Econ 4 Micro: Economic Thinking

The circular flow diagram demonstrates A trade-off that scarcity imposes Mathematical Equations A direct relationship between groups in an economy

A direct relationship between groups in an economy

Functions are often described as cause and effect in economics. In an economics function, if the variable is on the right-hand side and is doing the explaining, it represents a(n)________? Cause Effect Result

Cause

What is one way to express economic theory? Mathematical Equations Macroeconomic Data Data Analysis

Mathematical Equations

Once a model of reality is constructed around certain assumptions, it can be tested to determine its value in Producing Data Predicting outcomes Graphing Equations

Predicting outcomes

What can be assumed if a model can accurately predict outcomes? The model is not based on a theory The assumptions of the model are generally accurate The theory behind the model needs to be refined

The assumptions of the model are generally accurate

Identify the macroeconomic issue among the following statements. Our family business costs will rise due to higher electric rates. The electric bill is higher this month. The average cost of producing electricity nationally is rising.

The average cost of producing electricity nationally is rising.

For an economist or mathematician, a variable is The name given to a quantity that can assume a range of values The part for the equation that is a verbal description of the problem a part of the equation the remains constant and does not vary

The name given to a quantity that can assume a range of values

Identify the microeconomic topic(s) among the following The price that a farmer asks for her watermelons. The unemployment rate. Fiscal policy.

The price that a farmer asks for her watermelons.

Land, or natural resources, include(s) the fertility of the land, minerals below it, and________? Wind and sun Human Resources Human Capital Resources

Wind and sun

Because of our limited money, time, and effort, we are best off when we allocate those things With the objective of maximizing output by constantly assessing the opportunity costs of our choices by choosing what society as a whole would want

by constantly assessing the opportunity costs of our choices

Due to limits on our time, money, and effort, we are best off when we allocate those things... by constantly assessing the opportunity costs of our choices. according to what society as a whole would want. with the objective of maximizing profit.

by constantly assessing the opportunity costs of our choices.

In order to calculate an economic equation to understand its economic implications, what must one remember to do? Start with the last variable of the equations follow the correct order of operations multiply and divide from right to left

follow the correct order of operations

If a data line on a graph has a slope of zero it means there are two variables that are negatively related is a constant relationship between x and y is no relationship between x and y

is a constant relationship between x and y

Natural resources, or land, can include the fertility of the land, minerals below it, and what other aspects? human capital resources human resources livestock

livestock

In a world of scarcity, we will never... meet all of society's wants. satisfy all basic human needs. use all economic resources such that we satisfy the maximum amount of wants.

meet all of society's wants.

Economic capital is productive, so it does not include______? buildings & equipment tools money

money

Financial capital, like money, is simply a tool. Once financial capital is converted to economic capital (invested), it produces a resource that is productive. expensive. profitable.

productive.

If a data line on a graph slopes upward as it goes to the right, it is depicting that the relationship between the variables on the axes is direct as the value of one variable falls, the value of the other rises ( all else constant) the relationship between the variables on the axes is inverse

the relationship between the variables on the axes is direct

As life would have it, we all come to forks in our paths when we need to make a choice, knowing that... the opportunity cost of one's decision should be maximized. the correct choice depends upon the opportunity cost of a choice. the impacts of our choices can always be quantified in dollars.

the correct choice depends upon the opportunity cost of a choice.

In the case of an negative relationship between two variables, all else remaining constant The values of the two variables will move in the same direction graphically, the date line representing the relationship between the variables has a positive slope the value of the two variables will move in opposite direction from each other

the value of the two variables will move in opposite direction from each other

The advantages that society gains through trade lie in the ability to refine tasks associated with production. attain absolute advantage in our trade with other nations. -NO specialize resources to the uses where opportunity cost is maximized.

refine tasks associated with production.

A common economic model that reveals a relationship between two types of groups interacting in marketing in an economy is called the supply & demand framework. the production possibilities graph. the circular flows diagram.

the circular flows diagram.

In the case of an negative relationship between two variables, all else remaining constant Graphically, the date line representing the relationship between the variables has a positive slope the values of the two variables will move in the same direction the values of the two variables will move in the opposite directions from each other

the values of the two variables will move in the opposite directions from each other

In the case of a positive relationship between two variables, all else remaining constant: The value of the two variables will move in opposite directions from each other the values of the two variables will move in the same direction graphically the date line representing the relationship between the variables is a horizontal line

the values of the two variables will move in the same direction