Chapter 1 Econ

With these curves, the optimal allocation of resources to a particular product will occur when

MB = MC

The consumer price index rose by 0.2 percent from August 2014 to August 2015:

Macroeconomics

The unemployment rate in the United States was 5.1 percent in September 2015:

Macroeconomics

U.S. output, adjusted for inflation, increased by 2.4 percent in 2014:

Macroeconomics

Making choices based on comparing marginal benefits with marginal costs:

Marginal analysis

A U.S. software firm discharged 15 workers last month and transferred the work to India:

Microeconomics

An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise:

Microeconomics

Last week Wells Fargo Bank lowered its interest rate on business loans by one-half of 1 percentage point:

Microeconomics

How (if at all) do each of the following events affects the location of a country's production possibilities curve? A devastating earthquake destroys numerous production facilities:

Curve shifts inward The curve should shift inward with the destruction of resources (capital).

How (if at all) do each of the following events affects the location of a country's production possibilities curve? The quality of education increases

Curve shifts outward Assuming better education translates into better work skills, then productivity should rise, and this would shift the curve outward.

How (if at all) do each of the following events affects the location of a country's production possibilities curve? A new technique improves the efficiency of extracting copper from are:

Curve shifts outward The curve should shift outward as more production is possible with existing resources.

The marginal benefit curve is sloping.

downward

The social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity

Economics

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

Fewer

How (if at all) do each of the following events affects the location of a country's production possibilities curve? The number of unemployed workers increases:

No change This should not affect the location of the curve. Production moves inward and away from the curve.

The next-best thing that must be forgone in order to produce one more unit of a given product:

Opportunity cost

Which of the following represents a normative economic statement? Higher taxes will lower spending. The government ought to lower taxes so people have more money. The unemployment rate is higher than it was last year. The government will have a larger deficit if unemployment benefits are extended.

The government ought to lower taxes so people have more money.

Which of the following represents a positive economic statement? The unemployment rate is 4.8 percent. Taxes should not be increased since that will lower spending. The unemployment rate is too high. The government should extend unemployment benefits.

The unemployment rate is 4.8 percent

The pleasure, happiness, or satisfaction obtained from consuming a good or service

Utility

Because economic resources are used to produce goods and services, they are called

factors of production or inputs

Suppose a city block was going to be used for a parking lot in both New York City and a small town. The opportunity cost would be greater in New York City because the alternative uses of the block are more valuable. greater in a small city because the alternative uses of the city block are more valuable. lower in New York City because the alternative uses of the city block are more varied. lower in a small city because the alternative uses of the city block are more varied

greater in New York City because the alternative uses of the block are more valuable.

Economists classify resources as labor, resources, real capital, and entrepreneurs. labor, land, human capital, and entrepreneurs. labor, land, real capital, and entrepreneurs. labor, land, financial capital, and entrepreneurs

labor, land, real capital, and entrepreneurs

Economic resources are the natural, technological, and manufactured inputs used to produce goods and services. natural, human, and manufactured inputs used to produce goods and services. technological, human, and manufactured inputs used to produce goods and services. natural, human, and technological inputs used to produce goods and services.

natural, human, and manufactured inputs used to produce goods and services.

A student will decide to attend class when

the marginal benefit of attending exceeds the marginal cost of attending

The marginal cost curve is sloping.

upward

In a market system, the allocation of scarce goods involves the consideration of identifying the possibility of professional advancement. the time required to pursue an economic activity. the dollar cost of any good or service. what must be sacrificed in using a resource for its next-best use

what must be sacrificed in using a resource for its next-best use