Macroeconomics chapter 2

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"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:

marginal utility

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

the production possibilities frontier

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

opportunity cost

Attending college is a case where the ________________ exceeds the monetary cost.

law of 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.

the benefit to his grades from studying for an hour

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

utility

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.

opportunity cost

In many cases, it is reasonable to refer to the ________________ as the price.

choosing to spend one more hour studying economics because you think the improvement in your score on the next quiz will be worth the sacrifice of time.

Marginal thinking is best demonstrated by:

marginal analysis

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

normative statement

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

All points on the production possibilities frontier are equally efficient

Refer to Figure 2-1. Along the production possibilities frontier, the most efficient point of production depicted is:

C to F

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:

7 points on the economics exam

Refer to Table 2-1. A student has only a few hours to prepare for two different exams tomorrow morning. The above table shows alternative possible exam outcomes with three alternative uses of the student's time. The opportunity cost of scoring an 84 on the history exam rather than 76 is:

15 points on the history exam

Referring to Table 2-1: A student has only a few hours to prepare for two different exams this afternoon. The above table shows alternative possible exam scores with three alternative uses of the student's time. The opportunity cost of scoring a 94 on the economics exam rather than a 77 is:

8 points on the history exam.

Referring to Table 2-1: A student has only a few hours to prepare for two different exams this afternoon. The above table shows alternative possible exam scores with two alternative uses of the student's time. The opportunity cost of scoring a 94 on the economics exam rather than a 87 is: Table 2.1 Possibility A Economics History I 94 76 II 87 84

unlimited wants and limited resources.

Scarcity exists because of:

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

Scarcity implies that:

allocative efficiency

The choice on a production possibilities set that is socially preferred, or the choice on an individual's budget constraint that is personally preferred, will display _____________________.

diminishing marginal utility

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

sunk costs

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.

the maximum amount that a consumer is willing to pay for the slice

The marginal benefit of a slice of pizza is the:

budget constraint

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the _________________, sometimes also called the opportunity set, a diagram which shows what choices are possible.

opportunity set

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the budget constraint, sometimes also called the _______________, a diagram which shows what choices are possible.

is a subjective valuation that can be determined only by the individual who chooses the action.

The opportunity cost of an action:

the cost of haircuts received during the school term

The opportunity cost of attending university is likely to include all except which of the following?

budget constraint

The slope of the _________________ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good.

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

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

Because our unlimited wants exceed our limited resources

Why is there scarcity?