Economics Chapter 1

individual units in the economy.

Microeconomics deals with:

normative considerations.

Most economists' disagreements are a result of:

constant.

Something whose value does not change is a:

what, how, and for whom.

The fundamental economic questions that every economic system must answer are:

aggregates in the economy.

The primary emphasis in macroeconomics is on:

exists because there are not enough resources to provide all the goods and services that people want to purchase.

The problem of determining what goods and services society should produce:

major topics in macroeconomics.

Unemployment and inflation are:

scarcity.

When we are forced to make choices we are facing the concept of:

the opportunity cost of that choice is the highest-valued other choice that could have been made.

Whenever a choice is made:

1) assigning opportunity costs a major role in their analyses of choices. 2) assuming individuals make choices to maximize objectives. 3) emphasizing that choices are made at the margin.

A feature that distinguishes economists' approach to making choices is (are):

a good with no opportunity cost.

A free good is:

has alternative uses.

A scarce resource is one that:

if you achieve more of one, you will achieve less of the other.

A tradeoff between two economic goals means that:

free good

A(n) _______ does not pose the problem of scarcity; one use of the good is not an alternative to another use.

Scientists can show that a hypothesis is false.

According to the text, which of the following is true?

it has two or more alternative uses.

Although water is very abundant in most places, it is scarce because:

who gets the goods and services produced.

An answer to the question "For whom" determines:

how resources are combined in the production of goods.

An answer to the question "How are goods produced?" determines:

social science concerned chiefly with how people choose among alternatives.

Economics is a:

statements that can be tested.

Positive statements are:

a choice must be made among two or more alternatives.

Scarcity exists when:

the kinds and quantities of goods and services produced.

The answer to, "What goods are to be produced ?" deals with:

study the choices people make.

The basic concern of economics is to:

microeconomics.

The branch of economics that examines the choices of consumers and firms is:

is positive.

The current rate of unemployment is 5 percent. This statement:

normative

The current rate of unemployment of 5 percent is too high. This is a _______ statement.

making choices at the margin.

The economic way of thinking has to do with:

1) attention paid to the opportunity costs involved in any choice. - or - 2) attention paid to the opportunity costs involved in any choice.

The economic way of thinking includes:

the assumption that individuals choose to maximize some objective.

The economic way of thinking includes:

opportunity cost.

The sacrifice of an alternative is called:

1) controlled laboratory conditions are more problematic in economics. 2) it is difficult to hold other factors that may affect the variables being studied constant in economics. 3) economic conditions may change quickly and unexpectedly.

The scientific method is more difficult for economists than, say, chemists, because: