C1 Quiz (C)

Microeconomics is most likely to include the study of

firm interaction.

When federal government crafts environmental policies that make it less expensive for firms to follow green initiatives,

the policies are consistent with economic incentives.

Macroeconomics is most likely to include the study of

unemployment

Economics assumes people and firms

use all available information to achieve their goals, respond to incentives, and make decisions by comparing marginal benefits with marginal costs.

Economics assume people and firms:

Are rational, respond to incentives, and make all-or-nothing decisions.

Firms choose how to produce the goods and services they sell. In many cases, firms face a trade-off between using more workers or using more machines. For example,

Many times in the past several decades, firms may have chosen between a production method in the United States that uses fewer workers and more machines and a production method in China that uses more workers and fewer machines.

A __________ economy is an economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources.

Mixed

Equity is

The fail distribution of economic benefits

Opportunity cost is

The highest value alternative that must be given up to engage in an activity.

In the United States, who receives the goods and services produced depends largely on __________

How income is distributed

Which of the following covers the study of topics such as inflation or unemployment?

Macroeconomics

One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls

Scarcity

Societies organize their economies in two main was to answer the three questions of what, how and who. A society can have a __________ economy in which the government decides how economic resources will be allocated. Or a society can have __________ economy in which the decisions of households and firms interacting in markets allocate economic resources.

Centrally Planned Market

Trade-offs force society to make choices, particularly when answering the following three fundamental questions:

One, what goods and services will be produced? Two, how will the goods and services be produces? Three, who will receive the goods and services produces?

Trade-offs force society to make choices, particularly when answering the question three fundamental questions:

One, what goods and services will be produces? Two, how will the goods and services be produces? Three, who will receive the goods and services produced?

When economists develop models designed to explain the choices people make, they generally assume that

People are rational

_________ occurs when a good or service is produces at the lowest possible cost. __________ occurs when production is in accordance with customer preferences.

Productive efficiency Allocative efficiency

Economic models are:

Simplified versions of reality designed to analyze "what is" to explain human decision making in any context.

Microsoft charges a price of %599 for a copy of Windows 7. Is this pricing decision rational?

When we assume the managers at Microsoft have used all available information and have weighed all known benefits and costs, we are assuming rationality.

What goods and services will be produces, how do the goods and services will be produced, and who will receive the goods and services are determined:

in centrally planned economics by the government in market economics by the decisions of households and firms interacting in markets (Both a and b are true)

Given the changes to Medicare, if the marginal benefit of offering an additional bed is $1,000 and the marginal cost is $9,000 per bed, then the corporation __________________ offer additional beds

should not