Micro Exam 1
Suppose that tacos and pizza are substitutes, and that soda and pizza are complements. We would expect an increase in the price of pizza to - Decrease the demand for both soda and tacos. - Increase the demand for both soda and tacos. - Increase the demand for tacos and decrease the demand for sod - Decrease the demand for tacos and increase the demand for sod
Increase the demand for tacos and decrease the demand for sod
Which of the following statements is true? A) Individuals who have never been the best at doing anything must have an absolute advantage in at least ones task. B) Individuals who have never been the best at doing anything perform all tasks at a higher opportunity cost than others. C) Individuals who have never been the best at doing anything cannot have a comparative advantage in producing any product. D) Individuals who have never been the best at doing anything can still have a comparative advantage in producing some product.
Individuals who have never been the best at doing anything can still have a comparative advantage in producing some product.
How are the fundamental economic decisions determined in Canada? A)These decisions are made by the country's elders who have had much experience in answering these questions. B) The government decides because Canada is a centrally planned economy. C) The United Nations decides because Canada is a developing economy. D) Individuals, firms, and the government interact in a market to make these economic decisions.
Individuals, firms, and the government interact in a market to make these economic decisions.
What is an economic model? A) It is a detailed version of some aspect of economic life used to analyze an economic issue. B) It is a description of an economic issue based on official government information. C) It is a simplified version of some aspect of economic life used to analyze an economic issue. D) It is a description of an economic issue that includes all possible related information.
It is a simplified version of some aspect of economic life used to analyze an economic issue.
An outward shift of a nation's production possibilities frontier represents A) an impossible situation. B) economic growth. C) rising prices of the two goods on the production possibilities frontier model. D) a situation in which a country produces more of one good and less of another.
economic growth
Tesla Motors manufactures its cars at a plant in Fremont, California. At this plant, Tesla is able to take advantage of the high level of technical training possessed by its American workers, but it also sacrifices the ability to pay lower wages had it chosen to open its plant in a low-wage country such as Mexico, India, or China. In deciding to open the Fremont plant, Tesla A) faced a trade-off between higher cost and less technical skill. B) faced no trade-offs because employing more technically-skilled workers increased efficiency. C) eroded some of its competitiveness in the luxury electric car market because of its increased cost of production. D) adopted a negative technological change because it chose high-skilled workers over low-paid workers.
faced a trade-off between higher cost and less technical skill.
If a commercial dairy farm wants to raise funds to purchase feeding troughs, it does so in the A) dairy products market. B) output market. C) product market. D) factor market.
factor market.
The natural resources used in production are made available in the A) goods and services market. B) factor market. C) product market. D) government market.
factor market.
The development of a new good or a new process for making a good is called A) an innovation. B) an invention. C) a factor of production. D) a service.
an invention.
Which of the following is a factor of production? A) a credit card B) an oven in a bakery C) a share of General Motors' stock D) a $500 Treasury bond
an oven in a bakery
The machines that workers have to work with are considered A) financial capital. B) entrepreneurship. C) physical capital. D) human capital.
physical capital.
Economic models do all of the following except A) make economic ideas explicit and concrete for use by decision makers. B) simplify some aspect of economic life. C) answer economic questions. D) portray reality in all its minute details.
portray reality in all its minute details.
The slope of Supply and Demand are inversely related in regards to _____ and _______. a. price; cost b. cost; quantity c. profit; cost d. price; quantity
price; quantity
When you purchase a new pair of jeans you do so in the A) factor market. B) product market. C) resource market. D) input market.
product market.
The attainable production points on a production possibilities frontier are A) the points along and inside the production possibility frontier. B) the horizontal and vertical intercepts. C) the points outside the area enclosed by the production possibilities frontier. D) the points along the production possibilities frontier.
the points along and inside the production possibility frontier.
The income effect of a price change refers to the impact of a change in A) the quantity demanded when income changes. B) income on the price of a good. C) the price of a good on a consumer's purchasing power. D) demand when income changes.
the price of a good on a consumer's purchasing power.
Which of the following is a micro economic statement ? - the price of cell phones declined 2.8% last year - Unemployment was 5.2% of the labor force last year - the real domestic output increased by 1.6% last year - The general price lever increased by 1.1 percent last year
the price of cell phones declined 2.8% last year
Technology is defined as A) the process of developing and revising models. B) the processes used to produce goods and services. C) new innovations and creations. D) the process of recycling products.
the processes used to produce goods and services.
Who receives the most of what is produced in a market economy? A) everyone receives an equal amount B) those who are most willing and able to buy them C) people who earn the highest incomes D) lawmakers and other politically favored groups
those who are most willing and able to buy them
The points outside the production possibilities frontier are A) attainable. B) unattainable. C) efficient. D) inefficient.
unattainable
Adam Smith's behavioral assumption about humans was that people A) usually act in a rational, self-interested way. B) typically act randomly. C) are consistently greedy. D) typically act irrationally.
usually act in a rational, self-interested way.
In economics, the pleasure, happiness, or satisfaction received from a product is called a. Fulfillment. b. Utility c. Outcome d. Cost
utility
Which of the following is not a factor of production? A) $1,000 in cash B) a drill press in a machine shop C) the manager of the local tire shop D) an acre of farmland
$1,000 in cash
Pierre can produce either a combination of 20 bow ties and 30 neckties or a combination of 35 bow ties and 15 neckties. If he now produces 35 bow ties and 15 neckties, what is the opportunity cost of producing an additional 15 neckties? A) 2 bow ties B) 15 bow ties C) 20 bow ties D) 35 bow ties
15 bow ties
Bella can produce either a combination of 60 silk roses and 80 silk leaves or a combination of 70 silk roses and 55 silk leaves. If she now produces 60 silk roses and 80 silk leaves, what is the opportunity cost of producing an additional 10 silk roses? A) 2.5 silk leaves B) 10 silk leaves C) 25 silk leaves D) 55 silk leaves
25 silk leaves
An Inquiry into the Nature and Causes of the Wealth of Nations" published in 1776 was written by A) Karl Marx. B) John Maynard Keynes. C) Alfred Marshall. D) Adam Smith.
Adam Smith.
In economics, an organization that produces a good or service is called a A) firm. B) company. C) business. D) All of these are correct.
All of these are correct.
What is the difference between an "increase in demand" and an "increase in quantity demanded"? A) An "increase in demand" is represented by a movement along a given demand curve, while an "increase in quantity demanded" is represented by a rightward shift of the demand curve. B) There is no difference between the two terms; they both refer to a shift of the demand curve. C) There is no difference between the two terms; they both refer to a movement downward along a given demand curve. D) An "increase in demand" is represented by a rightward shift of the demand curve while an "increase in quantity demanded" is represented by a movement along a given demand curve.
An "increase in demand" is represented by a rightward shift of the demand curve while an "increase in quantity demanded" is represented by a movement along a given demand curve.
Which of the following statements about an entrepreneur is false? A) An entrepreneur develops the vision for the firm and funds the producing unit. B) An entrepreneur risks the personal funds provided. C) An entrepreneur organizes the other factors of production into a working unit. D) An entrepreneur sells his entrepreneurial services in the output market.
An entrepreneur sells his entrepreneurial services in the output market.
Which of the following statements is correct? - A decrease in income will decrease the demand for an inferior good. - An increase in income will reduce the demand for a normal good. - An increase in the price of C will decrease the demand for complementary product D. - A decline in the price of X will increase the demand for substitute product Y.
An increase in the price of C will decrease the demand for complementary product D.
Professor Bloodworth decreased his consumption of grape jelly when the price of peanut butter increased. For Professor Bloodworth, peanut butter and grape jelly are - Substitutes - Inferior goods - Complements - Luxury goods
Complements
Because successive units of a good produce less and less additional satisfaction, the price must fall to encourage a buyer to purchase more units of the good. This statement is most consistent with which explanation for the law of demand? - The income effect - Diminishing marginal utility - The substitution effect - The rationing function of prices
Diminishing marginal utility
Which of the following statements about economic resources is true? A) Economic resources are also called factors of production. B) All economic resources are man-made. C) Economic resources include financial capital and money. D) Economic resources are used only by businesses.
Economic resources are also called factors of production.
________ occurs when economic benefits are distributed fairly. A) Equality B) Allocative efficiency C) Productive efficiency D) Equity
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? A) He should rewire the machine, complete the task and then sell the machine. B) He should have never purchased the machine because he has already spent too much time on it and has not been paid for that time. C) It does not matter what he does; he is going to take a loss on his project. D) He should sell the machine now to make the most profit.
He should sell the machine now to make the most profit.
the simple circular flow model shows that - Households are on the buying side of both product and resource markets. - Businesses are on the selling side of both product and resource markets. - Businesses are on the buying side of the product market and on the selling side of the resource market. - Households are on the selling side of the resource market and on the buying side of the product market.
Households are on the selling side of the resource market and on the buying side of the product market.
For each pound of salami that Hungary produces, it gives up the opportunity to make 10 bottles of beer. Slovakia gives up the opportunity to produce of 1 pound of salami for every 8 bottles of beer it produces. Which of the following is true about the comparative advantage between the two countries? A) Hungary has the comparative advantage in beer. B) Slovakia has the comparative advantage in salami and beer. C) Slovakia has the comparative advantage in beer. D) Hungary has the comparative advantage in salami.
Hungary has the comparative advantage in beer.
For each bottle of wine that Italy produces, it gives up the opportunity to make 10 pounds of cheese. France gives up the opportunity to produce of 1 bottle of wine for every 25 pounds of cheese it produces. Which of the following is true about the comparative advantage between the two countries? A) France has the comparative advantage in wine and cheese. B) Italy has the comparative advantage in wine. C) Italy has the comparative advantage in cheese. D) France has the comparative advantage in wine.
Italy has the comparative advantage in wine.
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 - Normative economics - Opportunity costs - Marginal benefits that exceed marginal costs - Imperfect information
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? A) Optimal decisions are made at the margin. B) The market system relies on the principle of voluntary exchange. C) People are rational. D) People respond to economic incentives.
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? A) Optimal decisions are made at the margin. B) People respond to economic incentives. C) The market system relies on the principle of voluntary exchange. D) People are rational.
People respond to economic incentives.
The law of demand states that, other things equal - Price and quantity demanded are inversely relate - Price and quantity demanded are directly relate - The larger the number of buyers in a market, the lower the product price will be - Consumers will buy more of a product at high prices than at low prices.
Price and quantity demanded are inversely relate
Which of the following statements is true about profit? A) Profit refers to the revenue received from the sale of a quantity of goods. B) The terms "accounting profit" and "economic profit" can be used interchangeably. C) Profit is the difference between revenue and cost. D) Profit is calculated by multiplying price and quantity sol
Profit is the difference between revenue and cost.
Which of the following is a fundamental characteristic of the market system? - Property rights - Unselfish behavior - Central planning by the government - Government set wages and prices
Property rights
Which of the following statements is true about revenue? A) A firm's revenue will increase as its costs increase. B) Revenue is the total amount received for selling a good or service. C) The terms "revenue" and "profit" can be used interchangeably. D) Revenue is calculated by dividing the price per unit by the number of units sold.
Revenue is the total amount received for selling a good or service.
For each watch that Switzerland produces, it gives up the opportunity to make 50 pounds of chocolate. Germany can produce 1 watch for every 100 pounds of chocolate it produces. Which of the following is true about the comparative advantage between the two countries? A) Germany has the comparative advantage in watches. B) Switzerland has the comparative advantage in watches. C) Germany has the comparative advantage in watches and chocolate. D) Switzerland has the comparative advantage in chocolate.
Switzerland has the comparative advantage in watches.
The Internet has created a new category in the book selling market, namely, the "barely used" book. How does the availability of barely used books affect the market for new books? A) The demand curve for new books shifts to the left. B) The supply curve for new books shifts to the right. C) The demand curve for new books shifts to the right. D) The supply curve for new books shifts to the left.
The demand curve for new books shifts to the left.
Which of the following has occurred as the millennial generation has come of age? A) The demand for "fast casual" food has decreased in the U.S. market. B) The demand for golf equipment has decreased in the U.S. market. C) The demand for traditional fast food has increased in the U.S. market. D) All of these
The demand for golf equipment has decreased in the U.S. market.
The production possibilities frontier model assumes which of the following? A) The economy produces only two products. B) The level of technology is variable. C) Labor, capital, land, and natural resources are unlimited in quantity. D) Production of any level of the two products that the economy produces is currently possible.
The economy produces only two products.
Which of the following is a normative economic statement? A) When the price of gasoline rises, transportation costs rise. B) The current high price of gasoline is the result of strong worldwide demand. C) The price of gasoline is too high. D) When the price of gasoline rises, the quantity of gasoline purchased falls.
The price of gasoline is too high.
Competition means that - There is more than one seller in a market. - A product can be purchased at a number of different prices. - Sellers can manipulate market price by causing product scarcities. - There are independently acting buyers and sellers in each market.
There are independently acting buyers and sellers in each market.
Which of the following statements about positive economic analysis is false? A) Unlike normative economic analysis, positive economic analysis can be tested. B) Positive analysis uses an economic model to estimate the costs and benefits of different course of actions. C) There is much more disagreement among economists over positive economic analysis than over normative economic analysis. D) There is much more disagreement among economists over normative economic analysis than over positive economic analysis.
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? A) They assume that individuals act rationally all the time in all circumstances. B) They assume that individuals act randomly. C) They assume that people take into account the question of fairness in all decisions they make. D) They assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time.
They assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time.
Which of the following is a macroeconomic question? A) What determines the production of DVDs? B) What determines the inflation rate? C) What factors determine the price of carrots? D) What determines the wage of auto workers?
What determines the inflation rate?
Which of the following is a microeconomic question? A) How much will be saved and how much will be produced in the entire economy? B) What determines the average price level and inflation? C) What will the level of economic growth be in the entire economy? D) What factors determine the price of carrots?
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? A) Yes, but it is efficient only from the perspective of the seller and not from the perspective of the buyer. B) No, people should never be allowed to sell items they received for free. C) Yes, it was a voluntary exchange that benefited both parties. D) No, the buyer paid too much for the ticket.
Yes, it was a voluntary exchange that benefited both parties.
If, in response to an increase in the price of chocolate the quantity of chocolate demanded decreases, then economists would describe this as A) a decrease in demand. B) a decrease in quantity demanded. C) a decrease in consumers' taste for chocolate. D) a change in consumer income.
a decrease in quantity demanded.
If the price of beef jerky rises, then the substitution effect due to the price change will cause A) a decrease in the quantity of beef jerky demanded. B) an increase in the demand for beef jerky. C) an increase in the quantity of beef jerky demanded. D) an increase in the demand for hot sauce, a complement for beef jerky.
a decrease in the quantity of beef jerky demanded.
The term "market" in economics refers to A) a group of buyers and sellers of a product and the arrangement by which they come together to trade. B) a place where money changes hands. C) an organization which sells goods and services. D) a legal institution where exchange can take place.
a group of buyers and sellers of a product and the arrangement by which they come together to trade.
An inward shift of a nation's production possibilities frontier can occur due to A) a natural disaster like a hurricane or bad earthquake. B) a change in the amounts of one good desired. C) an increase in the labor force. D) a reduction in unemployment.
a natural disaster like a hurricane or bad earthquake.
An example of a factor of production for Dell is A) the computers exported by Dell. B) a worker hired by Dell. C) stock issued by Dell. D) corporate bonds sold by Dell.
a worker hired by Dell.
Comparative advantage means the ability to produce a good or service A) at a lower opportunity cost than any other producer. B) of a higher quality than any other producer. C) at a lower selling price than any other producer. D) at a higher profit level than any other producer.
at a lower opportunity cost than any other producer.
You have an absolute advantage whenever you A) prefer to do one particular activity. B) are better educated than someone else. C) can produce something at a lower opportunity cost than others. D) can produce more of something than others with the same resources.
can produce more of something than others with the same resources.
Individuals who have never been the best at doing anything A) perform all tasks at a higher opportunity cost than others. B) must have an absolute advantage in at least ones task. C) can still have a comparative advantage in producing some product. D) cannot have a comparative advantage in producing any product.
can still have a comparative advantage in producing some product.
Economics is the study of the ________ people make to attain their goals, given their ________ resources. A) decisions; household B) purchases; unlimited C) income; available D) choices; scarce
choices; scarce
The ________ demonstrates the roles played by households and firms in the market system. A) theory of comparative advantage B) circular flow model C) business cycle D) production possibilities frontier
circular flow model
Specializing in the production of a good or service in which one has a comparative advantage enables a country to do which of the following? A) produce a combination of goods that lies outside its own production possibilities frontier B) consume a combination of goods that lies outside its own production possibilities frontier C) increase the variety of products that it can produce with a decrease in resources D) never have to engage in trade with other nations
consume a combination of goods that lies outside its own production possibilities frontier
A(n) ________ is represented by a leftward shift of the demand curve while a(n) ________ is represented by a movement along a given demand curve. A) decrease in quantity demanded; decrease in demand B) increase in demand; decrease in quantity demanded C) decrease in demand; increase in quantity demanded D) decrease in demand; increase in demand
decrease in demand; increase in quantity demanded
The law of demand implies, holding everything else constant, that as the price of gelato A) increases, the quantity of gelato demanded will increase. B) increases, the demand for gelato will increase. C) decreases, the demand for gelato will increase. D) decreases, the quantity of gelato demanded will increase.
decreases, the quantity of gelato demanded will increase.
If a demand curve shifts to the right, then A) demand has decreased. B) quantity demanded has increased. C) quantity demanded has decreased. D) demand has increased.
demand has increased.
Economists spend much of their time A) arguing that optimal decisions are rarely made at the margin. B) using normative analysis to develop economic models. C) describing how choices are made and analyzing the results of those choices. D) telling businesses what goods and services to produce and how to produce them.
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? a. rental payments on IBM equipment. b. transportation costs paid to a nearby trucking firm. c. forgone rental income from building owned by Company X, that is vacant d. payments for raw materials purchased from Company Y.
forgone rental income from building owned by Company X, that is vacant
All centrally planned economies A) have become mixed economies. B) started out as market economies. C) have been political dictatorships. D) began as mixed economies.
have been political dictatorships.
Microeconomics is the study of A) topics such as unemployment, inflation, and economic growth. B) the global economy. C) the economy as a whole. D) how households and firms make choices.
how households and firms make choices.
In economics, the accumulated skills and training that workers have is known as A) physical capital. B) entrepreneurship. C) human capital. D) innovation.
human capital.
The production possibilities frontier model shows that A) economic growth can only be achieved by free market economies. B) a market economy is more efficient in producing goods and services than is a centrally planned economy. C) if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good. D) if consumers decide to buy more of a product, its price will increase.
if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.
If the amount of carbonated sodas consumed continues to decline as consumers continue to choose to buy healthier products, this will likely A) increase the demand for premium water, because premium water and carbonated sodas are considered substitutes. B) decrease the demand for premium water, because premium water is considered a normal good and carbonated sodas are considered inferior goods. C) increase the demand for premium water, because premium water and carbonated sodas are considered complements. D) decrease the demand for premium water, because premium water is considered an inferior good and carbonated sodas are considered normal goods.
increase the demand for premium water, because premium water and carbonated sodas are considered substitutes.
As women's wages have risen relative to men's wages, the opportunity cost to women of doing housework has ________ than has the opportunity cost to men. A) increased less B) decreased more C) increased more D) decreased less
increased more
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. A) not changed. B) increased. C) fallen to zero. D) decrease
increased.
As job opportunities for women and the wages those jobs pay have increased, the opportunity cost of doing housework has ________, so many families have chosen to hire specialists in households chores, such as cleaning services and lawn care services, because the cost of these specialists is ________ than the cost of the wife (or husband) performing those chores. A) increased; lower B) decreased; lower C) increased; higher D) decreased; higher
increased; lower
In a production possibilities frontier, a point ________ the frontier is productively inefficient. A) inside B) along C) at either intercept of D) outside
inside
The resource income earned by those who supply ________ is called wages. A) capital B) natural resources C) labor D) entrepreneurship
labor
If the production possibilities frontier is ________, then opportunity costs are constant as more of one good is produced. A) linear B) non-linear C) bowed in D) bowed out
linear
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? A) gross earnings B) benefit C) pure profit D) marginal costs E) marginal revenue
marginal revenue
The demand by all the consumers of a given good or service is the ________ for the good or service. A) quantity demanded B) scheduled demand C) market demand D) law of demand
market demand
The production possibilities frontier shows the ________ combinations of two products that can be produced in a particular time period with available resources. A) maximum attainable B) only C) minimum attainable D) equitable
maximum attainable
The primary purpose of ________ is to encourage the expenditure of funds on research and development to create new products. A) centrally planned economies B) government-run health care C) patents and copyrights D) nationalizing oil companies
patents and copyrights
Households ________ final goods and services in the ________ market. A) sell; factor B) sell; product C) purchase; product D) purchase; factor
purchase; product
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 ________. A) reduce; not as highly valued as others B) reduce; valued more than others C) increase; valued more than others D) increase; not as highly valued as others
reduce; not as highly valued as others
In economics, choices must be made because we live in a world of a. Unemployment b. Scarcity c. Greed d. Unlimited Resources
scarcity
Households A) have no involvement in the circular flow in a market economy. B) sell goods in the product market. C) purchase resources in the factor market. D) sell resources in the factor market.
sell resources in the factor market.
If the best lawyer in town is also the best at operating a word processor, then according to the theory of comparative advantage, this person should A) specialize in being a word processor because it is more capital-intensive. B) specialize in being a lawyer because its opportunity cost is lower. C) should pursue the activity she enjoys more. D) split her time evenly between being a lawyer and a word processor.
specialize in being a lawyer because its opportunity cost is lower.
If the best surgeon in town is also the best at cleaning swimming pools, then according to the theory of comparative advantage, this person should A) split his time evenly between being a surgeon and cleaning swimming pools. B) pursue the activity he enjoys more. C) specialize in being a surgeon because its opportunity cost is lower. D) specialize in cleaning swimming pools because it is more labor-intensive.
specialize in being a surgeon because its opportunity cost is lower.
Which of the following is an example of an activity undertaken by an entrepreneur? A) starting your own pet sitting business B) running for the president of the United States C) washing and ironing your own shirts instead of taking them to the cleaners D) holding a position as the president of a liberal arts college
starting your own pet sitting business
Scarcity A) can be overcome by discovering new resources. B) can be eliminated by rationing products. C) stems from the incompatibility between limited resources and unlimited wants. D) is a bigger problem in market economies than in socialist economies.
stems from the incompatibility between limited resources and unlimited wants.
Households ________ factors of production and ________ goods and services. A) supply; demand B) demand; supply C) demand; demand D) supply; supply
supply; demand
The concept of opportunity cost is that A) taking advantage of investment opportunities involves costs. B) in a market economy, taking advantage of profitable opportunities involves some money cost. C) the cost of production varies depending on the opportunity for technological application. D) the economic cost of using a factor of production is the alternative use of that factor that is given up.
the economic cost of using a factor of production is the alternative use of that factor that is given up.
Macroeconomics is mostly focused on a. The economy as a whole. b. Why specific businesses fail. c. Only the largest industries in the economy. d. The individual markets within an economy.
the economy as a whole
Macroeconomics is the study of A) how households and firms make choices. B) how households make choices. C) the economy as a whole. D) how firms make choices.
the economy as a whole.
Who, in a centrally planned economy, decides what goods and services will be produced with the scarce resources available in that economy? A) the government B) producers C) consumers and producers D) consumers E) the government, consumers, and producers
the government