economics 2010

All natural resources, human resources, and manufactured goods that go into the production of goods and services are considered as society's scarce resources.

*economic

Which of the following describes a budget line?

A curve showing various combinations of two products a consumer can purchase with a specific amount of income.

Which of the following illustrates that at any point in time, a fully employed economy must sacrifice some amount of one good to obtain more of another good?

A production possibilities table

What does every point on a budget line graph represent?

All combinations of goods that can be purchased with a given income

Which one of the following best characterizes the "other-things-equal" assumption?

All variables except those under immediate consideration are held constant for a particular analysis.

Which of the following are ways of expressing the meaning of ceteris paribus? (Check all that apply.)

Assuming factors other than those being considered in a particular analysis do not change Assuming other things are equal

Which of the following scenarios are illustrated in the given production possibilities curve?

Attainable combinations of both goods below the curve An economy in full employment along the curve

Why is it in our self-interest to economize or pick and choose goods and services that maximize our satisfaction?

Because of our limited incomes conflicting with our insatiable wants for goods and services

In which of the following ways do capital goods differ from consumer goods?

Capital goods satisfy consumer wants indirectly by facilitating the production of consumer goods. Consumer goods satisfy wants directly.

If economists examine the relationship between the price of a good and sales of that good while ignoring other related factors, or assuming those other factors are equal, they are using which of the following?

Ceteris paribus

Which concepts or terms refer to the notion that all variables except those under immediate consideration are held constant for a particular analysis? (Check all that apply.)

Ceteris paribus The other-things-equal assumption

As individuals' incomes rise, they will still be confronted with which of the following?

Choices Trade-offs Opportunity cost

Which of the following combinations are unattainable given a consumer's budget line?

Combinations that fall beyond the budget line

Which of the following combinations are attainable given a consumer's budget line?

Combinations that fall on the budget line Combinations that fall inside the budget line

In which of the following ways do capital goods differ from consumer goods?

Consumer goods satisfy wants directly. Capital goods satisfy consumer wants indirectly by facilitating the production of consumer goods.

______ goods satisfy wants directly, whereas ______ goods do so indirectly.

Consumer; capital

Which of the following are the focus of positive economics?

Facts Cause-and-effect relationships

Which of the following resources would be considered to be land by an economist?

Forests Oil and mineral deposits Arable land Water

comes in the form of wages, interest, rent, profit, and even from government programs.

Income

An entrepreneur does which of the following?

Innovates Takes the risk of commercializing new products Makes strategic business decisions that set the course of an enterprise

Which of the following is true of positive economics?

It avoids value judgments. It tries to establish scientific statements about economic behavior. It focuses on facts and cause-and-effect relationships.

Which of the following is true of positive economics?

It focuses on facts and cause-and-effect relationships. It avoids value judgments. It tries to establish scientific statements about economic behavior.

Which of the following are general categories economists use to classify economic resources?

Land Labor Entrepreneurial ability Capital

What do combinations of output that fall inside the production possibilities curve represent?

Less total output than points on the curve Goods that are attainable

Which discipline studies the economy as a whole or its basic subdivisions or aggregates?

Macroeconomics

Which of the following are issues most explored in microeconomics? (Check all that apply.)

Measuring the price of specific goods Measuring total revenues of a firm The expenditures of a government entity

(Microeconomics/Macroeconomics) is the discipline that examines the performance and behavior of an economy as a whole.

Microeconomics

Which of the following are economic themes considered in macroeconomics?

National income The unemployment rate The level of prices in the economy

______ economics considers the desirability of certain aspects of the economy and underlies expressions of support for particular economic policies.

Normative

Which of the following illustrates the attainable combination of two goods that can be produced given a specific set of resources?

Production possibilities curve

In macroeconomics, an aggregate is a collection of which of the following?

Specific economic units treated as if they were one unit

Which of the following statements or questions are examples of normative economics?

The government ought to bail out distressed banks. The government should increase the minimum wage. What should the minimum wage be?

Which of the following statements or questions are examples of normative economics?

The government should increase the minimum wage. What should the minimum wage be? The government ought to bail out distressed banks.

Which of the following lead to increases in wants over time?

The introduction of new and improved goods A lesser good triggering the desire for a better one

An economy can produce either guns or butter with all available resources. Suppose it currently produces all butter and it chooses to produce some guns, thereby giving up some production of butter. As a result, the first 200 units of guns are produced at the cost of only 50 units of butter. Not surprisingly, the next 200 units of guns are produced at the cost of 150 units of butter and the last 200 units of guns at the cost of 300 units of butter. What does this describe?

The law of increasing opportunity costs.

Which of the following statements or questions exemplify positive economics? (Select all that apply.)

The unemployment rate in Mexico is higher than in the United States. As flight ticket prices fall, airlines experience an increase in revenue. When the government increases the minimum wage, the unemployment rate rises.

Which statements best describe the combinations of goods that lie on the production possibilities curve?

They are attainable. They utilize all of an economy's available resources.

Which statement best describes combinations of goods that are beyond the production possibilities curve?

They are unattainable.

What are the functions of an entrepreneur?

To make strategic business decisions To combine the resources of land, labor and capital to produce a good or service

Why are aggregates used in macroeconomics?

To obtain an overview of the economy

As individuals' incomes rise, they will still be confronted with which of the following?

Trade-offs Opportunity cost Choices

People desire goods and services that provide maximum utility. In fact, our desires or wants are ______.

Unlimited

Consumers must forgo certain goods and services based on a limited budget because ______.

a consumer spends his or her limited budget purchasing a combination of goods and services that maximize his or her satisfaction

When economists consider the output of all U.S. businesses as a single entity, they are treating them as a(n) ______.

aggregate

Points ______ the production possibilities curve represent a maximum output of two products as long as the economy is fully employed.

along

Positive economics ______ value judgments, tries to establish ______ statements about economic behavior, and deals with ______ economic events.

avoids; scientific; actual

Normative economics is ______.

based on value judgments

A consumer's___ line or constraint shows various combinations of two products that can be purchased with a specific amount of income. (Enter one word in the blank.)

budget

Factories, storage, transportation, and machinery are all examples of ______ goods.

capital

For economists, ______ goods include all manufactured aids used in producing consumer goods and services.

capital

The straight-line budget constraint indicates ______ opportunity cost.

constant

Normative, value-based policy questions or statements give rise to ______.

controversy or disagreement among economists

A statement about economic behavior or the economy that enables prediction of the probable effects of certain actions is known as a(n) ______.

economic principle

The __________ problem refers to the need to make choices because economic wants exceed economic means.

economizing

Economic principles are generalizations that are ______.

expressed as the tendencies of average consumers, workers or firms

Taken together, the four general categories of economic resources (land, labor, capital, and entrepreneurial ability) are referred to as which of the following?

factors of prod

True or false: Economists use the terms "capital" and "money" interchangeably.

false

True or false: Everyone except for the super wealthy has a finite, or limited, amount of income.

false

True or false: Positive economics encourages value judgments.

false

Even at higher levels of ______, people will still face spending trade-offs, choices, and opportunity costs.

income

What is the simplified term economists use to refer to "factors of production"?

inputs

A manufacturing firm builds a new warehouse to expand its inventory capacity. Economists refer to this activity as ______.

investment

In economics, the term ______ describes spending that pays for the production and accumulation of capital goods.

investment

The work-related activities of a teacher and doctor fall under the resource category of

labor

What do economists call the physical actions and mental activities that people contribute to the production of goods and services?

labor

From an economic standpoint, ______ includes all natural resources used in the production process.

land

As a result of our ______ incomes and ______ wants, it is in our self-interest to economize or pick and choose goods and services that maximize our satisfaction.

limited; insatiable

Which discipline studies the decision-making process of customers, workers, households, and business firms on an individual basis rather than as aggregates?

microeconomics

Economists do not include money as an economic resource because ______.

money produces nothing

______ economics considers the desirability of certain aspects of the economy and underlies expressions of support for particular economic policies.

normative

The disagreement among economists typically revolves around ______.

normative economics

A production possibilities curve (PPC) illustrates the attainable combination ______,

of two goods that can be produced given a specific set of resources

The maximum output of an economy with a specific level of resources is reflected by the points ______ the production possibilities curve.

on

Trade-offs arising from limited resources give rise to ______.

opportunity cost

Points lying ______ the production possibilities curve represent greater, but unachievable levels of output with current inputs, than that at any point on the curve.

outside

This ______ table lists the different combinations of pizza and robots that can be produced with a specific set of resources.

production of possibilities

A ______ lists the different combinations of two products that can be produced with a specific set of resources, assuming full employment.

production possibilities table

In developing economic theories, principles, or models, economists ______.

remove clutter and simplify

Arable land, water, machinery, and professional athletes are all considered economic (Enter one word) used in the production of goods and services.

resources

Land and mineral resources, transportation and communication facilities, factories and farm buildings, equipment, tools and machinery are all examples of _______.

scarce economic growth

An increase in income will ______.

shift the budget line to the right

The ratio of the price of two goods on a graphed budget line is measured by its

slope

Your next-door neighbors want to go on a European vacation but cannot afford it, so they decide to visit a local amusement park instead. This is an example of ______.

the economizing problem

In this figure, obtaining more books by giving up some movies is called a(n) ______; whereas losing two books in order to gain 1 movie is referred to as ______ cost.

trade-off; an opportunity

True or false: A decrease in income will shift the budget line to the left.

true

True or false: A trade-off occurs when some quantity of production of a good is given up in order to produce another good.

true

decrease in income will shift the budget line to the left

true

For better or worse, people have ______.

virtually unlimited wants

Positive economics is concerned with ______, whereas normative economics deals with _____.

what is; what should be