Economics 102 Ch 1 and 2
Specialization:
can lead to an increase in overall production.
Economics addresses such issues as
how goods will be produced. what goods to produce. who will get the goods that are produced. All the above are correct.
The defining difference between macroeconomics and microeconomics is that
macroeconomics focuses on economic aggregates, and microeconomics focuses on individual choices.
The marginal benefit of a slice of pizza is the:
maximum amount that a consumer is willing to pay for the slice.
The basic difference between macroeconomics and microeconomics is:
microeconomics concentrates on the behaviour of individual consumers and firms while macroeconomics focuses on the performance of the entire economy
If you wait in line one hour to buy a concert ticket for $30, the opportunity cost of that ticket is
the best alternative to both the $30 and the one hour.
In a circular flow diagram, the two loops are
the flow of goods, services, and factors loop and the flow of dollars loop.
The production function mathematically expresses the relationship between
the quantity of output from production and the quantity of inputs used in production.
Economists prefer elasticities for all of the following reasons except that
they are based on total changes in units.
Economists use economic models
to understand how the real world works.
Apply the Rule of 70 to the following question. If you invest $10,000 at 5% interest, how long will it take for your money to double?
14 years
Which of the following activities is associated with macroeconomics?
An investigation into the relationship between price level and unemployment since World War II
Refer to Figure 2-1. 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:
C (on the curve) to F (inside the curve exactly to the left of C)
Which of the following is the least serious problem for laissez-faire economies?
Consumer sovereignty
In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________, which means the way in which the work required to produce a good or service is divided into a number of tasks that are performed by different workers.
Division of labor
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
Increasing productivity allows firms to pay higher wages without causing inflationary concerns.
True
Positive statements are evaluated on the basis of evidence while normative statements are evaluated on the basis of an individual's judgment.
True
When a demand curve shifts, the slope of the curve remains the same.
True
The general pattern that consumption of the first few units of any good tends to bring a higher level of _______ to a person than consumption of later units is a common pattern.
Utility
The circular flow diagram of economic activity is a model of the:
flow of goods, services, and payments between households and firms.
The term compounding refers to
the accumulation of a growth rate over a period of time.
Which of the following best denotes the reason for the existence of substantial black markets?
A command economy
Which of the following is a correct statement?
Economics laws are important because they allow us to predict and possibly control economic events.
The ratio of an economy's production of goods and services to capital goods measures that economy's productivity.
False
Economics is mainly concerned with the study of
Scarcity
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
One of the characteristics of a planned economy is
extensive government control of the market.
All of the following will increase productivity except
decreasing wages
Scarcity
requires people to make choices.