Chapter 1 Homework

Points lying ____ the production possibilities curve are attainable, reflecting less total output than can be produced.

Inside

A nation's production possibilities curve can shift ____ with an increase in the quality and quantity of resources:

Outward

A decrease in income will shift the budget line to the ____.

Left

Combinations of output that fall inside the production possibilities curve represent ____ total output in an economy.

Less

Everyone, even the very wealthy, has a ____ amount of income.

Limited

Which of the following results from having scarce economic resources? The production of ____ goods and services.

Limited

Consumers must forego choice based on a limited budget because consumers spend their ____ budget purchasing a combination of goods that ____ their utility.

Limited Maximize

____ is the discipline that examines either the economy as whole or its aggregates.

Macroeconomics

The economic term that means incremental changes or additional changes is ____.

Marginal

In macroeconomics, an ____ is a collection of specific economic units treated as if they were one unit.

Aggregate

Combinations of goods that fall on the production possibilities curve utilize ____ of an economy's resources:

All

Combinations of goods that fall on the production possibilities curve are ____

Attainable

Combinations of output that fall inside the production possibilities curve have goods that are ____.

Attainable

Economics assumes that human behavior reflects "____ self-interest."

Rational

Combinations of goods that are beyond the production possibilities curve are currently ____.

Unattainable

Individuals' economic decisions are purposeful or rational because they weigh ____ and ____.

Benefits Costs

Suppose you are given a $100 gift card and you choose to spend it on a number of goods. You will select a combination of goods that is best for you and that maximize your satisfaction. In other words, your choices will account for the effects of marginal ____ and marginal ____ of each goods considered.

Benefits Costs

Which of the following combinations are unattainable given a consumer's budget line? Combinations that fall ____ the budget line.

Beyond

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

Budget

Factories, storage, transportation and distribution facilities, as well as tools and machinery are all examples of physical ____ goods.

Capital

The four general categories of economic resources are ____, ____ resources, entrepreneurship, and_____

Capital Natural Labor

Consider the relationship between the price of gas and the quantity of gas consumed by drivers. If we are to consider the price of gas as the only factor affecting the quantity of gas consumed, while holding other factors such as drivers' incomes and tastes and preferences irrelevant, then we are invoking ____ ____

Ceteris paribus

The concept or term that refers to the notion that all variables except those under immediate consideration are held constant for a particular analysis is known as:

Ceteris paribus

Capital goods differ from consumer goods in that consumer goods satisfy wants ____

Directly

An ____ in income shifts a consumer's budget line to the right.

Increase

Specializing and participating in international trade allows an economy to ____ the quantities of capital and consumer goods available to society.

Increase

Economic growth is the result of ____ in the supply of resources.

Increases

Capital goods differ from consumer goods in that capital goods satisfy consumer wants ____ through the production of consumer goods

Indirectly

____ is the discipline of economics concerned with individual units such as households, firms, and government.

Microeconomics

Advances in production technology enable a society to produce ____ goods with current or less ____:

More Resources

Economists do not include money as an economic resource because money produces ____:

Nothing

____ economic analysis concerns what is, whereas ____ economic analysis embodies subjective feelings about what ought to be.

Positive Normative

Suppose an economy produces only two goods, consumer goods and capital goods. Its current combination of production involves a higher level of capital goods than consumer goods. Which of the following can be inferred from this current choice on its production possibilities curve? That its ____ choice in production may result in ____ future prospects for economic growth.

Present Higher

In economics, investment describes spending that pays for the ____ and ____ of capital goods:

Production Accumulation

What does each point on the production possibilities curve represent? Efficiency in ____ and the maximum ____ of two products.

Production Output

A ____ ____ curve "implies" the attainable combination of many goods that can be produced given a specific set of resources:

Production possibilities

When individuals make decisions with some desired outcome in mind, they are engaging in:

Purposeful behavior

Combinations of goods that are beyond the production possibilities curve would require ____ that are not currently available.

Resources

In a world of ____, the decision to obtain the marginal benefit associated with some specific option always includes the marginal cost of forgoing something else.

Scarcity

Like the physical and life sciences, as well as other social sciences, economics relies on the ____ method.

Scientific

Consumers derive personal satisfaction from acting in a ____ ____ manner.

Self-interested

The need to make choices because economic wants exceed economic mean, most likely describes:

The economizing problem

An economy can produce either guns or butter with all available resources. Suppose it currently produces all butter and it chooses to produce some guns, thereby giving up some production of butter. As a result, the first 200 units of guns are produced at the cost of only 50 units of butter. Not surprisingly, the next 200 units of guns are produced at the cost of 150 units of butter and the last 200 units of guns at the cost of 300 units of butter. What does this describe?

The law of increasing opportunity costs

Which of the following illustrates that at any point in time, a fully employed economy must sacrifice some amount of one good to obtain more of another good?

A production possibilities table

Who takes the risk of earning profits or suffering losses from owning an enterprise? Who makes strategic business decisions that set the course of an enterprise? Who innovates?

An entrepreneur

The straight-line budget constraint indicates ____ opportunity cost.

Constant

Economic principles are generalizations expressed as the tendencies of typical or average ____, workers, or business ____:

Consumers Firms

Normative, value-based policy questions or statements give rise to ____ among economists.

Controversy

Marginal analysis involves the comparison or evaluation of the additional ____ versus the additional ____ of a decision.

Cost Benefit

Jill is unemployed and decides to spend the day at the spa. Jill's opportunity cost of spending a day at the spa is equal to the ____ spa rate, any other ____ expenses, and the value of the best ____ activity in which Jill could be engaged.

Daily Monetary Alternative

Combinations of goods that are beyond the production possibilities curve require ____ ____.

Economic growth

The net result of increased quantities of the factors of production is ____ ____

Economic growth

A statement about economic behavior or the economy that enables prediction of the probable effects of certain actions is known as an:

Economic principle

Combinations of goods that fall on the production possibilities curve are ____ produced.

Efficiently

Natural resources, labor, human capital, physical capital, and entrepreneurship are all scarce economic resources privately or collectively owned by members of society. Where these scarce resources are used to produce goods or services, there is no ____ ____.

Free lunch

The economizing problem refers to the need to make choices because economic wants are ____ than economic means.

Greater

The ability to produce more of both consumer goods is the net result of economic ____ and ____ supplied of the factors of production.

Growth Increased

Economic growth is the result of ____ in resource quality.

Improvements

An increase in ____ will shift the budget line to the right.

Income

Combinations of output that fall inside the production possibilities curve have ____ use of resources.

Inefficient

The importance of the production possibilities model is that it shows the different combinations of goods and services that society can produce efficiently, ____, in a fully employed economy, and given a fixed amount of ____.

Inefficiently Resources

In addition to entrepreneurship, the resource of ____ consists of the physical actions and mental activities that people contribute to the production of goods and services.

Labor

Which of the following includes all natural resources used in the production of goods and services?

Land

Why is it in our self-interest to economize or pick and choose goods and services that maximize our satisfaction? Because of our ____ incomes conflicting with our insatiable wants for goods and services.

Limited

Consumers derive personal satisfaction from goods and services by allocating their time, energy, money, and other resources so as to ____ their satisfaction from consuming these goods:

Maximize

Which of the following combinations are attainable given a consumer's budget line? Combinations on the ____ of the budget line, ____ on the budget line, fall ____ the budget line, and a combination that involves the entire consumption of one good and ____ consumption of the other goods.

Midpoint Fall Inside Zero

Due to scarce resources, every individual, whether rich or poor, is faced with an ____ cost when choosing to produce or consume more of one good over another.

Opportunity

Society's economizing problem involves ____ cost, making choices in the face of ____, and ____ resources.

Opportunity Scarcity Scarce

Trade-offs arising from limited resources give rise to:

Opportunity costs

Specializing and participating in international trade allows an economy to circumvent the ____ limits imposed by its own production possibilities curve.

Output

Each point on the production possibilities curve represent some ____ ____ of two products.

Output combination

A nation's production possibilities curve can shift ____ as a result of specialization and trade:

Outward

A nation's production possibilities curve can shift ____ through the use of improved production techniques:

Outward

____ economics focuses on facts and cause-and-effect relationships.

Positive

Because consumers behave in a rationally self-interested manner, the consumer will ____ a good or service when the ____ ____ is greater than or equal to the ____ ____:

Purchase Marginal benefit Marginal cost

In comparing marginal benefits versus marginal costs of a decision, we can assume that a decision maker is making choices ____.

Purposefully

Arable land, water, machinery, and a professional baseball player are all considered scare economic ____ to production.

Resources

As individuals' incomes ____, they will still be confronted with choice, ____ ____, and trade-offs.

Rises Opportunity cost

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

Rises Rises

All natural, human, and manufactured goods that go into the production of goods and services are considered society's ____ economic resources.

Scarce

The concept that "there is no free lunch" reflects the notion that ____ resources are used to produce so-called "free goods" that have alternative uses that are given up in order to produce said "free" goods.

Scarce

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

Scarce economic resources

Economic growth is the result of ____ advances.

Technological

The situation where one thing has to be given up in order to have some other item is called a ____ ____

Trade-off

Which of the following are economic measures considered in macroeconomics? The ____ rate, national ____, the level of ____ in the economy, and ____ trade.

Unemployment Income Prices International

For better or worse, people have virtually ____ wants.

Unlimited

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

Unlimited

The pleasure, satisfaction, or happiness obtained from consuming a good or service is known as ____.

Utility