MicroECON Chapter 1 HW

Specialization in production is important primarily because it: A. results in greater total output. B. allows society to avoid the coincidence-of-wants problem. C. allows society to trade by barter. D. allows society to have fewer capital goods.

A. results in greater total output.

Economic systems differ according to what two main characteristics? A. who owns the factors of production, and the methods used to coordinate economic activity B. the technology used in production, and the quantity and quality of natural resources C. how goods are produced, and who gets them D. the political system in place, and the degree of scarcity facing the economy

A. who owns the factors of production, and the methods used to coordinate economic activity

Which of the following will not produce an outward shift of the production possibilities curve? A. an upgrading of the quality of a nation's human resources B. the reduction of unemployment C. an increase in the quantity of a society's labor force D. the improvement of a society's technological knowledge

B. the reduction of unemployment

Which of the following statements pertains to macroeconomics? A. Because the minimum wage was raised, Mrs. Olsen decided to enter the labor force. B. A decline in the price of soybeans caused farmer Wanek to plant more land in wheat. C. National income grew by 2.7 percent last year. D. The Pumpkin Center State Bank increased its interest rate on consumer loans by 1 percentage point.

C. National income grew by 2.7 percent last year.

Which of the following is a positive statement? A. The humidity is too high today. B. It is too hot to jog today. C. The temperature is 92 degrees today. D. Summer evenings are nice when it cools off.

C. The temperature is 92 degrees today.

The production possibilities curve illustrates the basic principle that... a) if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced b) an economy will automatically obtain full employment of its resources c) the production of more of any one good will in time require smaller and smaller sacrifices of other goods d) an economy's capacity to produce increases in proportion of its population size

a) if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced

You should decide to go to a movie a) if the marginal benefit of the movie exceeds its marginal cost. b) because movies are enjoyable. c) if your income will allow you to buy a ticket. d) if the marginal cost of the movie exceeds its marginal benefit.

a) if the marginal benefit of the movie exceeds its marginal cost.

Refer to the budget line shown in the diagram. Which of the following combinations of goods is unattainable for this consumer? a) 1 unit of C and 8 units of D b) 5 units of C and no units of D c) 2 units of C and 6 units of D d) 4 units of C and 6 units of D

d) 4 units of C and 6 units of D

The four factors of production are a) labor, capital, entrepreneurial ability, and money. b) labor, capital, technology, and entrepreneurial ability. c) land, labor, capital, and money. d) land, labor, capital, and entrepreneurial ability.

d) land, labor, capital, and entrepreneurial ability.

The market system's answer to the fundamental question "How will the goods and services be produced?" is essentially: A. "With as much machinery as possible." B. "Using the latest technology." C. "By exploiting labor." D. "In ways that minimize the cost per unit of output."

D. "In ways that minimize the cost per unit of output."

Suppose that a university decides to spend $1 million to upgrade personal computers and scientific equipment for faculty rather than spend $1 million to expand parking for students. This example illustrates what?

Opportunity costs

The economizing problem is one of deciding how to make the best use of...

limited resources to satisfy virtually unlimited wants

Households and businesses are...

sellers in the resource and product markets respectively

The two basic markets shown by the simple circular flow model are: a. household and business. b. free and controlled. c. product and resource. d. capital goods and consumer goods.

c. product and resource.

In 2013, McDonalds introduced Fish McBites, which failed to catch on the public was subsequently dropped from the menu. This failure illustrates the idea for...

consumer sovereignty

Indicate whether the following statement(s) applies to microeconomics or macroeconomics: a. The unemployment rate in the United States was 9.7 percent in March 2010. b. A U.S. software firm discharged 15 workers last month and transferred the work to India. c. An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise. d. U.S. output, adjusted for inflation, decreased by 2.4 percent in 2009. e. Last week, Wells Fargo Bank lowered its interest rate on business loans by one-half of 1 percentage point. f. The consumer price index rose by 2.7 percent from December 2008 to December 2009.

a. Macroeconomics b. Microeconomics c. Microeconomics d. Macroeconomics e. Microeconomics f. Macroeconomics

Match each term with the correct definition. a. The next-best thing that must be forgone in order to produce one more unit of a given product: b. The pleasure, happiness, or satisfaction obtained from consuming a good or service: c. The social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity: . d. Making choices based on comparing marginal benefits with marginal costs:

a. opportunity cost b. utility c. economics d. marginal analysis

In terms of the circular flow diagram, households make expenditures in the _____ market and receive income through the _____ market. a) capital; product b) product; resource c) product; financial d) resource; product

b) product; resource

The study of economics is primarily concerned with a) keeping private businesses from losing money. b) determining the most equitable distribution of society's output. c) choices that are made in seeking the best use of resources. d) demonstrating that capitalistic economies are superior to socialistic economies.

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