ch 1

In a modern mixed economy, who decides what goods and services will be produced? only the producers only consumers only the government All of these

All of these

Which of the following is a macroeconomics question? What determines the production of DVDs? What determines the inflation rate? What factors determine the price of carrots? What determines the wage of auto workers?

What determines the inflation rate?

What does the term "marginal" mean in economics? an additional or extra secondary illegal the edge of a market trivial

an additional or extra

In economics, tangible merchandise is referred to as: goods. invention. services. human capital.

goods.

Microeconomics is the study of: the global economy. how households and firms make choices. topics such as unemployment, inflation, and economic growth. the economy as a whole.

how households and firms make choices.

By definition, economics is the study of: how to make money in the stock market. the choices people make to attain their goals, given their scarce resources. supply and demand. how to make money in a market economy.

the choices people make to attain their goals, given their scarce resources.

Macroeconomics is the study of: how households and firms make choices. how firms make choices. the economy as a whole. how households make choices.

the economy as a whole.

Who receives the most of what is produced in a market economy? people who earn the highest incomes those who are willing and able to buy them everyone receives an equal amount lawmakers and other politically favored groups

those who are willing and able to buy them

Which of the following is a positive economic statement? Scarcity necessitates that people make trade-offs. Foreign workers should not be allowed to work for lower wages than the citizens of a country. People should not buy SUVs. The government should mandate electric automobiles.

Scarcity necessitates that people make trade-offs.

Which of the following is a microeconomics question? What factors determine the price of carrots? What determines the average price level and inflation? What will the level of economic growth be in the entire economy? How much will be saved and how much will be produced in the entire economy?

What factors determine the price of carrots?

The three fundamental questions that any economy must address are: How much will be saved; what will be produced; and how can these goods and services be fairly distributed? Who gets jobs; what wages do workers earn; and who owns what property? What will be the prices of goods and services; how will these goods and services be produced; and who will receive them? What goods and services to produce; how will these goods and services be produced; and who receives them?

What goods and services to produce; how will these goods and services be produced; and who receives them?

Which of the following is a normative economic statement? With rising mortgage rates and rising unemployment rates, the number of unsold homes has increased. Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable. Rising global demand for coal has led to increases in the price of coal. The state of Texas is considering increasing funds for light-rail development to promote the use of public transportation.

Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable.

Which of the following statements is true about profit? Profit is the difference between revenue and cost. Profit is calculated by multiplying price and quantity sold. Profit refers to the revenue received from the sale of a quantity of goods. The terms "accounting profit" and "economic profit" can be used interchangeably.

Profit is the difference between revenue and cost.

The term "market" in economics refers to: a group of buyers and sellers of a product and the arrangement by which they come together to trade. a place where money changes hands. an organization which sells goods and services. a legal institution where exchange can take place.

a group of buyers and sellers of a product and the arrangement by which they come together to trade.

The revenue received from the sale of ________ of a product is a marginal benefit to the firm. only profitable units the total number of units an additional unit no units

an additional unit

Economists assume that individuals: prefer to live in a society that values fairness above all else. are rational and respond to incentives. will never take actions to help others. behave in unpredictable ways.

are rational and respond to incentives.

In economics, the term "equity" means: everyone has an equal standard of living. only elected officials have high standards of living. the hardest working individuals consume all they want. economic benefits are distributed fairly.

economic benefits are distributed fairly.

Productive efficiency is achieved when: firms produce the goods and services that consumers value most. firms add a low profit margin to the goods and services they produce. firms produce goods and services at the lowest cost. there are no shortages or surpluses in the market.

firms produce goods and services at the lowest cost.

In economics, the accumulated skills and training that workers have is known as: human capital. innovation. entrepreneurship. physical capital.

human capital.

All of the following are part of an economic model except: data. hypotheses. opinions. assumptions.

opinions.

The highest valued alternative that must be given up to engage in an activity is the definition of: marginal cost. marginal benefit. economic equity. opportunity cost.

opportunity cost.

Economic models do all of the following except: simplify some aspect of economic life. answer economic questions. make economic ideas explicit and concrete for use by decision makers. portray reality in all its minute details.

portray reality in all its minute details.

Every society faces economic trade-offs. This means: producing more of one good means less of another good can be produced. society's output cannot be made available to all. some people live better than others do. not everyone can have enough goods to survive.

producing more of one good means less of another good can be produced.

In economics, activities done for others, such as providing house cleaning or dental work, are referred to as: technology. physical capital. goods. services.

services.

Marginal analysis involves undertaking an activity: only when its marginal benefits are positive. only if its marginal costs are greater than its marginal benefits. until its marginal benefits equal marginal costs. until its marginal costs start declining.

until its marginal benefits equal marginal costs.