Micro ch 1

In economics, an organization that produces a good or service is called a

All of these are correct.

Which of the following statements about economic resources is true?

Economic resources are also called factors of production.

________ occurs when economic benefits are distributed fairly.

Equity

Pookie's Pinball Palace restores old Pinball machines. Pookie has just spent $300 purchasing and cleaning a 1960s-era machine which he expects to sell for $2,000 once he is finished with the restoration. After having spent $300, Pookie discovers that he will need to rewire the entire machine at a cost of $1,100 in order to finish the restoration. Alternatively, he can sell the machine "as is" now for $1,000. What should he do?

He should sell the machine now to make the most profit.

How are the fundamental economic decisions determined in Canada?

Individuals, firms, and the government interact in a market to make these economic decisions.

What is an economic model?

It is a simplified version of some aspect of economic life used to analyze an economic issue.

Joe sold gold coins for $1,000 that he bought a year ago for $1,000. He says, at least I didn't lose any money on my financial investment. His economist friend points out that in effect he did lose money because he could have received a 3 percent return on the $1,000 if he had bought a bank certificate of deposit instead of the coins. The economist's analysis in this case incorporates the idea of

Opportunity costs

One reason some manufacturing companies have moved production from overseas locations back to the United States is rising foreign labor costs. Assuming that managers at these companies used all available information, including the rising cost of foreign labor, when making the decision to move production back to the United States exemplifies which key economic idea?

People are rational.

One reason some manufacturing companies have moved production from overseas locations back to the United States is an increasing preference by U.S. consumers for products made in the United States. If buyers have increased their preference for domestically produced goods and manufacturers believe they can increase revenues by supplying more of these goods, firms are following which key economic idea when they return production to the United States?

People respond to economic incentives.

Which of the following statements is true about profit?

Profit is the difference between revenue and cost.

Which of the following statements is true about revenue?

Revenue is the total amount received for selling a good or service.

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

Scarcity

Macroeconomics is mostly focused on

The economy as a whole.

Which of the following is a normative economic statement?

The price of gasoline is too high.

Which of the following is a microeconomic statement?

The price of smartphones declined 2.8 percent last year.

Economic models do all of the following except

There is much more disagreement among economists over positive economic analysis than over normative economic analysis.

Which of the following statements about positive economic analysis is false?

There is much more disagreement among economists over positive economic analysis than over normative economic analysis.

Which of the following best describes an assumption economists make about human behavior?

They assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time.

In economics, the pleasure, happiness, or satisfaction received from a product is called

Utility

Which of the following is a macroeconomic question?

What determines the inflation rate?

Which of the following is a microeconomic question?

What factors determine the price of carrots?

The town of Harmonia gives away all 500 tickets to its annual Founder's Day Free Concert-in-the-Park to local residents. Each year, more than 500 people wish to attend the concert, so some of the residents who receive the free tickets sell them for as much as $75 each. Is a transaction where someone pays a resident $75 for a "free ticket" economically efficient?

Yes, it was a voluntary exchange that benefited both parties.

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.

The development of a new good or a new process for making a good is called

an invention.

Economics is the study of the ________ people make to attain their goals, given their ________ resources.

choices; scarce

Economists spend much of their time

describing how choices are made and analyzing the results of those choices.

Which of the following is most likely to be an implicit cost for Company X?

forgone rent from building owned and used by Company X.

All centrally planned economies

have been political dictatorships.

Microeconomics is the study of

how households and firms make choices.

In economics, the accumulated skills and training that workers have is known as

human capital.

Billie's Billiard Barn has seen its business slow down ever since Patti's Ping Pong Parlour opened up across the street. Since the opening of Patti's Ping Pong Parlour, the opportunity cost of shooting pool at Billie's Billiard Barn has ________ for Billie's customers who also like to play ping pong.

increased.

An office supply store sells a ream of printer paper at a fixed price of $4.50. Which of the following is a term used by economists to describe the money received from the sale of an additional ream of paper?

marginal revenue

The machines that workers have to work with are considered

physical capital.

The slope of Supply and Demand are inversely related in regards to _____ and _______.

price; quantity

It is necessary for all economic systems to provide people with goods and services and also restrict them from getting as much of these goods and services as they wish, because failure to do this could ________ the efficiency of the system by producing some goods and services that are ________.

reduce; not as highly valued as others

Which of the following is an example of an activity undertaken by an entrepreneur?

starting your own pet sitting business

Households ________ factors of production and ________ goods and services.

supply; demand

Macroeconomics is the study of

the economy as a whole.

Consider the following economic agents: a. the government b. consumers c. producers

the government

Technology is defined as

the processes used to produce goods and services.

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

those who are most willing and able to buy them