Economic Principles and Economic Model Flashcards
A busy professor can’t decide whether to stay in his office to grade papers for another hour or to go home and go to bed. This is an example of:
marginal analysis
A choice made ________ is a choice whether to do a little more or a little less of something.
at the margin
After eating three slices of pizza, you decide to eat one more piece. Your decision is an example of the economic principle called:
marginal decision making.
All children have to be immunized against polio, measles, mumps, and other diseases. If you don’t have enough money to pay for the immunizations, they will be provided free at the county health clinic. This statement best represents this economic concept:
When markets don’t achieve efficiency, government intervention can improve society’s welfare.
A trade-off between equity and efficiency may exist because of all of the following except that:
allocating resources fairly will always cause efficiency.
During the Great Depression, consumers and producers in the United States dramatically reduced their spending as compared to the quantity of goods and services available at the time. This statement best represents this economic concept:
Overall spending sometimes gets out of line with the economy’s productive capacity.
Economists define an efficient use of resources as a situation in which:
all persons are made better off without making anyone worse off.
Equity means that:
everyone gets his or her fair share of the goods and services produced.
Florida schools offered cash bonuses to students who scored high on the state’s standardized exams. The cash bonuses are an example of which of the following economic principles?
People usually take advantage of opportunities to make themselves better off.
Gains from trade arise because of:
specialization in production.
How people choose among the alternatives available to them is:
the study of microeconomics.
If resources are scarce, it means that they:
cannot provide enough goods or services to satisfy all human material wants and needs.
If the price of gasoline rises and stays high for an extended period, we expect people to:
use more public transportation.
It is cheaper to produce corn in Kansas than in Death Valley, California, because corn needs a lot of water and moderate temperatures. This statement best represents this economic concept:
Resources should be used as efficiently as possible to achieve society’s goals.
Katherine has a physics exam tomorrow. However, a free lecture by one of her favorite authors is taking place this evening. Katherine decides to attend the lecture instead of studying for her exam. Which is a correct statement?
Katherine’s opportunity cost is the reduction in her physics exam grade as a result of not studying tonight plus what else she may have done with the money she used to get to the lecture event itself.