Principles of Economic2e

Which of the following statements most likely lies within the realm of macroeconomics?

Due to an economic recession, manufacturing firms began implementing layoffs of their workforces.

Which of the following best describes the opportunity cost of an action?

It is a subjective valuation that can be determined only by the individual who chooses the action

Which of the following best describes the opportunity cost of an action?

It is a subjective valuation that can be determined only by the individual who chooses the action.

Which of the following best describes macroeconomics?

It is concerned with the expansion and contraction of the overall economy.

What is the basic difference between macroeconomics and microeconomics?

Microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.

What is the basic difference between macroeconomics and microeconomics?

Microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets).

Which of the following is most likely a topic of discussion in macroeconomics?

a decrease in the unemployment rate

Also called the opportunity set—a diagram which shows what choices are possible—which of the following is the model that economists use to illustrate the process of individual choice in a situation of scarcity?

budget constraint

In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of:

buyers and sellers.

Marginal thinking is best demonstrated by:

choosing to spend one more hour studying economics because you think the improvement in your score on the next quiz will be worth the sacrifice of time.

The law of ____________________________ explains why people and societies rarely make all-or-nothing choices.

diminishing marginal utility

Scarcity implies that:

it is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available.

Most real-world choices aren't about getting all of one thing or another; instead, most choices involve _________________, which includes comparing the benefits and costs of choosing a little more or a little less of a good.

marginal analysis

As a person receives more of a good, the _______________ from each additional unit of the good declines.

marginal utility

Attending college is a case where the ________________ exceeds the monetary cost.

opportunity cost

If macroeconomics looks at the economy as a whole, it focuses on which of the following?

people who are unemployed

Forgetting about the money that's irretrievably gone and instead focusing on the marginal costs and benefits of future options, is the lesson of which of the following?

sunk costs

The opportunity cost of attending university is likely to include all except which of the following?

the cost of haircuts received during the school term

In a discussion of economics, which of the following would exert the most influence on an individual firm's decision to hire workers?

the macroeconomy

Which of the following are not typically considered macroeconomic topics?

the profit-maximizing decisions of an individual manufacturer.