Ch 1 Flashcards
According to economists, economic self interest
Is the reality that underlies economic behavior
Suppose an economist says that other things equal the lower the price of bananas the greater the amount of bananas purchased the statement indicates that
All factors other than the price of bananas ( for example, consumer tastes and income ) are soon to be constant.
The basic purpose of the other things equal assumption is to
Allow one to reason about the relationship between variables X and Y without the intrusion of variable Z
Macro economics approaches the study of economics from the viewpoint of
The entire economy
Macroeconomics can best be described as the
Study of the large aggregates of the economy or the economy as a whole
Macro economics is the part of economics concerned with individual units such as a person, a household, a firm, or an industry this statement is
Positive, but incorrect
If an economy is operating on its production possibilities curve for consumer goods and capital goods, this means that
More consumer goods can only be produced at the cost of fewer capital goods
The point on the production possibilities curve that is most desirable can be found by
Comparing marginal benefits and marginal cost
The economic perspective used in customer decision-making at fast food restaurants is reflected in the consider this section as
Customer selecting the shortest line
Which of the following best illustrates the post hoc, ergo propter hoc fallacy in the last word section
I took the day off work to go to the beach And that is why it rained
The post hoc fallacy and the correlation problem both relate to
The issue of determining causation
A caller to radio talkshow states that protesters against globalization are a collection of an artist, naïve college students, and trade union radicals this is an example of
Loaded terminology
Rational individuals may make different choices because their preferences of circumstances differ. True or false
True
True or false products and services are scarce because resources are scarce
True
If a positive relationship exists between X and Y
The relationship will graph as an in sloping line
According to Emerson want is a growing giant whom the coat of have was never large enough to cover according to economist, most wants exceeds have because
Productive resources are limited
A person should consume more of something when it’s marginal
Benefit exceeds marginal cost
Purposeful behavior means that
People weigh cost and benefits to make decisions
Marginal cost exist because
The decision to engage in one activity means forgoing some other activity
Which of the following terms implies the greatest degree of confidence in an economic generalization
A principle
A well tested economic theory is often called
A principle
Which of the following statements pertains to macro economics
National income grew by 2.7% last year
An increase in money income
Shifts the consumers budget line to the right
Money is not an economic resource because
Money, as such, does not produce anything
When an economy is operating under conditions of full employment, the production of more of commodity a Will mean the production of less of commodity b because
Resources are limited
The marginal cost curve is
Upsloping because of increasing marginal opportunity cost
A caller to radio talkshow states that oil companies are greedy price gougers this is an example of
Loaded terminology
If price and quantity are directly related then this means
If P increases, Q will also increase
