Economics - Micro Flashcards
Who wrote the Wealth of Nations?
Adam Smith
(considered the Father of Economics)
Economics is Most concerned with the tension between?
wants and resources
Scarcity implies:
trade-offs
Opportunity cost could be Best described as the?
value of the next best alternative
Which of the following costs are least likely to be considered part of the cost of college?
tuition, room & board, university fees, foregone labor income, books
room & board
If consumers select the action that produces the greatest benefit, they are said to be
rational
Gains from trade arise most directly from different?
opportunity costs
Sophie can either babysit for $10, mow the lawn for $15, or drive her brother to soccer practice for $12. What is Sophie’s opportunity cost if she chooses to mow the lawn?
$10
The number of items in an average supermarket is Closest to?
30,000
What must be true if two consumers voluntarily trade with each other?
The benefits outweigh the costs for both people
Jasmine went to a movie with her friends instead of taking a shift at work. Which economic concept does this situation involve?
trade-offs
Benjamin received a few ticket to a baseball game. What is his opportunity cost for going to the game?
the time not spent doing something else
Langston is experienced in catching fish, while Brandon bakes exceptional bread. They decide to specialize. Which economic concept does this situation involve?
gains from trade
People who engage in mutually beneficial trade are least likely to have different?
wants
(they will trade because they do have different abilities, interests, resources, and opportunity costs)
Economic analysis least relies on:
theory, speculation, description, observation, measurement
speculation
Economic models could be best described as?
simplistic
Positive economics is most concerned with?
identifying cause-and-effect relationships
Unlike positive economics, normative economics combines economic analysis with?
value judgments
Pareto efficiency requires that
there is no way to improve at least one person’s well-being without reducing another person’s well-being (only way to do it is a redistribution of wealth)
Leticia, Jose, and Maya are sharing a pizza with 9 slices. Which of the following arrangements is NOT Pareto efficient?
Jose eats 2 slices, while Leticia and Maya eat 3 each
Leticia eats all 9 slices
Leticia, Jose, and Maya each eat 3 slices
Maya eats 5 slices, while Jose and Leticia each 2 each
Leticia eats 6 slices and Jose eats 3 slices
Jose eats 2 slices, while Leticia and Maya eat 3 each
Which branch of economics can we use to determine which distribution of goods is best?
Normative economics
Microeconomics is most concerned with?
individual behavior
What would a macroeconomist most likely study?
price of gasoline, gross domestic product, income distribution, municipal regulations, world trade
gross domestic product
Micro and macro economics rae most similar in their
assumptions about human behavior