ECON 200 Flashcards
Exam 1
Something is a resource if?
Humans see it as potentially useful
I am a college student deciding what career to pick. I could become a teacher and make $40,000. I could become an economist and make $60,000, or an engineer and make $80,000. In terms of foregone salaries, what is the opportunity cost of becoming a teacher?
$80,000
Transaction costs include
All of the above:
transportation and packaging costs, bargaining and negotiation costs, enforcement and policing costs
The marginal value of a good is the value obtained from.
One additional unit of a good
You bought a gym membership for $20 that allows you to visit the gym at a cost of $5 per visit. The marginal cost of your twentieth visit to the gym is.
$5
Institutions include
norms, customs, and beliefs
A country’s PPF might shift or rotate inward as a result of
a war or natural disaster.
Which of the following is NOT considered a condition necessary for trade?
advance payment
An experienced business person is better than her assistant in customer relations and accounting. She has a comparative advantage in?
either customer relations or accounting, but not both
Explain why trade is not a zero-sum game?
Trade is not a zero-sum game; a zero-sum game is when one person wins and the other loses. In a trade, both people benefit.
What is the study of how people make decisions in the face of scarcity?
economics
The idea we have limited resources but unlimited wants?
scarcity
The costs of getting goods from sellers to buyers is
transaction cost
Which of the following is not a characteristic of money?
Intrinsic Value
The additional cost has taken on a decision
Marginal Cost
Rules for interaction such as laws or social norms
Institutions
The study of how large groups or continues to make decisions
Macroeconomics
A graph that shows all combinations of two goods that are possible to produce given limited resources
PPF
Is it possible for people/countries to consume beyond their PPFs?
Yes, with trade
A technological innovation benefiting production of one output, but not both, will cause a PPF shift or pivot?
Pivot
The economic system based on a central planner determining production and the allocation of goods
Command-based economy
All of the following are true about Adam Smith’s beliefs except
He believed market economies were perfect and could never have any problems
Land, labor, and capital are the three main categories of what?
Resources
True/False: Objective value does depend on personal feelings, opinions, or beliefs
False (subjective value does)
True/False: to maximize utility, people should consume up to the point where MB > MC
False
How individuals make decisions in the face of scarcity
Microeconomics
