Micro Module 1 Reading

Which of the following is not an economic agent?

*All are economic agents Corporation Labor Union Charity

An example of subjective judgement would be:

*All of the answers are subjective judgements. what level of saving a person will make for future expenditures. the value of a rock from the moon. how much risk one is willing to accept to receive a gain.

The opportunity cost of lying in the sun to get a tan is:

*All of these are the opportunity cost. the next best activity you could do instead of lying in the sun. the potential skin problems that could result from sunlight exposure. the time you take to lie in the sun.

Two events, A and B, tend to happen together, i.e, they are correlated. What would best describe their causation?

*All these would describe their causation. A causes B, a direct causation. B causes A, an indirect causation. A and B result from a third event, C

According to the rationality assumption, people:

Do not intentionally make decisions that would leave them worse off.

Which of the following is a positive economic statement?

If minimum wage rates rise, then unemployment will rise.

Which of these covers the study of topics such as inflation and unemployment?

Macroeconomics

__________ is the study of how households and businesses make choices, how they interact in markets, and how government influences their choices.

Microeconomics

Which of the following is not a possible opportunity cost of attending college?

The cost of housing

Which of these is a macroeconomic study?

The study of how fast prices in general are rising.

If the president of Colombia commented that "we should do something to reduce inflation in Colombia," this would be an example of:

a normative statement

Economic activities that are feasible have what characteristics:

affordable and available

Empiricism is:

analyzing data or evidence.

Facts, measurements, or statistics used to describe something specific are collectively known as:

data

Analyzing data or evidence is called:

empiricism.

Macroeconomics can be used to understand all of the topics listed below, except:

how a consumer decides between the purchase of two different cars

"People are fundamentally good."

is a normative statement.

Economics:

is concerned with how people make choices

The measure of benefits minus costs is:

net benefit

Selecting the best feasible option among available manufacturing options is called:

optimization.

Macroeconomics is concerned with all of the following except:

political party affiliation

When an investment counselor advises a client as to the risk/return trade-off on an investment, this type of help is called _______________ economics.

prescriptive

A free rider is a person who:

receives benefit from a good without paying for the good

Economics is the study of choice under conditions of:

scarcity

The principle of opportunity cost evolves from the concept of:

scarcity

Costs that cannot be recovered and therefore aren't relevant to a decision for a future activity are called _______________ costs.

sunk

The optimal economic decision is to continue any activity, investing or otherwise, up to the point where:

the additional benefit of the activity is at least more than the additional cost of the activity

A definition of opportunity cost is:

the value of best thing that you give up to get something else.