of an activity and divided by n

Average cost

total cost of undertaking n units of an activity and dividing by n

Some states have started giving tax credits to homeowners who install solar panels. This is an example of:

Using the incentive principle to encourage homeowners to switch to solar energy.

Which of the following would not be analyze in microeconomics?

Whether the federal budget should always be balanced.

Access to internet example for a naturalist:

collect more info before making the purchase because the cost of finding and acquiring it is

If a nation has the lowest opportunity cost of producing a good, that nation has a(n):

comparative advantage

Bank hours example:

cost of having it 24 hours is lower today

A study that deals with the salaries of the university professors would be:

microeconomics

Studying how Pat allocates her time between teaching classes and assisting undergraduate students is an example of:

microeconomics

Two major divisions in economics, called:

microeconomics and macroeconpmics

In a free market economy

most people are in a win win situation

marginal

near the edge or the edge. the last unit used, bought, produced, or hired

Effective free market ethical systems have

no moral foundation

Ethical rules based on fairness and morals are

normative ethics

One thing that distinguishes normative principles from positive principles is that:

normative principles tell us how people should make economic decisions, and positive principles tell us how people actually do make decisions

Positive economic principles are those that:

predict how people will behave

Benefit

something that promotes well-being, profit, enjoyment, or advantage

economic surplus

the benefit of taking the action minus its cost

The incentive principle states that a person is more likely to do something if:

the benefits from doing it increases.

marginal benefit

the increase of total benefit that results from carrying out one additional unit of activity

More efficient positive market ethics will not improve

the moral externalities of a market

economics

the study of how people make choices under conditions of scarcity and of the effects of those choices on individuals and society

macro economic

the study of the performance of national economies

4 decision making pitfalls

1. measuring costs or benefits as proportions rather than absolute amounts. 2. ignoring opportunity costs. 3. failure to ignore sunk costs. 4. failure to understand the difference between average and marginal

Which of the following statements is always true?

Comparative advantage does not require absolute advantage

Which of the following questions would not be answered in macroeconomics?

Did the sharp increase in gasoline prices alter SUV sales?

production possibilities curve

a GRAPH that describes the maximum amount of one good that can be produced for every possible level of production of another good

sunk costs

a cost that is beyond recovery at the moment a decision must be made

The incentive principle is an example of:

a positive economic principle

scarcity principle (no free lunch principle)

although we have boundless needs and wants, the resources available are limited, having more of one good thing usually means having less of another

cost benefit principle

an individual (or firm or society), should take an action if, and only if, the extra benefits from taking the action are at least as great as the extra cost

attainable point

any combination of goods that can be produced using currently available resources

unattainable point

any combination of goods that cannot be produced

An economic naturalist is described as someone who:

applies everyday insight into everyday life

Cross benefit analysis

can not determine the fairness of rules

To say that an individual possesses an absolute advantage in the production of software means that individual:

can produce more and/or higher quality software in a given amount of time

In order for a markets ethics to be effective, this can not occur

everyone must agree to take part in the market

Larry has a comparative advantage in writing a term paper if he:

if he has the lowest opportunity cost for writing a term paper

absolute advantage

if they can perform the task in less time

If the govt. wanted to use the incentive principle for smoking they would:

increase taxes on cigarettes, effectively raising the prices

Last year interest rates fell. The field of economics that would be most concerned with this is:

macroeconomics

The impact of government policies on the building of the new roads and highways would be studied

macroeconomics

Having a comparative advantage in a particular task means that:

you give up less to accomplish that task than do others