Chapter 1 Macro

924.5 as an integer

924,500

Mixed economy

An economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources.

Market economy

An economy in which the decisions of households and firms interacting in markets allocate economic resources.

Centrally planned economy

An economy in which the government decides how economic resources will be allocated.

__________________​decide(s) what goods and services will be produced.

Consumers, firms, and government ​Consumers, firms, and the government face the problem of scarcity by trading off one good or service for another. Each choice made comes with an opportunity cost measured by the value of the best alternative given up.

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when

How do you find area of a triangle for a demand curve

For the diagram​ below, because the curve is a demand​ curve, the area of the triangle is a specific dollar amount. The area of the triangle represents ​$924 comma 500924,500. We can calculate the area of the triangle by multiplying the base ​(6565 minus− 2222 long dash— in​ 1,000s of​ units) and height ​($6868minus−​$2525​) and then divide by 2. homework chapter 1 question 24

Tangible products like cars and televisions are referred to as __________.

Goods

In the United​ States, who receives the goods and services produced depends largely on ______

How income is distributed In the United​ States, who receives the goods and services produced depends largely on how income is distributed. Individuals with the highest income have the ability to buy the most goods and services.

Which of the following is a positive economic statement?

If minimum wage rates rise, then unemployment will rise.

What is the name given to the development of a new good?

Invention

Which of the following covers the study of topics such as inflation or​ unemployment?

Macroeconomics

Firms choose how to produce the goods and services they sell. In many​ cases, firms face a​ trade-off between using more workers or using more machines. For​ example,

Many times in the past several decades, firms may have chosen between a production method in the United States that uses fewer workers and more machines and a production method in China that uses more workers and fewer machines.

Trade-offs force society to make choices, particularly when answering the following three fundamental questions:

One, what goods and services will be produced? Two, how will the goods and services be produces? Three, who will receive the goods and services produces?

Jim declined to take part in a health study on a free basis but changed his mind after being offered $1,000 to participate in the study. Jim's behavior best illustrates which economic principle?

People respond to economic incentives.

One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls

Scarcity

Which of the following is not a possible opportunity cost of attending college?

The cost of housing

Equity

The fair distribution of economic benefits.

Economics

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

Societies organize their economies in two main ways to answer the three questions of​ what, how, and who. A society can have a____________________ economy which the government decides how economic resources will be allocated. Or a society can have a___________________ economy in which the decisions of households and firms interacting in markets allocate economic resources.

centrally planned, market

Macroeconomics can be used to understand all of the topics listed below, except:

how a consumer decides between the purchase of two different cars

Economists believe that an individual or firm should continue any activity until:

marginal benefit is equal to marginal cost.

The resources provided by nature and used to produce goods and services are also known as:

natural resources

Macroeconomics is concerned with all of the following except:

political party affiliation

Economics is the study of choice under conditions of:

scarcity

The principle of opportunity cost evolves from the concept of:

scarcity

When the federal government crafts environmental policies that make it less expensive for firms to follow green​ initiatives,

the policies are consistent with economic incentives.

A___________________economy is an economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources.

Mixed

The United States economy is best classified as a:

Mixed economy

One of the first steps in deciding whether to complete your education is to:

evaluate the marginal cost and marginal benefit of that decision.

How do you find Total Revenue

quantity multiplied by price

When we graph the relationship between two​ variables, we often want to draw conclusions about whether changes in one variable are causing changes in the other variable. Doing​ so, however, can lead to incorrect conclusions. Reasons for drawing incorrect conclusions about cause and effect include

reverse causality, an omitted variable.

When you think of an arrangement or institution that brings buyers and sellers of a good or service together, what are you thinking of?

A market

Opportunity cost is

The highest value alternative that must be given up to engage in an activity. The opportunity cost of any activity, such as producing a good or service, is the​ highest-valued alternative that must be given up to engage in that activity.

Microsoft charges a price of​ $599 for a copy of Windows 7. Is this pricing decision​ rational?

When we assume the managers at Microsoft have used all available information and weighed all known benefits and costs, we are assuming rationality.

The stock of computers, factory buildings and machine tools used to produce goods is known as:

physical capital

Macroeconomics is

the study of the economy as a​ whole, including topics such as​ inflation, unemployment, and economic growth.

Economics is a social science because A. it applies the scientific method to the study of the interactions among individuals. B. it considers human behaviorlong dash—particularly ​decision-making behavior. C. it is based on studying the actions of individuals. D. all of the above.

D. all of the above. Economics is a social science because it applies the scientific method to the study of the interactions among individuals. Because economics is based on studying the actions of​ individuals, it is a social science. As a social​ science, economics considers human behaviorlong dash—particularly ​decision-making behaviorlong dash—in every​ context, not just in the context of business.

According to the rationality assumption, people:

Do not intentionally make decisions that would leave them worse off.

Economic decisions are made at every level in society. When we try to decide which production method to use among several alternatives, which of the following key economic questions are we trying to answer?

How do we produce the products?

________________ analysis is concerned with what is​, and ______________ analysis is concerned with what ought to be. Economics is about _________________ analysis, which measures the costs and benefits of different courses of action.

Positive, normative, positive Positive analysis is concerned with what is​, and normative analysis is concerned with what ought to be. Economics is about positive​ analysis, which measures the costs and benefits of different courses of action.

___________________efficiency occurs when a good or service is produced at the lowest possible cost. _____________________efficiency occurs when production is in accordance with consumer preferences.

Productive: The situation in which a good or service is produced at the lowest possible cost. Allocative:A state of the economy in which production is in accordance with consumer​ preferences; in​ particular, every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it.

Microeconomics is

The study of how households and firms make​ choices, how they interact in​ markets, and how the government attempts to influence their choices.

Economics:

is concerned with how people respond to incentives

A market is a group of _______and______of a good or service and the institution of arrangement by which they come together to trade

Buyers and sellers

__________ goods and services are those bought by businesses to be used to increase efficiency or enhance production.

Capital

Which of the following countries has an economy where most of the resource allocation is determined by a central planning authority?

North Korea

In what type of economy does the government decide how economic resources will be allocated?

a centrally planned economy

A hypothesis in an economic model is A. tested before it can be accepted​ (or not​ rejected). B. a statement that may be either correct or incorrect about an economic variable. C. usually about a causal relationship. D. all of the above.

D. all of the above. A hypothesis in an economic model is a statement that may be either correct or incorrect about an economic variable. An economic variable is something measurable that can have different values. An economic hypothesis is usually about a causal relationship. Before accepting a​ hypothesis, we must test it.

Any model is based on making assumptions because

we cannot analyze an economic issue unless we reduce its complexity and models have to be simplified to be useful. Economic models make behavioral assumptions about the motives of consumers and firms. Economists assume that consumers will buy the goods and services that will maximize their​ well-being or their satisfaction.​ Similarly, economists assume that firms act to maximize their profits. These assumptions are simplifications because they do not describe the motives of every consumer and every firm.