Introduction to Macroeconomics

coordination problem under central planning.

"Under central planning, some group has to decide how to get the necessary inputs produced in the right amounts and delivered to the right places at the right time. This is a nearly impossible task without markets and profits." This quotation best identifies the

exchange and trade.

A required element for specialization to lead to an increase in the satisfaction of society's wants is

social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity.

Economics may best be defined as the

WRONG labor performs manual work, whereas an entrepreneur performs mental work.

One basic difference between "labor" and "entrepreneur" is that

central planning conducted by the government.

One major element of the command system is

encourages owners to maintain or improve their property so as to preserve or enhance value.

Private property

c to point b. (point remains on line but shifts towards guns)

Refer to the production possibilities curve. At the onset of the Second World War, the Soviet Union was already at full employment. Its economic adjustment from peacetime to wartime can best be described by the movement from point

WRONG allows society to avoid the coincidence-of-wants problem.

Specialization in production is important primarily because it

intercept on the X axis of the budget line.

Suppose that a consumer purchases just two goods, X and Y. The ratio of the price of good X to the price of good Y is the

incentive problem under communist central planning.

Suppose that an individual sees a tremendous opportunity to produce and sell a new product but dismisses the idea because there is no way to exploit this opportunity for personal gain. This situation best identifies the

False

T/F: Property rights give the government the right to own, use, and dispose of resources in an economy.

if society wants to produce more of a particular good, it must sacrifice larger and larger amounts of another good to do so. OR increases in the production of one good require larger and larger sacrifices of the other good.

The law of increasing opportunity costs states that

innovate.

The main function of the entrepreneur is to

marginal benefit is less than the marginal cost of the good.

When a nation is under-allocating resources to the production of a good, then the

minimal government intervention

Which of the following is a distinguishing feature of laissez-faire capitalism?

It requires a coincidence of wants.

Which of the following is the main problem with the barter system of exchange?

What policies would be recommended for stimulating national economic growth?

Which question is an example of a macroeconomic question?