Macroeconomics Test 1 Flashcards
Ramona’s Pizza should produce the amount of pizzas such that
the price of a pizza is equal to the marginal cost
Freidrich Hayek said
the dispute is about whether planning is done by the one or by the many
For a company that makes both large and small cars, CAFE standards cause the social gain from production of
large cars and small cars to fall
We desire the economy to advance so that we can
have as much output as possible with as little effort as possible
Because cows are better at producing milk that producing missiles, the production possibilities frontier of the goods “milk” and “missiles”
is a bowed outward downward sloping line
The way that an economy chooses a point on the production possibilities frontier is
b. by consumers and producers weighing costs and values in a market economy c. by command in an authoritarian economy d. b and c
Bastiat’s example shows that for those who want trade surpluses, the best thing that can happen is if
ships carrying exports sink
When we place an import quota on a good
b.
domestic consumers lose
c.
there is an overall loss to society
If one owns a unit of something, we measure its value by the
least one is willing to accept in order to give up the unit