Micro Quiz 1

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

a. the cost of haircuts received during the school term

As depicted in ___________, it is necessary to give up some of one good to gain more of the other good. a. the production possibilities frontier b. allocative efficiency c. scarcity d. utility

a. the production possibilities frontier

Macroeconomics topics do not usually include: a. the profit maximizing decisions of an individual manufacturer b. the rate of inflation c. the rate of unemployment d. economic growth

a. the profit maximizing decisions of an individual manufacturer

Exports are goods and services that are produced domestically and sold in another country. a. true b. false

a. true

Model is a simplified representation of an object or situation that includes enough of the key features to be useful a. true b. false

a. true

The term market describes an institution that brings together buyers and sellers of goods or services a. true b. false

a. true

What term is used to describe the branch of economics that focuses on the economy as a whole, including issues like growth, unemployment, inflation, and balance of trade? a. Command economy b. Macroeconomics c. Labor markets d. Financial capital markets

b. Macroeconomics

In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of: a. all consumers b. buyers and sellers c. producers and input suppliers d. producers and government planning committees

b. buyers and sellers

Specialization a. leads to greater self-sufficiency b. can lead to an increase in overall production c. allows workers to develop skills by working on a large number of tasks d. is always the result of an inefficient use of resources

b. can lead to an increase in overall production

Scarcity implies that: a. consumers would be willing to purchase the same quality of a good at a higher price b. it is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available c. at the current market price, consumers are willing to purchase more of a good than suppliers ware willing to produce d. consumers are too poor to afford the goods and services available

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

no society can produce everything it wants due to which of the following reasons? a. inefficient production b. scarcity c. cost

b. scarcity

What name is given to dividing the work required to produce a good or service into tasks performed by different workers? a. Division of financial capital b. Globalization c. Division of labor d. Microeconomics

c. Division of labor

What is meant by normative statements? a. Whatever must be given up to obtain something that is desired b. Statements that describe the world as it is c. Statements that describe how the world should be d. Statements that describe the costs that were incurred in the past and cannot be recovered, and thus should not affect current decisions

c. Statements that describe how the world should be

the basic difference between macroeconomics and microeconomics is: a. a microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade b. microeconomics concentrates on the behavior of individual consumers while macroeconomics focuses on the behavior firms. c. microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy d. microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment

c. microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy

the opportunity cost of an action: a. can be determined by considering both the benefits that flow from as well as the monetary costs incurred as a result of the action b. can be determined by adding up the bills incurred as a result of the action c. can be objectively determined only by economists d. is a subjective valuation that can be determined only by the individual who chooses the action

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

scarcity exists because of: a. the market mechanism b. specialization and division of labor c. the allocation of goods by prices d. unlimited wants and limited resources

d. unlimited wants and limited resources