Chapter 1 economics

An example of a normative statement is:

A high rate of economic growth is good for the country.

Individuals will usually make choices to minimize the value of some objective.

False

The existence of alternative uses for a resource implies it isn't scarce.

False

In the 1930s, the federal government established the social security system to provide a minimum level of income to elderly and disabled people. This primarily addressed the economic question of:

For whom shall the goods be produced?

According to the text, which of the following is true?

Scientists can show that a hypothesis is false.

A good is scarce if we must sacrifice something to obtain it.

True

Anything that has alternative uses has an opportunity cost and is, therefore, scarce.

True

Economists pay special attention to making choices at the margin.

True

Economic models are:

built using assumptions.

The study of how people choose among the alternatives available to them is the:

definition of economics.

In economics, the function of theories, laws, and hypotheses is to:

discover relationships between events that are important to economic behavior.

The models used in economics:

emphasize basic relationships by abstracting from complexities in the everyday world.

A(n) _______ does not pose the problem of scarcity; one use of the good is not an alternative to another use.

free good

Economics, generally speaking, is primarily concerned with:

how people choose among the alternatives available to them.

A tradeoff between two economic goals means that:

if you achieve more of one, you will achieve less of the other.

Microeconomics deals with:

individual units in the economy.

Unemployment and inflation are:

major topics in macroeconomics.

The economic way of thinking has to do with:

making choices at the margin.

Economists are:

not always in agreement on the best way to implement policy decisions.

The sacrifice of an alternative is called:

opportunity cost.

Economics is different from other social sciences because it gives special emphasis to the study of ______; it is similar to other social sciences because they are all concerned with the study of _______.

opportunity costs; choices

Statements that are a hypothesis or statement of fact are:

positive.

The problem of determining what goods and services society should produce exists because:

resources are scarce.

When we are forced to make choices we are facing the concept of:

scarcity.

Economics is a:

social science that deals with making choices among alternatives.

Macroeconomics deals with:

the analysis of the aggregate values in the economy.

Opportunity cost is:

the highest valued other choice that could have been made.

The opportunity cost of something is:

what is given up to acquire it.

The fundamental economic questions that every economic system must answer are:

what, how, and for whom.