Macroeconomics Homework 1

in your economics class, you scored a 68 on the first quiz, an 81 on the second quiz, and a 66 on the third quiz. your average grade is _____. on the fourth quiz, you scored a 77. do your fourth quiz raise your average? _____

71.7; yes

One of the basic facts of life is that people must make choices as they try to attain their goals. The unavoidable fact comes from a reality an economist calls A. economics B. the market C. scarcity D. rationality

C. Scarcity

Microsoft charges a price of $599 for a copy of Windows 7. Is this pricing decision rational? A. Microsoft's choice cannot be rational; the price is clearly more than most people are willing and able to pay B. Microsoft's choice was rational: the price will maximize profit C. when we assume the managers at Microsoft have used all available information and have weighed all known benefits and costs, we are assuming rationality D. we cannot assume that this pricing decision was rational because we do not have enough information to make an assumption

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

Economies is a SOCIAL SCIENC because A. it applies the scientific method to the study of the interactions among individuals B. it considers human behavior-- particularly decision-making behavior C. it is based on studying the actions of individuals D. all of the above

D. all of the above

A _____ econmy is an economy in which most economic decisions result from the interaction of buyers and sellers in makrets but in which he government plays a significant role in the allocation of resources

Mixed

__________ is concerned with WHAT IS, and __________ is concerned with WHAT OUGHT TO BE. Economies is about __________, which measures the costs and benefits of different courses of action

Positive anaylsis; normative analysis; positive analysis

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

buyers and sellers

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

consumers, firms, and government

In the United States, who receives the goods adn services produced depends largely on __________

how income is distributed

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

A. the highest valued alternative that must be given up to engage in an activity

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when A. marginal benefit is maximized B. marginal benefit equals marginal cost C. marginal cost is zero D. marginal benefit is greater than marginal cost

B. marginal benefit equals marginal cost

Equity is A. always achieved by the market B. the fair distribution of economic benefits C. an exactly equal distribution of income D. when poorer people's income is growing more rapidly than more wealthy people's income

B. the fair distribution of economic benefits

When the federal government crafts environmental policies that make it less expensive for firms to follow green initiatives A. the policies are likely to be more successful than policies that cost firms more, but they do not recognize economic incentives B. the policies are consistent with economic incentives C. pollution is likely to increase D. the policies are futile because where the environment is concerned, it has been repeatedly shown that firms do not respond to economic incentives

B. the policies are consistent with economic incentives

Macroeconomics is A. the study of "large" economic transactions in the economy B. the study of the economy as a whole, including topics such as inflation, unemployment, and economic growth C. the study of firms as a group with special emphasis on how these firms interact with one another D. the study of how households and firms make choices, how they interact in makrets, and how the government attempts to influence their choices

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

Trade-offs force society to make choices, particularly when answering the following three fundamental questions: A. one, what goods and services will be produced domestically? two, how will the goods adn services be produced? three, is the distribution of goods adn services fair? B. one, what goods and services will be produced in foreign countries? two, who will produce the goods and services? three, who will receive the goods and services produced? C. One, what goods and services will b prduced? two, how will the goods and services be produced? three, who will receive the goods and services produced D. One, what goods and srvices will be produced? two,how will the goods and services be produced? three, is the distribution of goods and services fair?

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

Microeconomics is the study of A. firmst as individual units excluding how these firms interact with one another B. the economy as a whole, including topics such as inflation, unemployment, and economic growth C. how household and firms make choices, how they interact in markets, and how the geovernment attempts to influence their choices D. "small" economic transactions in the economy

C. how household and firms make choices, how they interact in markets, and how the government attempts to influence their choices

_____ is the study of the choices people make to attain their goals, given their scarce resources

Economics

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

centrally planned; market