Microeconomics Unit 1: The Nature and Method of Economics

question

Economists view positive statements as

answer

descriptive, making a claim about how the world is.

question

Which of the following displays a direct, or positive, relationship?

answer

a country's productivity and its standard of living

question

What is one definition of equity?

answer

fairness

question

Production possibilities frontiers can shift outward

answer

if there is an increase in technology.

question

A rancher can produce only beef, while a farmer can produce only potatoes. If the rancher and the farmer each like both foods, which of the following is most likely?

answer

They could gain from trade because each would enjoy a greater variety of food.

question

What is the x-coordinate?

answer

the first number of an ordered pair, which represents the point's horizontal location

question

Bill has noticed that increases in unemployment insurance claims are associated with recessions, and therefore he advocates limits on unemployment insurance so as to prevent recessions. Martha has noticed that most drug addicts once attended schools, and therefore she advocates getting rid of schools so as to prevent drug addiction. What do we know about the reasoning of Bill and Martha?

answer

Bill's reasoning suffers from the reverse causality problem, and Martha's reasoning suffers from the omitted variable problem.

question

What does the saying "There is no such thing as a free lunch" mean?

answer

To get something we like, we usually have to give up another thing we like.

question

In economics, capital refers to

answer

buildings and machines used in the production process.

question

How do prices direct economic activity in a market economy?

answer

by influencing the actions of buyers and sellers

question

What does it mean if an economy is producing efficiently?

answer

There is no way to produce more of one good without producing less of the other.

question

Economics deals primarily with the concept of

answer

scarcity

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What is the term that means "whatever must be given up to obtain an item"?

answer

opportunity cost

question

A primary function of prices in a market economy is to provide participants with

answer

economic information.

question

Suppose a gardener produces both green beans and corn in her garden. If she must give up 15 bushels of corn to get five bushels of green beans, what is the opportunity cost of one bushel of green beans?

answer

3 bushels of corn

question

A demand curve shows the relationship between/among

answer

price and quantity demanded.

question

What happens when scientists make good assumptions?

answer

They greatly simplify the problem without substantially affecting the answer.

question

A production possibilities frontier will be linear and not bowed out

answer

if the trade-off between the two goods is always at a constant rate.

question

Which statement about slope is NOT correct?

answer

Slope can be computed by delta x divided by delta y.

question

How is the slope of a line calculated?

answer

change in y/change in x

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What are factors of production?

answer

inputs into the production process

question

What is the definition of productivity?

answer

What is the definition of productivity?

question

What is a circular-flow diagram?

answer

a visual model of how the economy is organized

question

What does microeconomics study?

answer

how individual households and firms make decisions

question

When does scarcity exist?

answer

when there is less of a good or resource available than people wish to have

question

For society, a good is NOT considered scarce

answer

if all members of society can have all they want of the good.

question

Economists view normative statements as

answer

prescriptive, making a claim about how the world ought to be.

question

Using all available resources, if a farmer can produce either 65 cantaloupes or 70 watermelons, what is the opportunity cost of one cantaloupe to the farmer?

answer

1.08 watermelons

question

Regan grows flowers and makes vases. Jayson also grows flowers and makes vases, but Regan is better at producing both. Who has an absolute or comparative advantage in what activity?

answer

Regan has an absolute advantage in both activities.

question

According to economists, people respond to

answer

incentives

1 of 30

question

Economists view positive statements as

answer

descriptive, making a claim about how the world is.

question

Which of the following displays a direct, or positive, relationship?

answer

a country's productivity and its standard of living

question

What is one definition of equity?

answer

fairness

question

Production possibilities frontiers can shift outward

answer

if there is an increase in technology.

question

A rancher can produce only beef, while a farmer can produce only potatoes. If the rancher and the farmer each like both foods, which of the following is most likely?

answer

They could gain from trade because each would enjoy a greater variety of food.

question

What is the x-coordinate?

answer

the first number of an ordered pair, which represents the point's horizontal location

question

answer

Bill's reasoning suffers from the reverse causality problem, and Martha's reasoning suffers from the omitted variable problem.

question

What does the saying "There is no such thing as a free lunch" mean?

answer

To get something we like, we usually have to give up another thing we like.

question

In economics, capital refers to

answer

buildings and machines used in the production process.

question

How do prices direct economic activity in a market economy?

answer

by influencing the actions of buyers and sellers

question

What does it mean if an economy is producing efficiently?

answer

There is no way to produce more of one good without producing less of the other.

question

Economics deals primarily with the concept of

answer

scarcity

question

What is the term that means "whatever must be given up to obtain an item"?

answer

opportunity cost

question

A primary function of prices in a market economy is to provide participants with

answer

economic information.

question

answer

3 bushels of corn

question

A demand curve shows the relationship between/among

answer

price and quantity demanded.

question

What happens when scientists make good assumptions?

answer

They greatly simplify the problem without substantially affecting the answer.

question

A production possibilities frontier will be linear and not bowed out

answer

if the trade-off between the two goods is always at a constant rate.

question

Which statement about slope is NOT correct?

answer

Slope can be computed by delta x divided by delta y.

question

How is the slope of a line calculated?

answer

change in y/change in x

question

What are factors of production?

answer

inputs into the production process

question

What is the definition of productivity?

answer

What is the definition of productivity?

question

What is a circular-flow diagram?

answer

a visual model of how the economy is organized

question

What does microeconomics study?

answer

how individual households and firms make decisions

question

When does scarcity exist?

answer

when there is less of a good or resource available than people wish to have

question

For society, a good is NOT considered scarce

answer

if all members of society can have all they want of the good.

question

Economists view normative statements as

answer

prescriptive, making a claim about how the world ought to be.

question

Using all available resources, if a farmer can produce either 65 cantaloupes or 70 watermelons, what is the opportunity cost of one cantaloupe to the farmer?

answer

1.08 watermelons

question

Regan grows flowers and makes vases. Jayson also grows flowers and makes vases, but Regan is better at producing both. Who has an absolute or comparative advantage in what activity?

answer

Regan has an absolute advantage in both activities.

question

According to economists, people respond to

answer

incentives

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