Quiz 2/3

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

All points on the production possibilities frontier are equally efficient

Marginal thinking is best demonstrated by

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

When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right

Costs of production fall

Refer to Figure 3-2. A change from Point A to Point B represents a(n):

Decrease in quantity demanded.

The ___________ is the only price where quantity demanded is equal to quantity supplied

Equilibrium price

Refer to Figure 3-3. A change from Point A to Point D represents a(n):

Increase in supply

The opportunity cost of an action

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

Refer to Figure 2-2. At Point A in the production possibilities graph shown above, the economy:

Is not using its resources efficiently

Scarcity implies that:

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

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

Marginal utility

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

Normative statement

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

Positive statements

The downward slope of the demand curve again illustrates the pattern that as _____________ rises, _________________ decreases

Price, quantity demanded

A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis, and ____________, shown on the horizontal axis.

Quantity

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

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the __________________

Supply curve to the right

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

The cost of haircuts received during the school term

According to the law of supply:

There is a direct relationship between price and the quantity supplied

But nearly all supply curves share a basic similarity: they slope _______________.

Up from left to right

In economics, the demand for a good refers to the amount of the good that people:

Will buy at various prices.