Econ Chapter 2

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:

$44

The opportunity cost of attending university is likely to include all except which of the following? A. the cost of required textbooks B. tuition fees C. the cost of haircuts received during the school term D. the income you forgo in order to attend classes

C

Attending college is a case where the ________________ exceeds the monetarycost. A. budget constraint B. marginal analysis C. opportunity cost D. marginal utility

C.

Refer to the figure below. At Point A in the production possibilities graph shown below, the economy: (point a is off the line between the relationship of clothing and food)

Not using resources efficiently

Refer to the figure below. An economy is operating at full employment, and then workers in the bread industry are laid off. This change is portrayed in the movement from:

On the curve, to shifted left off the curve

Scarcity implies that:

it is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available.

Philosophers draw a distinction between positive statements, which describe the world as it is, and ___________________s, which describe how the world should be.

normative statement

Philosophers draw a distinction between ___________________, which describe the world as it is, and normative statements, which describe how the world should be.

positive statements

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is:

the benefit to his grades from studying for an hour

As depicted in _________________________________, it is necessary to give up some of one good to gain more of the other good.

the production possibilities frontier

In deciding how many hours to work, Beulah will make a choice that maximizes her _______; that is, she will choose according to her preferences for leisure time and income.

utility

Why is there scarcity?

Because our unlimited wants exceed our limited resources.

The lesson of __________ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options.

Sunk costs

Most inefficient point in an economy is when

Two items aren't being produced at maximum capacity or on the line between them

Which of the following would most likely shift the production possibilities curve inward?

a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time

The law of ____________________________ explains why people and societies rarely make all-or-nothing choices.

diminishing marginal utility

Economists refer to this pattern, the ___________________________________, which means that as a person receives more of a good, the additional or marginal utility from each additional unit of the good declines.

law of diminishing marginal utility

Most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good.

marginal analysis

Most real-world choices aren't about getting all of one thing or another, instead, most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good.

marginal analysis

As a person receives more of a good, the _______________ from each additional unit of the good declines.

marginal utility