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44 Cards in this Set
- Front
- Back
Society's economizing problem involves:
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Scarce Resources
Opportunity Cost Making Choices in the face of scarcity |
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As more and more of a particular good is produced, which of the following rises?
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Opportunity Costs
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In macroeconomics, an _______ is a collection of specific economic units treated as if they were one unit.
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Aggregate
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Combination of goods that fall inside the production possibilities curve represent:
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Less total output in an economy
Goods that are Attainable Inefficient use of Resources |
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(1)_______ economic analysis concerns what is, wheras (2)_____ economic analysis embodies subjective feelings about what ought to be.
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1. Positive
2. Normative |
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Arable land, water, machinery and a professional baseball player are all considered economic _____ to production.
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Resources
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In comparing marginal benefits versus marginal costs of a decision, wec an assume that a decision maker is making choices _____.
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Purposefully
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Why is it in our self-interest to economize or pick and choose goods and services that maximize our satisfaction?
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Because of our limited incomes conflicting with our insatiable wants for goods and services.
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In a world of scarcity:
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The decision to obtain the marginal benefit associated with some specific option always includes the marginal cost of forgoing something else.
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Natural resources, labor, human capital, physical capital and entrepreneurship are all scarce economic resources privately or collectively owned by members of society. Where these scarce resources are used to produce goods or services, there is:
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A cost borne by society in utilizing these resources to produce any good or service.
No free lunch. |
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Economic principles are generalizations expressed as:
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The tendencies of typical or average consumers, workers, or business firms.
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What does each point on a production possibilities curve represent?
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Efficiency in production
The maximum output of two products |
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The shape of the production possibilities curve is most likely bowed out from the origin because:
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Economic resources are not completely adaptable to alternative uses
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The concept or term that refers to the notion that all variables except those under immediate consideration are held constant for a particular analysis is known as:
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The other-things-equal assumption
Ceteris Paribus |
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The economic perspective focuses on ______, therefore the decision maker must compare incremental benefits and costs.
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Marginal Analysis
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Points lying _____ the production possibilities curve are unattainable with the current availability of resources and technology.
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Outside
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The disagreement among economists involves _____, value-based policy questions.
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Normative
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Consider the relationship between the price and quantity of green apples purchased. Any other factors such as the price of red apples, incomes, and tastes and preferences are not considered. Which of the following assumptions are we considering?
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Ceteris Paribus
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Unemployment is represented on the production possibilities model as:
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Any point below the production possibilities curve
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Consumers must forego choices based on a limited budget because:
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consumers spend their limited budget purchasing a combination of goods that maximize their utility
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Because consumers behave in a rational self-interest manner, the consumer will purchase a good or service:
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when the marginal benefit is greater than or equal to the marginal cost.
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A production possibilities table illustrates that at any point in time:
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A fully employed economy must sacrifice some amount of one good to obtain more of another good.
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_____ in the quantity or quality of resource or factors of production result in a shift outward of the production possibilities frontier.
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An Increase
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Trade-offs arising from limited incomes give rise to:
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Opportunity Costs
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The assumption behind purposeful behavior means that:
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People act in such a way as to rationally pursue their own interests
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Economic principles and models are highly useful in:
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Determining cause and effect
Understanding how the ecomnomy operates Analyzing economic behavior Explaining and predicting. |
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Because individuals weigh costs and benefits, their economic decisions are _____.
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rational
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An Increase in income will:
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shift the budget line to the right
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True or False: Positive economics encourages value judgements.
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False
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______ economics considers the desirability of certain aspects of the economy and underlies expressions of support for particular economic policies.
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Normative
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Suppose you are gifted a $100 gift card and you choose to spend it on a number of goods. you will select a combination of goods that is best for you and that maximizes your satisfaction. In other words, your choices will account for the effects of:
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Marginal benefits and marginal costs of each good considered
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Ceteris Paribus
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Other-Things-Equal Assumption:
The assumption that factors other than those being considered are held constant |
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The scientific method consists of several elements, including:
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Accepting, rejecting, and adjusting a hypothesis
Continuing to test the hypothesis against facts. Observing real-world behavior and outcomes and formulating a hypothesis based on said observations. |
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Economists devlop theories of the _____ of individuals (consumers, workers) and institutions (businesses, governments) engaged in the production, exchange and consumption of goods and services.
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behavior
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Combination of goods that fall on the production possibilities curve:
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Are efficiently produced
Utilize all of an economy's resources Are attainable |
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Each point on the production possibilities curve represents some _____ of two products.
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Output combination
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_____ comes in the form of wages, interest, rent, profit, and even from government programs.
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Income
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Economists do not include money as an economic resource because:
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Money produces nothing
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Suppose an economy produces only two goods, consumer goods and capital goods. Its current combination of production involves a higher level of capital goods than consumer goods. Which of the following can be inferred from this current choice on its production possibilities curve?
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That its present choice in production may result in higher future prospects for economic growth.
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A budget line describes:
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The alternative combinations of two goods that a buyer can purchase with given money income
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The law of increasing opportunity costs arises because:
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Resources are not perfectly flexible or interchangeable.
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Combinations of goods lying outside the budget line, not the PPF:
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Are unattainable, given a consumer's income
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What exemplifies that topics and subdivisions of economics can be rooted in both macroeconomics and microeconomics?
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The unemployment rate and the decisions of individual firms and works to encourage or impede hiring, as well as to search for work respectively.
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Specializing and participating in international trade allows an economy to:
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Circumvent the output limits imposed by its domestic production possibilities curve
Increase the quantities of capital and consumer goods available to society. |