MICROECONOMICS : CHAPTER 1 & 2 QUIZ

Specialization

Which of the following is generally accepted as a valid criticism of the production of useful goods and services?

In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________, which means the way in which the work required to produce a good or service is divided into a number of tasks that are performed by different workers.

division of labor

n countries like _____________ the command economy predominates.

In the ______________, households receive goods and services and pay firms for them.

In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of:

Which of the following statements most likely lies within the realm of microeconomics?

Because of their relatively small national economies, which of the following is most likely considered to be the most important factor for Belgium, Korea, and Canada to take full advantage of specialization?

The basic difference between macroeconomics and microeconomics is:

When nations desire a healthy macroeconomy, they typically focus on three goals, one of these being:

Which of the following statements most likely lies within the realm of macroeconomics?

Which of the following best characterizes the circular flow of income?

In a discussion of economics, which of the following would exert the most influence on an individual firm's decision to hire workers?

In a command economy, the __________ either makes most economic decisions itself or at least strongly influences how the decisions are made.

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is:

Economists refer to this pattern, the ___________________________________, which means that as a person receives more of a good, the additional or marginal utility from each additional unit of the good declines.

The lesson of __________ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options.

Marginal thinking is best demonstrated by:

production possibilities frontier

As a person receives more of a good, the _______________ from each additional unit of the good declines.

The choice on a production possibilities set that is socially preferred, or the choice on an individual's budget constraint that is personally preferred, will display _____________________.

Scarcity implies that:

Why is there scarcity?

positive statement

normative statement

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the budget constraint, sometimes also called the _______________, a diagram which shows what choices are possible.