Chapter 1 homework (part 1) Economics

​Trade-offs force society to make​ choices, particularly when answering the following three fundamental​ questions: A. One, what goods and services will be​ produced? Two, how will the goods and services be​ produced? Three, is the distribution of goods and services​ fair? B. One, what goods and services will be​ produced? Two, how will the goods and services be​ produced? Three, who will receive the goods and services​ produced? C. ​One, what goods and services will be produced in foreign​ countries? Two, who will produce the goods and​ services? Three, who will receive the goods and services​ produced? D. ​One, what goods and services will be produced​ domestically? Two, how will the goods and services be​ produced? Three, is the distribution of goods and services​ fair?

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

A market is a group of ________________ of a good or service and the institution or arrangement by which they come together to trade. A. Buyers B. Buyers and sellers C. Sellers

B. Buyers and sellers

In the United​ States, who receives the goods and services produced depends largely on Anwser Choices: A. how much income is created B. how income is distributed C. who is the president

B. How income is distributed

Which of the following covers the study of topics such as inflation or​ unemployment? A.Microeconomics B. Macroeconomics C. Both microeconomics and macroeconomics give equal emphasis to these problems. D. None of the above.

B. Macroeconomics

Any model is based on making assumptions because A. we cannot analyze an economic issue unless we reduce its complexity. B. models have to be simplified to be useful. C.both a and b. D. neither a nor b.

C. both a and b.

A hypothesis in an economic model is A. a statement that may be either correct or incorrect about an economic variable. B. usually about a causal relationship. C. tested before it can be accepted​ (or not​ rejected). D. all of the above.

D. all of the above.

Microeconomics is the study of A. firms as individual units excluding how these firms interact with one another. B. ​"small" (less than​ $100,000) economic transactions in the economy. C. the economy as a​ whole, including topics such as​ inflation, unemployment, and economic growth. D. how households and firms make​ choices, how they interact in​ markets, and how the government attempts to influence their choices.

D. how households and firms make​ choices, how they interact in​ markets, and how the government attempts to influence their choices.

When the federal government crafts environmental policies that make it less expensive for firms to follow green​ initiatives, A.pollution is likely to increase. B.the policies are futile because where the environment is​ concerned, it has been repeatedly shown that firms do not respond to economic incentives. C.the policies are likely to be more successful than policies that cost firms​ more, but they do not recognize economic incentives. D.the policies are consistent with economic incentives.

D. the policies are consistent with economic incentives.

Economics is a social science because A. it applies the scientific method to the study of the interactions among individuals. B. it considers human behaviorlong dash—particularly ​decision-making behavior. C. it is based on studying the actions of individuals. D. all of the above.

D. All of the above

______________ is the study of the choices people make to attain their​ goals, given their scarce resources.

Economics

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. Answers choices: Centrally planned, Market, Mixed

Mixed

(1) In your economics​ class, you scored a 6262 on the first​ quiz, a 9494 on the second​ quiz, and an 6565 on the third quiz. Your average quiz grade is 73.673.6. ​(Enter your response rounded to one decimal​ place.) (2) On the fourth​ quiz, you scored an 79 Did the fourth quiz raise your​ average?

(1) 73.6 (2) yes

Societies organize their economies in two main ways to answer the three questions of​ what, how, and who. A society can have a (1)_______________economy in which the government decides how economic resources will be allocated. Or a society can have a (2)________________ economy in which the decisions of households and firms interacting in markets allocate economic resources. Answer choices: Centrally planned, Market, Mixed

(1). Centrally planned economy (2). Market

(1) __________________ is concerned with what is​, and (2)__________________ is concerned with what ought to be. Economics is about (3)___________________ , which measures the costs and benefits of different courses of action. Answer Choices : Positive Analysis Neutral Analysis Normative Analysis

(1). Positive Analysis (2.) Normative Analysis (3). Positive Analysis

(1)________________ occurs when a good or service is produced at the lowest possible cost. (2) _______________ occurs when production is in accordance with consumer preferences. Answers Choices: Voluntary exchange Productive efficiency Allocative efficiency

(1). Productive efficiency (2). Allocative efficiency

Microsoft charges a price of​ $599 for a copy of Windows 7. Is this pricing decision​ rational? A.When we assume the managers at Microsoft have used all available information and have weighed all known benefits and​ costs, we are assuming rationality. B.​Microsoft's choice was​ rational: the price will maximize profit. C.​Microsoft's choice cannot be​ rational: the price is clearly more than most people are willing and able to pay. D.We cannot assume that this pricing decision was rational because we do not have enough information to make an assumption.

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

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when A.marginal benefit equals marginal cost. B.marginal cost is zero. C.marginal benefit is greater than marginal cost. D.marginal benefit is maximized.

A. marginal benefit equals marginal cost.

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 A.scarcity. B.economics. C.the market. D.rationality.

A. Scarcity

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, A. a local service station has to choose whether to provide car repair services using more diagnostic computers to support their auto mechanics and fewer tools to support their auto mechanics or more tools to support their auto mechanics and fewer diagnostic computers to support their auto mechanics. B. movie studios have to choose whether to produce animated films using more highly skilled animators to draw them by hand or fewer highly skilled animators and more​ low-skill animators. C. 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. D. many times in the past several​ decades, firms may have chosen between a production method in the United States that uses fewer machines and more workers and a production method in China that uses more machines and fewer workers.

C. 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.

Equity is A.an exactly equal distribution of income. B.when poorer​ people's income is growing more rapidly than more wealthy​ people's income. C.the fair distribution of economic benefits. D.always achieved by the market.

C. the fair distribution of economic benefits.

Opportunity cost is A. when unlimited wants exceed the limited resources available to fulfill those wants. B. when consumers and firms use all available information as they act to achieve their goals. C. the highest valued alternative that must be give up to engage in an activity. D. the idea that because of​ scarcity, producing more of one good or service means producing less of another good or service.

C. the highest valued alternative that must be give up to engage in an activity.

Macroeconomics is A. the study of how households and firms make​ choices, how they interact in​ markets, and how the government attempts to influence their choices. B. the study of​ "large" (greater than​ $100,000) economic transactions in the economy. C. the study of the economy as a​ whole, including topics such as​ inflation, unemployment, and economic growth. D. the study of firms as a group with special emphasis on how these firms interact with one another.

C. the study of the economy as a​ whole, including topics such as​ inflation, unemployment, and economic growth.

When we graph the relationship between two​ variables, we often want to draw conclusions about whether changes in one variable are causing changes in the other variable. Doing​ so, however, can lead to incorrect conclusions. Reasons for drawing incorrect conclusions about cause and effect include A.reverse causality. B.an omitted variable. C.both a and b. D.none of the above

C. both a and b.