basic econ exam one

rises, rises

The law of increasing opportunity costs states that as production of a particular good ____, the opportunity cost of producing an additional unit _____.

economic problem

The problem that everyone has of unlimited wants but limited means to satisfy those wants is called the _____

innovate, take risks, make decisions

What roles do entrepreneurs play in the economy:

A

When economists compare the additional or dynamic costs and additional or incremental benefits of a decision, they are engaging in which of the following? A: marginal analysis B: demand curve analysis C: production possibilites analysis D: supply and demand analysis

D

Which of the following is a result of having scarce economic resources for the production of goods and services? A: poverty and unequal distribution of wealth B: deflation C: the production of unlimited goods and services D: fewer options that require choices

C

Which would best explain a decrease in both the price and the quantity of a product over a period of time? A: a decrease in people's incomes, and the product is an inferior good B: a long strike by workers who make the product C: a decrease in the price of a substitute good D: a technological improvement in production methods

scarce

____ economic resources means limited goods and services

macroeconomics

______ is the discipline that examines the performance and behavior of an economy as a whole

budget line

a curve showing various combinations of two products a consumer can purchase with a specific amount of income

production possibilites table

A _____ lists the different combinations of two products that can be produced with a specific set of resources, assuming full employment. Multiple choice question.

budget

A consumer's ____ line or constraint shows various combinations of two products that can be purchased with a specific amount of income.

economic principle

A statement about economic behavior or the economy that enables prediction of the probable effects of certain actions is known as a(n) _____

is a reality that underlies economic behavior

According to economists, economic self-interest ____

2 bananas

Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. For this consumer, the opportunity cost of buying one more apple is what?

the consumer doesnt make a purchase, but society's resources are used in production

Consider the statement "Buy 2, get 1 free". The "1 free" is free to the buyer but not to society because:

marginal benefit curve is downward sloping, marginal cost curve is upward sloping

Explain the typical shapes of marginal-benefit and marginal-cost curves:

curve shifts inward (because of the destruction of resources)

How (if at all) does the following event affect the location of a country's production possibilities curve? - a devastating earthquake destroys numerous production facilities

curve shifts outward (because more production is possible with existing resources)

How (if at all) does the following event affect the location of a country's production possibilities curve? - a new technique improves the efficiency of extracting copper from ore

no change

How (if at all) does the following event affect the location of a country's production possibilities curve? - the number of unemployed workers increases

curve shifts outward

How (if at all) does the following event affect the location of a country's production possibilities curve? - the quality of education increases

unlimited wants but limited income (this goes for ALL individuals in a society)

How can the level of wants and income of the wealthiest individuals in a society be described?

fewer

If current output is such that marginal cost exceeds marginal benefit, should more or fewer resources be allocated to this product?

inelastic

If the University Chamber Music Society decides to raise ticket prices to provide more funds to finance concerts, the Society is assuming that the demand for tickets is _____

D

Janelle runs a custom sneaker company. Demand for the company's products has been high, and Janelle wants to know when production will reach a level of optimal output. She will know the company has achieved production optimization when which of the following conditions are met? A: the marginal cost curve flattens out B: the marginal benefit is double the marginal cost C: the demand curve reaches zero D: the marginal cost equals the marginal benefit

scarce economic resources

Land and mineral resources, transportation and communication facilities, factories and farm buildings, equipment, tools, and machinery are all examples of _____

A

Marginal analysis involves the evaluation of which of the following? A: the additional cost versus the additional benefit of a decision B: the total costs versus marginal costs of a decision C: the marginal benefits and total benefits of a decision D: the total costs versus total benefits of a decision

unlimited

People desire goods and services that provide maximum utility. In fact, our desires or wants are ____

outside

Points lying ____ the production possibilities curve represent greater but unachievable levels of output with current inputs than that at any point on the curve.

choosing goods that maximize utility and economic wants exceeding economic means

SELECT ALL THAT APPLY: Every individual, whether rich or poor, faces the economizing problem of: - unlimited personal income - choosing goods that maximize utility - economic wants exceeding economic means

movement up and to the left along the demand curve for digital cameras

an increase in the price of digital cameras will result in a what kind of shift on the demand curve?

10

if you knew that the vertical intercept for a straight line was 15, that the slope was -0.5, and that the independent variable had a value of 8, the value of the dependent variable would be:

$9,000

in a linear equation relating income and consumption, you know that the intercept is $1,000 and the slope fo the line is 0.4. If income is $20,000, then consumption is:

market

institution that brings together buyers and sellers

macro

is this macro or micro? The unemployment rate in the US was 3.7% in December 2018

macro

macro or micro? The consumer price index rose by 2.2% from November 2017 to November 2018

micro

macro or micro? A US software firm discharged 15 workers last month and transferred the work to India

micro

macro or micro? An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise

micro

macro or micro? Last week, Wells Fargo Bank lowered its interest rate on business loans by one half of 1 percentage point

macro

macro or micro? US output, adjusted for inflation, grew by 3% in 2017

not productive

money is not considered a capital resource in economics because money is ____

independent goods

running shoes and staplers are what?

the principle of increasing opportunity cost is relevant

the fact that the slope of the production possibilites curve becomes steeper as we move down along the curve indicates that ____

buyer responsiveness to price changes

the price-elasticity of demand coefficient measures what?

utility

the satisfaction or pleasure obtained by consumers from consuming a good or service

economic principles

the scientific method is the technique used by economists to determine what?

C

the supply of product X is perfectly inelastic if the price of X rises by A: 5% and quantity supplied rises by 7% B: 8% and quantity supplied rises by 8% C: 10% and quantity supplied stays the same D: 7% and quantity supplies rises by 5%

opportunity cost

the value of the best alternative that is given up in order to do or get something

false

true or false: - an economic hypothesis is a statement about economic behavior that is well-tested and widely accepted

labor, land, capital, entrepreneurship

what are the 4 classifications of resources?

inelastic

when the price of a product increases by 15%, the quantity demanded decreases by 10%. We can therefore conclude that the demand for this product is ____

A

which of the following demonstrates society's economic problem? A: deciding how to divide limited resources between various services B: ensuring all services are given all the funding they need C: knowing that money is not an economic resource D: understanding that taxes means that the country's resources are limited