Macro Chapter 1

discover relationships between events that are important to economic behavior.

In economics, the function of theories, laws, and hypotheses is to:

maximizing.

Making choices that are expected to achieve the highest possible value for some objective is termed:

economists sometimes make normative judgments.

Many disagreements among economists result because:

False

The existence of alternative uses for a resource implies it isn't scarce.

scarce.

The existence of alternative uses of a resource implies that it is:

True

The fallacy of false cause is committed when a person mistakenly assumes that one event causes another because the first event precedes the second.

what, how, and for whom.

The fundamental economic questions that every economic system must answer are:

here is probably some other factor that causes both baldness and heart disease.

The observed correlation between baldness and heart disease demonstrates that:

aggregates in the economy.

The primary emphasis in macroeconomics is on:

most goods can be produced with different combinations of resources.

The problem of determining how goods and services should be produced exists because:

it has alternative uses.

Water is considered a scarce good rather than a free good because:

social science.

According to the textbook, economics is a:

all societies.

The problem of scarcity is confronted by:

a decision that one person or group will receive a good or service usually means that another person or group will not.

The problem of determining for whom to produce exists because:

the best combinations of resources to be used for producing goods and services.

The problem of determining how goods and services should be produced is a problem of deciding:

resources are scarce.

The problem of determining what goods and services society should produce exists because:

false

The questions of what goods to produce, how to produce them, and for whom to produce them are of concern only in advanced industrial economies.

opportunity cost.

The sacrifice of an alternative is called:

False

The situation when we face alternative choices is called abundance.

any production requires the use of scarce resources, and thus the sacrifice of another alternative.

The statement that "there is no such thing as a free lunch" means:

normative statement.

The statement that the minimum wage needs to be increased is a:

definition of economics.

The study of how people choose among the alternatives available to them is the:

ceteris paribus, which means all other things remain unchanged.

A basic assumption used in many economic models is:

not scarce.

A free good is different from a scarce good because it is:

True

A free good is one that can be acquired without sacrifice.

a good with no opportunity cost.

A free good is:

proven to be false.

A hypothesis is an assertion that can be:

theory.

A hypothesis that has been tested extensively without being rejected and has won widespread acceptance is a:

people have unlimited wants facing limited means to satisfy them.

A key theme fundamental to all of economics is:

what ought to be.

A normative statement deals with:

false cause.

A person who mistakenly assumes that because one event follows another, the second event results from the first commits the fallacy of:

a hypothesis.

A proposition about the relationship between two variables that can be proven false is called:

has alternative uses.

A scarce resource is one that:

model.

A simplified representation of a particular problem is a:

the scientific method

A systematic set of procedures through which knowledge is created is:

ceteris paribus.

A term that means "all other things unchanged" is:

law.

A theory that has won virtually universal acceptance is a:

independent variable.

A variable that induces a change in another variable is a(n):

free good

A(n) _______ does not pose the problem of scarcity; one use of the good is not an alternative to another use.

false

All choices have monetary costs.

it has two or more alternative uses.

Although water is very abundant in most places, it is scarce because:

who gets the goods and services produced.

An answer to the question "For whom" determines:

how resources are combined in the production of goods.

An answer to the question "How are goods produced?" determines:

false

An attempt should always be made to maximize opportunity cost.

A high rate of economic growth is good for the country.

An example of a normative statement is:

The rate of unemployment is 4 percent.

An example of a positive statement is:

an increase in investment spending tends to reduce unemployment.

An example of a positive statement is:

True

Anything that has alternative uses has an opportunity cost and is, therefore, scarce.

variable.

Anything whose value can change is a:

all other things unchanged.

Ceteris paribus means:

built using assumptions.

Economic models are:

social science concerned chiefly with how people choose among alternatives.

Economics is a:

social science that deals with making choices among alternatives.

Economics is a:

how people choose among the alternatives available to them.

Economics, generally speaking, is primarily concerned with:

concerned with developing theories and interested in solving problems.

Economists are:

true

Economists pay special attention to making choices at the margin.

true

Margin suggests additional or incremental.

individual units in the economy.

Microeconomics deals with:

Who gets how much of the economic pie?

One question that arises when determining for whom goods and services should be produced is:

true

Opportunity cost is the expected value of the alternative not chosen.

the highest valued other choice that could have been made.

Opportunity cost is:

the value of the best alternative forgone in making any choice.

Opportunity cost is:

statements that can be tested.

Positive statements are:

are factual and can be tested.

Positive statements:

the fallacy of false cause.

Reaching the incorrect conclusion that one event causes another because the events tend to occur together is called:

what is given up to acquire it.

The opportunity cost of something is:

a choice must be made among two or more alternatives.

Scarcity exists when:

constant

Something whose value does not change is a:

positive

Statements that are a hypothesis or statement of fact are:

normative

Statements that make value judgments are:

false cause.

Suppose you observe that the sun sets every evening after the six o'clock business report. If you conclude that the six o'clock business report makes the sun set, you are guilty of the fallacy of:

a coffee drinker drinking another cup of coffee.

The BEST example of making a choice at the margin is:

men are unlikely to influence their chances of having heart problems.

The Case in Point on "baldness and heart disease" suggests that by preventing baldness:

the kinds and quantities of goods and services produced.

The answer to, "What goods are to be produced?" deals with:

study the choices people make.

The basic concern of economics is to:

microeconomics.

The branch of economics that examines the choices of consumers and firms is:

macroeconomics.

The branch of economics that examines the impact of choices on aggregates in the economy is:

almost all goods have alternative uses.

The concept of scarcity indicates that:

is positive.

The current rate of unemployment is 5 percent. This statement:

making choices at the margin.

The economic way of thinking has to do with:

attention paid to the opportunity costs involved in any choice.

The economic way of thinking includes:

emphasis on how choices are made at the margin.

The economic way of thinking includes:

the assumption that individuals choose to maximize some objective.

The economic way of thinking includes:

true

The economic way of thinking pays special attention to costs, assumes individuals seek to maximize some objective, and focuses on choices at the margin.

fallacy of false cause.

The incorrect presumption that because two events tend to occur together, one must cause the other is the:

the next best use of the time and the money spent.

The opportunity cost of going to a movie is:

false

The three fundamental economic questions are what, how, and why.

chemistry.

The use of controlled experiments using particular substances to test hypotheses is most likely to be found in:

true

The value of the next-best choice not chosen is called opportunity cost.

scarcity.

When we are forced to make choices we are facing the concept of:

the cost of that choice could be referred to as opportunity cost.

Whenever a choice is made:

the opportunity cost of that choice is the highest-valued other choice that could have been made.

Whenever a choice is made: