Set 1 - Chapters 1 & 2 Flashcards
A new fast-food restaurant offered a free meal (valued at $5) a week for a year to its first 100 customers. Ramona camped out for 48 hours before the opening to be one of the first 100 customers. The cost of the free meal a week for a year for Ramona was:
A) zero.
B) $260.
C) whatever she would have done with those 48 hours.
D) $5
whatever she would have done with those 48 hours
Which statement is a normative economic statement?
A) Government has grown too large and should be reduced.
B) There has been an increase in the rate of inflation.
C) Government is subject to the same rules as all other institutions.
D) The money supply grew by 3% last year.
Government has grown too large and should be reduced.
In the circular-flow diagram, a firm is:
A) an organization that produces goods or services for sale.
B) an individual or a group of people who share their income.
C) an organization that sells factors of production.
D) an organization that purchases goods and services.
an organization that produces goods or services for sale.
As long as people have different _____, everyone has a comparative advantage in something.
A) direct costs
B) benefits
C) utility
D) opportunity costs
opportunity costs
People have to make choices because:
A) they have unlimited income.
B) resources are scarce.
C) resources are infinite
D) with good planning, trade-offs can be avoided.
resources are scarce.
Which subject would be studied in macroeconomics?
A) the change in automobile sales due to a change in the price of automobiles
B) the impact of a tax reduction on the profits of an individual business
C) recessions
D) the unemployment of workers displaced by technological change in the typesetting
industry
recessions
Households buy goods and services in the:
A) factor markets.
B) product markets.
C) resource markets.
D) financial markets.
product markets
Specialization and trade should lead to all of these options EXCEPT:
A) individuals learning specific skills
B) a decrease in total economic output.
C) higher living standards.
D) the exchange of goods and services in markets.
a decrease in total economic output
If resources are “scarce,” it means that they:
A) cannot provide enough goods or services to satisfy all human material wants and needs.
B) have no opportunity cost.
C) are probably not valued by consumers.
D) have an unlimited supply.
cannot provide enough goods or services to satisfy all human material wants and needs.
An economy is said to have a comparative advantage in the production of one good if it:
A) can produce more of all goods than another economy.
B) can produce less of all goods than another economy.
C) has the highest opportunity cost for producing a particular good.
D) has the lowest opportunity cost for producing a particular good.
has the lowest opportunity cost for producing a particular good.
Jim being paid $7.25 an hour to work at a restaurant is an example in the circular flow of a:
A) business selling goods and services in the product market.
B) household buying goods and services in the product market.
C) household buying goods and services in the factor market.
D) household selling a resource in the factor market.
household selling a resource in the factor market.
The production possibility frontier will shift outward for all of these reasons EXCEPT:
A) an increase in the unemployment rate.
B) an increase in the labor force.
C) an improvement in technology.
D) an increase in worker productivity.
an increase in the unemployment rate
An example of a positive statement is:
A) the rate of unemployment is 4%.
B) a high rate of economic growth is the most important goal for the country.
C) everyone in the country should be covered by national health insurance.
D) baseball players should not be paid higher salaries than the president of the United States.
the rate of unemployment is 4%
You can spend $100 on either a new economics textbook or a new CD player. If you choose to buy the new economics textbook, the opportunity cost is:
A) $100.
B) your enjoyment of the new CD player.
C) both the $100 and your enjoyment of the new CD player.
D) the economics textbook.
your enjoyment of the new CD player
Intel finds it difficult to hire enough skilled computer engineers. This statement best represents this economic concept:
A) Resources are scarce.
B) The real cost of something is what you must give up to get it.
C) Economists may disagree due to differences in their political views.
D) Economic models are simplified representations of reality.
Resources are scarce
