Chapter 1 The Economic Problem Flashcards
The highest-valued alternative that is given up or sacrificed when choosing to produce or consume one good over another is referred to as ______
an opportunity cost
Calgary is 286 km from Edmonton” would be what king of statement.
Positive
The factors of production include which of the following?
enterprise
capital
land (natural resources)
labor
What is the definition of productive efficiency?
Multiple choice question.
The maximization of output from available inputs.
Why does voluntary trade make all parties better off?
It permits all parties to acquire goods and services better suited to their needs and wants.
“If prices are increased for a product, the quantity demanded will decrease” is an example of a hypothesis.
True
What is a hypothesis?
An idea that can be tested.
For economic growth, the opportunity cost of more capital goods is ______.
less consumer goods
Which of the following correctly opposes the statement “globalization only benefits large multinational corporations, not ordinary people”?
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.
Productive efficiency is the ability to produce at the lowest per unit cost in relation to inputs.
True
Which of the following correctly opposes the statement “globalization only benefits large multinational corporations, not ordinary people?
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.
Which of the following are issues most explored in microeconomics?
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.
Deciding what is produced and what is not produced infers that economics is sometimes called the science of ______.
Choice
Which of the following would be considered the simple definition of “technology” by an economist?
A method of production
Which of the following best describes allocative efficiency?
Producing goods the people want.
______ economics considers the subjective desirability of certain aspects of the economy and underlies expressions of support for particular economic policies.
Normative
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?
The curve will shift out on the axis with the shoes but the point on the sweater axis will stay the same.
______ statements focus on facts that can be verified.
Positive
What is the main reason one nation trades with another?
To exploit the mutual gains both countries can acquire.
Which of the following are issues most explored in macroeconomics?
Unemployment and inflation rates.
Measuring the price of all goods using the Consumer
Price Index..
The Gross Domestic Product and economic growth
The branch of economics that studies the economy as a whole or in the aggregate is known as ______.
macroeconomics
What is economics primarily the study of?
How limited resources are allocated to satisfy unlimited wants.
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.
Opportunity
Which question is the most important to answer but also the most difficult.
Why
________ studies the ways in which humans and societies attempt to satisfy seemingly unlimited human wants in the face of limited resources.
Economics
What is economics most concerned with?
How people cope with unlimited wants but face limited resources.
Why is there often disagreement between people when discussing various economic issues?
Economics is part science and part art.
Peoples’ set of values differ from person to person.
A change in technology results in a pivot of the PPC curve (one axis moving more than the other).
True
Which of the following will NOT shift the production possibilities curve outward?
A decrease in capacity utilization of existing factories.
Which of the following correctly opposes the statement “economic growth is something that we should applaud and always strive to achieve”?
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.
Economics is called the science of choice because deciding what to make is a founding question.
True
A country will experience more economic growth if it invests in more capital than consumer goods.
True
When examining the change in a variable?
WHY is the hardest question to answer.
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”?
Road pricing is a government tax grab.
Road pricing put a disproportionate burden on low income drivers.
_________ is the discipline of economics concerned with individual units such as a person, household, firm or industry. (Enter one word in each blank.)
Micro or Microeconomics
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?
The entire curve will shift out.
if an economy is operating efficiently and the production possibilities curve shifts outwards, which of the following are possible outcomes?
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.
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 larger economic pie is needed since richer countries already have more evenly distributed incomes.
Higher taxes are a disincentive to work.
Which of the following correctly supports the statement “Economic growth is something that we should applaud and always strive to achieve?
The economic well being of the average Canadian has doubled in the last two generations.
Economic growth leads to social and political stability.
______ is being considered when looking at the choices of goods and services that can be produced in an economy
What to produce
In economics, what does the term scarcity mean?
The desire for goods is much greater than our ability to produce them with limited available resources
The law of increasing marginal costs is driven by ______.
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
Normative economics is ____.
based on subjective or value judgments
Productive ______ is measured in terms of the ratio of outputs produced to inputs used.
efficiency
Producing the right combination of products is called allocative efficiency.
True
What is the definition of a positive statement?
Measurable or verifiable statements.
Which of the following correctly supports the statement “globalization only benefits large multinational corporations, not ordinary people”?
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.
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?
The curve will shift out on the axis with the shoes but the point on the sweater axis will stay the same
When a country wants to economically grow more in the future it must:
produce more capital goods.
Which of the following will shift the production possibilities curve outward?
Discovery of a new efficient way of producing computers.
Improved infrastructure.
A better educated workforce.
______ is concerned with how the major components of the economy
Macroeconomics or Macro
The law of increasing costs states that as production of a particular good ______, the opportunity cost of producing an additional unit ______.
rises; rises
Technology involves the combination of the four factors of . (Enter one word in the blank.)
production
Which of the following describe the concept of laissez-faire capitalism?
The role of government includes to ensuring the appropriate operation of the market system.
The role of government includes protecting private property.
