Econ Lesson 1

Equity means that goods are distributed in a way that...

is fair

Scarcity is central to the study of economics because it implies that A. every choice involves an opportunity cost. B. wants are unlimited. C. economic agents are rational. D. society must make decisions at the margin.

a

What type of economic analysis is concerned with the way things ought to​ be? A. Normative Analysis B. Marginal Analysis C. Rational Behavior D. Positive Analysis

a

Which of the following best describes​ scarcity? A. Unlimited wants exceed the limited resources available. B. Prices of goods are very high. C. Markets cannot properly allocate resources. D. Wants cannot be fulfilled and thus all goods must be rationed.

a

Which of the following statements is​ correct? A. Economists use the terms​ firm, company, and business interchangeably. B. A business has multiple​ locations, while a company has only a single location. C. A business is always larger than a firm. D. A company is owned by one​ person, while a firm is owned by more than one person.

a

Economic data is used A. to take the place of an economic model. B. to test models. C. only if all relevant data is available. D. to prove that a model is true.

b

Economics assumes people and​ firms: A. use all available information to achieve their goals, respond to​ incentives, and make decisions by comparing total benefits with total costs. B. are rational​, respond to​ incentives, and make decisions by comparing marginal benefits with marginal costs. C. use all available information to achieve their​ goals, respond to​ incentives, and make decisions by continuing any activity up to the point where the marginal benefit equals zero. D. are​ rational, respond to​ incentives, and make​ all-or-nothing decisions. E. always make the best decisions, respond to​ incentives, and make decisions by comparing marginal benefits with marginal costs.

b

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 A. economics. B. scarcity. C. rationality. D. the market.

b

According to the required article from www.vox.com​ titled, ​Study: schools that give away condoms see more teen​ births, not​ fewer, what percent of regular condom users become pregnant within a year due to​ misuse? A. 1% B. 8% C. 18% D. ​32%

c

An optimal decision occurs when A. marginal benefit is greater than marginal cost. B. marginal benefit is maximized. C. marginal benefit equals marginal cost. D. marginal cost is zero.

c

Economists assume that people are rational in the sense that A. they do not respond to economic incentives. B. they make decisions based on​ total, rather than​ marginal, variables. C. they use all available information as they take actions intended to achieve their goals. D. they generally make the correct choices.

c

Opportunity cost is A. when unlimited wants exceed the limited resources available to fulfill those wants. B. the idea that because of​ scarcity, producing more of one good or service means producing less of another good or service. C. the highest valued alternative that must be give up to engage in an activity. D. when consumers and firms use all available information as they act to achieve their goals.

c

Productive efficiency means that A. every good or service is produced up to the point where marginal benefit is equal to marginal cost. B. every good or service is distributed fairly. C. a good or service is produced at the lowest possible cost. D. a good or service is produced as quickly as possible.

c

Allocative efficiency means that A. a good or service is produced as quickly as possible. B. a good or service is produced at the lowest possible cost. C. every good or service is distributed fairly. D. every good or service is produced up to the point where marginal benefit is equal to marginal cost.

d

Economists use models A. to describe the real world exactly. B. to disprove economic data. C. to prove that theories are true. D. to answer questions and analyze issues.

d

Which of the following is a positive economic​ statement? A. The government should close income tax loopholes. B. Everyone should live at the same standard of living. C. U.S. firms should not be allowed to outsource production of goods and services. D. If the price of gasoline​ rises, a smaller quantity of it will be bought.

d

Which of the following statements about a hypothesis is​ correct? A. A hypothesis will always incorporate a value judgment. B. A hypothesis is another name for a model. C. To be called a​ hypothesis, a statement must first be shown to be correct. D. A hypothesis is a statement that could in principle turn out to be incorrect.

d

Which of the following statements is​ correct? A. The word​ "technology" and the word​ "innovation" have the same meaning. B. An invention is the practical application of an innovation. C. The word​ "technology" and the word​ "invention" have the same meaning. D. An innovation is the practical application of an invention.

d

Why are models based on​ assumptions? A. Because models are very different from theories. B. Because models are only concerned about questions of​ equity, not question of efficiency. C. Because models are not intended to analyze​ real-world events. D. Because models have to be simplified to be useful.

d

​Lionel's Lawn Care is a company that maintains residential yards.​ Lionel's cost for his standard package of​ mowing, edging, and trimming is​ $15, and he charges​ $25 for this service. For a total price of​ $40, Lionel will also trim​ shrubs, a service that adds an additional​ $10 to the total cost of the standard package. What is​ Lionel's marginal benefit if he sells the standard​ package? A. $10 B. ​$15 C. $40 D. $25

d

Efficiency means that goods are distributed in a way that...

maximizes benefits to society