Macro Economics Exam Review (CH.1)

model

An economic ________ is a simplified version of some aspect of economic life used to analyze an economic issue. Selected Answer:

3,640

At a recent faculty meeting, Lorraine Waverly, president of Skywalker College, announced that enrollment is up by 12 percent over the previous semester. If enrollment the previous semester was 3,250 students, what is the student enrollment this semester?

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

By definition, economics is the study of

at least $125,000

Carrie quits her $125,000-a-year job to take care of her ailing parents. What is the opportunity cost of her decision?

the government

Consider the following economic agents: a. the government b. consumers c. producers Who, in a centrally planned economy, decides what goods and services will be produced with the scarce resources available in that economy?

rationally

Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave ________, meaning they make the best decisions given their knowledge of the costs and benefits.

are rational and respond to incentives.

Economists assume that individuals

30 percent

If the price of milk was $2.50 a gallon and it is now $3.25 a gallon, what is the percentage change in price?

These incentives will encourage women to have children and increase the birth rate.

In Estonia, the government pays working women who take time off after having a baby their entire salary for up to 15 months, and women who do not work receive $200 per month after having a baby. How will these benefits affect a woman's decision to have children?

scarcity

In economics, choices must be made because we live in a world of

marginal

In economics, the term ________ means "additional" or "extra".

until its marginal benefits equal marginal costs

Marginal analysis involves undertaking an activity

competition and voluntary exchange.

Markets promote

how households and firms make choices.

Microeconomics is the study of

42.9%

Refer to Figure 1-1. Using the information in the figure above, calculate the percentage change in sales of alcoholic beverages between 2006 and 2009.

consumers and firms choosing which goods and services to buy or produce.

The decision about what goods and services will be produced made in a market economy is made by

opportunity cost.

The highest valued alternative that must be given up to engage in an activity is the definition of

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

The three fundamental questions that any economy must address are:

allocative efficiency

When production reflects consumer preferences, ________ occurs.

What determines the inflation rate?

Which of the following is a macroeconomics question?

A straight line has a slope of zero.

Which of the following statements is false?

those who are willing and able to buy them

Who receives the most of what is produced in a market economy?

Productive efficiency

________ is a situation in which a good or service is produced at the lowest possible cost.