Chapters 1 & 2

In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of:

buyers and sellers.

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 nations desire a healthy macroeconomy, they typically focus on three goals, one of these being:

low inflation

As depicted in _________________________________, it is necessary to give up some of one good to gain more of the other good.

the production possibilities frontier

Macroeconomic topics do not usually include:

the profit maximizing decisions of an individual manufacturer.

In countries like _____________ the command economy predominates.

Cuba and North Korea

_____________ - a term referring to the fact that for many goods, as the level of production increases, the average cost of producing each individual unit declines.

Economies of scale

Which of the following would most likely shift the production possibilities curve inward?

a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time

In the ______________, households receive goods and services and pay firms for them.

goods and services market

Because of their relatively small national economies, which of the following is most likely considered to be the most important factor for Belgium, Korea, and Canada to take full advantage of specialization?

international trade