Microeconomics Chapter 1 and 2

Which statement best describes a command economy?

The production and allocation of goods and services is determined primarily through government

In a competitive economy, prices:

Answer: do all of these. influence consumers in their purchases of goods and services. influence workers in making occupational choices. influence businesses in their purchases of economic resources.

The influential book written by Adam Smith was:

The Wealth of Nations.

Which is not one of the Four Fundamental Questions?

What goods and services should be produced by government?

A person should consume more of something when its marginal:

benefit exceeds its marginal cost

On a production possibilities curve, the single optimal or best combination of output for any society:

depends upon the preferences of society

Which is an illustration of a microeconomic question?

Will a new type of television set increase the number of buyers?

A schedule or curve that shows the various combinations of two products a consumer can purchase with a specific amount of money income is:

a budget line

The problems of aggregate inflation and unemployment are:

major topics of macroeconomics

The idea that firms and resource suppliers in seeking to further their own self-interests in a competitive market economy also simultaneously promote the public or social interest is a description of:

the "invisible hand."