Fall '20 Econ

in the textbook, opportunity cost includes...

both explicit costs and implicit costs

low density tends to _______ specialization

limit

t/f: a persons comparative advantage can never change

FALSE

a formula is a mathematical expression that describes the relationship between two or more variables

False

If it takes a person less time to perform a task than anyone else, then that person has a _____ advantage in performing that task.

absolute

economists view scarcity as

an unavoidable fact of life

When assessing the costs and benefits associated with taking an action, it is generally best to consider costs and benefits

as absolute dollar amounts rather than proportions

a production possibilities curve that becomes steeper as production of the good on the x-axis increases reflects that principle that _______

as we produce more of something, the opportunity cost of producing that good increases

a bow-shaped production possibility curve that becomes steeper as production of the good on the x-axis increases reflects the fact that _______

as you produce more of the good on the x-axis, the opportunity cost of producing that good increases

any combination of goods that can be produced using currently available resources is known as a(n) _________

attainable

learning more about economic models

can help us make better decisions even if most people don't consciously use economic models to make decisions

the reason why countries trade with one another is that each country can benefit by specializing in the production of the goods and services at which they have a(n) ________

comparative advantage

a quantity that is fixed in value is known as a(n)

constant or a parameter

a(n) _______ variable is a variable in an equation whose value is determined by the value taken by another value in the equation

dependent

_______ is the study of how people make choices under conditions of scarcity and the results of those choices for society as a whole

economics

any combination of goods for which currently available resources do not allow an increase in the production of one good without a reduction in the production of another good is known as a(n) ________ point

efficient

a mathematical expression that describes the relationship between two or more variables is called a(n)

equation

t/f: a country's cultural and institutional characteristics have no impact on a country's comparative advantage

false

the fact that the production possibility curve is downward sloping illustrates the idea that

having more of one thing generally means having less of something else

Microeconomics is the study of

individual choice under scarcity and its implications for behavior of prices and quantities in individual markets

any government policy that makes it either more difficult or more costly for individuals to trade with one another is likely to ________ specialization

limit

the increase in total cost that results from carrying out one additional unit of an activity is its ______ cost

marginal

an economic principle that says how people should behave is known as a

normative economic principle

if a software company located in the united states uses an Indian company to handle customer service calls, this is typically referred to as ______

outsourcing

a new government policy that encourages investment in new factories and equipment is likely to cause an _____ shift in an economy's production possibilities curve

outward

economic growth is represented by an ______ shift in a country's production possibilities curve

outward

in the long run, a government program to subsidize education is likely to lead to an

outward shift in a country's production possibilities curve

An implication of the Scarcity Principle is that

people must make trade-offs

a _______ economic principle is one that predicts how people will behave

positive

a graph that describes the maximum amount of one good that can be produced for every possible level of production of the other good is a _____

production possibilities curve

along a straight line, the ____ is the ratio of the vertical distance the straight line travels between any two points to the corresponding horizontal distance

slope

a(n) ______ cost is a cost that is beyond recovery at the moment a decision is made

sunk

According to the Cost-Benefit Principle, an individual or society should

take an action if, and only if, the extra benefits from taking the action are at least as great as the extra costs

The economic surplus of an action is

the benefit of taking an action minus its cost

opportunity cost is

the value of what must be foregone in order to undertake an activity

in the graph of a straight line, the value taken by the dependent variable when the independent variable is equal to zero is known as the

vertical intercept

a rational person is someone

with well-defined goals who tries to fulfill those goals as best he or she can