Microeconomics Ch.1

________ ​decide(s) what goods and services will be produced.

Consumers, firms, and government

__________ occurs when a good or service is produced at the lowest possible cost. __________ occurs when production is in accordance with consumer preferences.

Productive efficiency; Allocative efficiency

In your economics​ class, you scored a 68 on the first​ quiz, a 92 on the second​ quiz, and an 76 on the third quiz.

Your average quiz grade is 78.7

Societies organize their economies in two main ways to answer the three questions of​ what, how, and who. A society can have a _____________ economy in which the government decides how economic resources will be allocated. Or a society can have a __________ economy in which the decisions of households and firms interacting in markets allocate economic resources.

centrally planned; Market

What do economists mean by the word​ "marginal"?

extra or additional

Firms choose how to produce the goods and services they sell. In many​ cases, firms face a​ trade-off between using more workers or using more machines. For​ example,

many times in the past several​ decades, firms may have chosen between a production method in the United States that uses fewer workers and more machines and a production method in China that uses more workers and fewer machines.

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when

marginal benefit equals marginal cost.

Equity is

the fair distribution of economic benefits

The pie chart to the right illustrates hypothetical data for the market share for the United States automobile market. The percentage of the U.S. market that U.S. auto firms control is

%65

The diagram to the right shows a hypothetical demand curve for apples. The slope of this curve is

-1.17

Economists often are interested in percentage change from one period to the next. The percentage rate of change of gross domestic product​ (GDP) is an important macroeconomic variable. If in 2010 GDP was​ $11,150 billion​ dollars, and GDP increased to ​$11 comma 67511,675 billion in​ 2011, what is the growth rate of the U.S. economy in​ 2011?

4.7%

The bar graph to the right illustrates hypothetical data for the market share for the United States automobile market.The percentage of the U.S. market that U.S. auto firms control is

70​%. ​

Any model is based on making assumptions because A. models have to be simplified to be useful. B. we cannot analyze an economic issue unless we reduce its complexity. C. both a and b. Your answer is correct.D. neither a nor b.

A and B

he diagram to the right represents a demand curve for apples. The original demand curve is D1. If a factor other than price which affects demand​ changes, causing demand to decrease, the resultant demand curve is represented by

D3

___________ is the study of the choices people make to attain their​ goals, given their scarce resources.

Economics

One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls

Scarcity

Microsoft charges a price of​ $599 for a copy of Windows 7. Is this pricing decision​ rational?

When we assume the managers at Microsoft have used all available information and have weighed all known benefits and​ costs, we are assuming rationality.

Microeconomics is the study of

how households and firms make​ choices, how they interact in​ markets, and how the government attempts to influence their choices.

In the United​ States, who receives the goods and services produced depends largely on _________

how income is distributed

a ________ economy is an economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources.

mixed

The diagram to the right illustrates a demanddemand curve. As with all demanddemand ​curves, this​ curve's slope is

negative

In the diagram to the​ right, the curve labeled​ "S" is apparently​ _____, while the curve labeled​ "D" is apparently​ _____.

nonlinear; linear

The diagram to the right illustrates a very important relationship in economics between two​ variables: the price of a good and the quantity demanded of that good. The two variables in this diagram​ are:

price​ (dollars per​ bushel) on the vertical axis and quantity​ (bushels per​ week) on the horizontal axis.

Equity is

the fair distribution of economic benefits.

Opportunity cost is

the highest valued alternative that must be given up to engage in an activity.

Economists believe that an activity should be continued up to the point where

the marginal benefit from the activity is equal to the marginal cost.

When the federal government crafts environmental policies that make it less expensive for firms to follow green​ initiatives,

the policies are consistent with economic incentives.

Macroeconomics is

the study of the economy as a​ whole, including topics such as​ inflation, unemployment, and economic growth.

The slope of a curve is defined as the YΔY divided by the XΔX .

y/x

Which of the following shows a negative linearnegative linear ​relationship?

y=89−6.1x

​Trade-offs force society to make​ choices, particularly when answering the following three fundamental​ questions:

​One, what goods and services will be​ produced? Two, how will the goods and services be​ produced? Three, who will receive the goods and services​ produced?

When we graph the relationship between two​ variables, we often want to draw conclusions about whether changes in one variable are causing changes in the other variable. Doing​ so, however, can lead to incorrect conclusions. Reasons for drawing incorrect conclusions about cause and effect include A. reverse causality. B. an omitted variable. C. both a and b. Your answer is correct.D. none of the above.

A and B

When we graph the relationship between two​ variables, we often want to draw conclusions about whether changes in one variable are causing changes in the other variable. Doing​ so, however, can lead to incorrect conclusions. Reasons for drawing incorrect conclusions about cause and effect includeA. an omitted variable. B. reverse causality. C. both a and b. Your answer is correct.D. none of the above.

A and B

The diagram to the right illustrates a hypothetical demand curve representing the relationship between price​ (in dollars per​ unit) and quantity ​(in ​1,000s of units per unit of time​).

Total revenue is ​$18001800. ​(Enter your response as an​ integer.)

Economics assumes people and​ firms:

​are rational, respond to​ incentives, and make decisions by comparing marginal benefits with marginal costs.

The diagram to the right illustrates a common economic relationship. Economists know this relationship as marginal cost​ (MC). The diagram illustrates the relationship between the change in total cost and quantity produced. There are three lines​ (A, B, and​ C) drawn tangent to the MC curveAt line​ A, the MC curve has a​ _____ slope. Where lines B and C touch the MC​ curve, the slope is​ _____ and​ _____.

​negative; positive; increasing

Which of the following statements about the idea that people are rational is​ correct?

The idea assumes that consumers and firms use all available information as they act to achieve their goals.

Economics is a social science because

all of the above

The diagram to the right illustrates a hypothetical demand curve representing the relationship between price​ (in dollars per​ unit) and quantity​ (in 1,000s of units per unit of​ time).

The area of the triangle shown on the diagram is ​$1,200,500

_______ analysis is concerned with what is​, and ________ analysis is concerned with what ought to be. Economics is about __________ analysis ​, which measures the costs and benefits of different courses of action.

Positive, Normative, Positive

Economics is a social science because A. it is based on studying the actions of individuals. B. it applies the scientific method to the study of the interactions among individuals. C. it considers human behaviorlong dash—particularly ​decision-making behavior. D. all of the above.

all of the above

A hypothesis in an economic model is__________ A. a statement that may be either correct or incorrect about an economic variable. B. tested before it can be accepted​ (or not​ rejected). C. usually about a causal relationship. D. all of the above.

all the above

The diagram to the right is an example of

a​ time-series graph.

A market is a group of ________ of a good or service and the institution or arrangement by which they come together to trade.

buyers and sellers

A _________ economy is an economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources.

Mixed