Macroeconomics - Chapter 1 Review

A market...

1. Is often a physical place 2. Facilitates exchanges between buyers and sellers 3. Typically involves monetary transactions 4. Might not have well-defined geographical limits

Moderate exercise is better than none, but excessive exercise is harmful. What is the shape of the graph of health benefits versus hours of exercise per week if health benefits are measured on the vertical axis and exercise is measured on the horizontal axis?

A hill-shaped curve

Which of the following would be a topic considered in the field of macroeconomics? A. Studying the amazing recent growth of the Chinese economy B. Studying the movement of U.S. manufacturing firms to China C. Studying the differences in wages between menand women in the United States D. Studying the effect of rent controls on the housing market in New York City E. Studying the impact of environmental regulations on the well-being of human populations

A. Studying the amazing recent growth of the Chinese economy

Which of the following is an example of a positive statement? A. Workers with families should be paid at least the minimum wage B. If crime rates were reduced, the world would be a better place in which to live. C. Marginal tax rates should be reduced for individuals in the highest tax brackets. D. An increase in the price of gasoline will cause a reduction in the amount purchased. E. Corrupt politicians ought to be voted out of office.

D. An increase in the price of gasoline will cause a reduction in the amount purchased.

True or False. "There should be less discrimination against women" is an example of a positive statement.

False

True or False. A U-shaped curve has a positive slope everywhere.

False

True or False. Rational self-interest is equivalent to pure selfishness.

False

In a circular-flow model, households supply all of the following except...

Goods and Services

In economics, capital is defined as...

Human creations used in the production process

Economics is best defined as the study of how...

Individuals decide to use scarce resources in an attempt to satisfy their unlimited wants.

A normative economic statement...

Is a statement of what ought to be, not what is

A rational decision maker will take only those actions for which the expected marginal benefit...

Is greater than or equal to the expected marginal cost

A resource is something that...

Is used to produce goods and services

Households...

Own and sell resources

The difference between positive economic statements and normative economic statements is that...

Positive statements are based on fact while normative statements are based on opinion

Goods and services are exchanged in...

Product Markets

The labor market is an example of a...

Resource Market

Microeconomics is the study of...

The economic behavior of individual decision makers

True or False. An example of a positive economic statement is, "An increase in the price of a product causes consumers to purchase more of that product."

True

True or False. Normative economic statements refer to what should be.

True

True or False. The numerical value of the slope of a line depends in part on the units of measurement used.

True

One might commit the fallacy of composition by concluding that...

What is good for the individual is necessarily good for the group

If slope = -2 for a line on a graph with x on the horizontal axis and y on the vertical axis, then if...

x increases by 4, y decreases by 8