MACRO ECO SPRING 2017
All the lines in a grocery store seem to be the same length why:
Because everyone is trying to choose the shortest one
VHS vs. the other type
It was easier to use the same system as others used, to share movies
If Scout has an absolute advantage over Dill
Then Scout can accomplish more in a given hour than Dill can
Average benefit
total benefit of undertaking n units of an activity and divided by n
Average cost
total cost of undertaking n units of an activity and dividing by n
Some states have started giving tax credits to homeowners who install solar panels. This is an example of:
Using the incentive principle to encourage homeowners to switch to solar energy.
Which of the following would not be analyze in microeconomics?
Whether the federal budget should always be balanced.
Access to internet example for a naturalist:
collect more info before making the purchase because the cost of finding and acquiring it is
If a nation has the lowest opportunity cost of producing a good, that nation has a(n):
comparative advantage
Bank hours example:
cost of having it 24 hours is lower today
A study that deals with the salaries of the university professors would be:
microeconomics
Studying how Pat allocates her time between teaching classes and assisting undergraduate students is an example of:
microeconomics
Two major divisions in economics, called:
microeconomics and macroeconpmics
In a free market economy
most people are in a win win situation
marginal
near the edge or the edge. the last unit used, bought, produced, or hired
Effective free market ethical systems have
no moral foundation
Ethical rules based on fairness and morals are
normative ethics
One thing that distinguishes normative principles from positive principles is that:
normative principles tell us how people should make economic decisions, and positive principles tell us how people actually do make decisions
Positive economic principles are those that:
predict how people will behave
Benefit
something that promotes well-being, profit, enjoyment, or advantage
economic surplus
the benefit of taking the action minus its cost
The incentive principle states that a person is more likely to do something if:
the benefits from doing it increases.
marginal benefit
the increase of total benefit that results from carrying out one additional unit of activity
More efficient positive market ethics will not improve
the moral externalities of a market
economics
the study of how people make choices under conditions of scarcity and of the effects of those choices on individuals and society
macro economic
the study of the performance of national economies
4 decision making pitfalls
1. measuring costs or benefits as proportions rather than absolute amounts. 2. ignoring opportunity costs. 3. failure to ignore sunk costs. 4. failure to understand the difference between average and marginal
Which of the following statements is always true?
Comparative advantage does not require absolute advantage
Which of the following questions would not be answered in macroeconomics?
Did the sharp increase in gasoline prices alter SUV sales?
production possibilities curve
a GRAPH that describes the maximum amount of one good that can be produced for every possible level of production of another good
sunk costs
a cost that is beyond recovery at the moment a decision must be made
The incentive principle is an example of:
a positive economic principle
scarcity principle (no free lunch principle)
although we have boundless needs and wants, the resources available are limited, having more of one good thing usually means having less of another
cost benefit principle
an individual (or firm or society), should take an action if, and only if, the extra benefits from taking the action are at least as great as the extra cost
attainable point
any combination of goods that can be produced using currently available resources
unattainable point
any combination of goods that cannot be produced
An economic naturalist is described as someone who:
applies everyday insight into everyday life
Cross benefit analysis
can not determine the fairness of rules
To say that an individual possesses an absolute advantage in the production of software means that individual:
can produce more and/or higher quality software in a given amount of time
In order for a markets ethics to be effective, this can not occur
everyone must agree to take part in the market
Larry has a comparative advantage in writing a term paper if he:
if he has the lowest opportunity cost for writing a term paper
absolute advantage
if they can perform the task in less time
If the govt. wanted to use the incentive principle for smoking they would:
increase taxes on cigarettes, effectively raising the prices
Last year interest rates fell. The field of economics that would be most concerned with this is:
macroeconomics
The impact of government policies on the building of the new roads and highways would be studied
macroeconomics
Having a comparative advantage in a particular task means that:
you give up less to accomplish that task than do others
