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Microeconomics > Chapter 1 The Economic Problem > Flashcards

Chapter 1 The Economic Problem Flashcards

1
Q

The highest-valued alternative that is given up or sacrificed when choosing to produce or consume one good over another is referred to as ______

A

an opportunity cost

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2
Q

Calgary is 286 km from Edmonton” would be what king of statement.

A

Positive

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3
Q

The factors of production include which of the following?

A

enterprise
capital
land (natural resources)
labor

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4
Q

What is the definition of productive efficiency?

Multiple choice question.

A

The maximization of output from available inputs.

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5
Q

Why does voluntary trade make all parties better off?

A

It permits all parties to acquire goods and services better suited to their needs and wants.

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6
Q

“If prices are increased for a product, the quantity demanded will decrease” is an example of a hypothesis.

A

True

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7
Q

What is a hypothesis?

A

An idea that can be tested.

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8
Q

For economic growth, the opportunity cost of more capital goods is ______.

A

less consumer goods

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9
Q

Which of the following correctly opposes the statement “globalization only benefits large multinational corporations, not ordinary people”?

A

A billion people have gotten out of abject poverty due to globalization.

With more world trade there will be more benefits to those who trade.

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10
Q

Productive efficiency is the ability to produce at the lowest per unit cost in relation to inputs.

A

True

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11
Q

Which of the following correctly opposes the statement “globalization only benefits large multinational corporations, not ordinary people?

A

With more world trade there will be more benefits to those who trade.
A billion people have gotten out of abject poverty due to globalization.

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12
Q

Which of the following are issues most explored in microeconomics?

A

A firm’s decision to hire more workers.

The taxes placed on individuals.

Measuring the price of specific goods.

Measuring total revenues of a firm or household.

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13
Q

Deciding what is produced and what is not produced infers that economics is sometimes called the science of ______.

A

Choice

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14
Q

Which of the following would be considered the simple definition of “technology” by an economist?

A

A method of production

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15
Q

Which of the following best describes allocative efficiency?

A

Producing goods the people want.

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16
Q

______ economics considers the subjective desirability of certain aspects of the economy and underlies expressions of support for particular economic policies.

A

Normative

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17
Q

Canada produces both sweaters and shoes and suppose the technology used for the production of shoes improves. How will this be represented on a production possibilities curve diagram?

A

The curve will shift out on the axis with the shoes but the point on the sweater axis will stay the same.

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18
Q

______ statements focus on facts that can be verified.

A

Positive

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19
Q

What is the main reason one nation trades with another?

A

To exploit the mutual gains both countries can acquire.

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20
Q

Which of the following are issues most explored in macroeconomics?

A

Unemployment and inflation rates.

Measuring the price of all goods using the Consumer
Price Index..

The Gross Domestic Product and economic growth

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21
Q

The branch of economics that studies the economy as a whole or in the aggregate is known as ______.

A

macroeconomics

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22
Q

What is economics primarily the study of?

A

How limited resources are allocated to satisfy unlimited wants.

23
Q

Due to scarce resources, every individual, whether rich or poor, faces a(n) (one word) cost when choosing to produce or consume more of one good over another.

A

Opportunity

24
Q

Which question is the most important to answer but also the most difficult.

A

Why

25
Q

________ studies the ways in which humans and societies attempt to satisfy seemingly unlimited human wants in the face of limited resources.

A

Economics

26
Q

What is economics most concerned with?

A

How people cope with unlimited wants but face limited resources.

27
Q

Why is there often disagreement between people when discussing various economic issues?

A

Economics is part science and part art.

Peoples’ set of values differ from person to person.

28
Q

A change in technology results in a pivot of the PPC curve (one axis moving more than the other).

A

True

29
Q

Which of the following will NOT shift the production possibilities curve outward?

A

A decrease in capacity utilization of existing factories.

30
Q

Which of the following correctly opposes the statement “economic growth is something that we should applaud and always strive to achieve”?

A

Growth puts emphasis on material goods instead of things like job satisfaction and a stronger sense of community.

Economic growth can lead to environmental damage.

31
Q

Economics is called the science of choice because deciding what to make is a founding question.

A

True

32
Q

A country will experience more economic growth if it invests in more capital than consumer goods.

A

True

33
Q

When examining the change in a variable?

A

WHY is the hardest question to answer.

34
Q

Which of the following correctly opposes the statement “there should be an introduction of road pricing in congested Canadian cities to reduce traffic during peak times”?

A

Road pricing is a government tax grab.

Road pricing put a disproportionate burden on low income drivers.

35
Q

_________ is the discipline of economics concerned with individual units such as a person, household, firm or industry. (Enter one word in each blank.)

A

Micro or Microeconomics

36
Q

Canada produces both sweaters and shoes and suppose the technology used for the production of both improves. How will this be represented on a production possibilities curve diagram?

A

The entire curve will shift out.

37
Q

if an economy is operating efficiently and the production possibilities curve shifts outwards, which of the following are possible outcomes?

A

Good B will increase but A will remain unchanged.
Both goods A and B will increase.
Good A will increase but B will remain unchanged.

38
Q

Which of the following correctly opposes the statement “Governments should use its income redistribution tools to channel more income from the rich to the poor”?

A

A larger economic pie is needed since richer countries already have more evenly distributed incomes.

Higher taxes are a disincentive to work.

39
Q

Which of the following correctly supports the statement “Economic growth is something that we should applaud and always strive to achieve?

A

The economic well being of the average Canadian has doubled in the last two generations.

Economic growth leads to social and political stability.

40
Q

______ is being considered when looking at the choices of goods and services that can be produced in an economy

A

What to produce

41
Q

In economics, what does the term scarcity mean?

A

The desire for goods is much greater than our ability to produce them with limited available resources

42
Q

The law of increasing marginal costs is driven by ______.

A

resources that are not equally productive in the production of different goods or interchangeable

the fact that as a the economy increases the output of one product the per unit costs of that product rise

43
Q

Normative economics is ____.

A

based on subjective or value judgments

44
Q

Productive ______ is measured in terms of the ratio of outputs produced to inputs used.

A

efficiency

45
Q

Producing the right combination of products is called allocative efficiency.

A

True

46
Q

What is the definition of a positive statement?

A

Measurable or verifiable statements.

47
Q

Which of the following correctly supports the statement “globalization only benefits large multinational corporations, not ordinary people”?

A

When it comes to environmental and labour regulations, there is a race to the bottom.

Globalization leads to big companies moving jobs to countries where the wage rate is lower.

48
Q

Canada produces both sweaters and shoes and suppose the technology used for the production of shoes improves. How will this be represented on a production possibilities curve diagram?

A

The curve will shift out on the axis with the shoes but the point on the sweater axis will stay the same

49
Q

When a country wants to economically grow more in the future it must:

A

produce more capital goods.

50
Q

Which of the following will shift the production possibilities curve outward?

A

Discovery of a new efficient way of producing computers.
Improved infrastructure.
A better educated workforce.

51
Q

______ is concerned with how the major components of the economy

A

Macroeconomics or Macro

52
Q

The law of increasing costs states that as production of a particular good ______, the opportunity cost of producing an additional unit ______.

A

rises; rises

53
Q

Technology involves the combination of the four factors of . (Enter one word in the blank.)

A

production

54
Q

Which of the following describe the concept of laissez-faire capitalism?

A

The role of government includes to ensuring the appropriate operation of the market system.

The role of government includes protecting private property.

Microeconomics (10 decks)

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