Short Answer

Question 1

2.

Answer 1

Choices are nessecary because they pull a person in opposite directions. Both cannot be satisfied.

Question 2

3. Explain and

Answer 2

Because they pull people in opposite directions and cannot be satisfied.

Question 3

4. What is the difference between microeconomics and macroeconomics? Give examples of each.

Answer 3

Micro- choices made by individual units.

Macro- large scale economic choices.

Question 4

5. What character quality is essential for ten Christian to have victory over insatiability.

Answer 4

Contemptment

Question 5

6. What are the two purposes for economic models?

Answer 5

Instruction and prediction of future events

Question 6

7. For an economist, what is the primary value of a production possibilities curve?

Answer 6

A PPC enables the economist to see the maximum feasible amounts that a business can produce with its limited resource.

Question 7

8. Name the four factors of production or the four payments businesses make in exchange for the factors of production.

Answer 7

Land, labor, capital, entrepreneurship.

Rent, wages, interest, profit.

Question 8

9. Why is the financial market necessary for the effective functioning of a developed society?

Answer 8

Financial market takes the savings of households and channels them to businesses so that the financial capital can help business firms operate effectively.

Question 9

10. With what economic principle do we most often associate Ludwig vos Mises?

Answer 9

The free market

Question 10

11. Who identified the principle of diminishing marginal utility?

Answer 10

William Stanley Jevons

Question 11

12. State the law of demand

Answer 11

Everything else being held constant, the lower the price charged for a good or service, the greater the quantity people will demand and vice versa.

Question 12

13. When an individual makes a decision at the margin,

Answer 12

The individual chooses to obtain the amount at which the marginal benefit just offsets the marginal costs.

Question 13

14. What four conditions may change the demand for a product?

Answer 13

Change in people’s incomes
Change in price of related goods
Change in people’s tastes and preferences
Change in people’s expectations

Question 14

15. What are the three functions of prices?

Answer 14

Prices transmit info, provide incentives, and redistribute income.

Question 15

16. State the law of supply.

Answer 15

The higher the price the buyers are will
I got to pay, other things being constant, the greater the quantity a supplier will be willing to produce and the inverse is true.

Question 16

17. What occurs when the price of a product is higher than the price at which supply equals demand?

Answer 16

A surplus

Question 17

18. What is the simplest solution to a surplus?

Answer 17

The producer lowers the price until the he quantity demanded equals the quantity he has to supply.

Question 18

19. Which way does a supply curve slope and why?

Answer 18

Upward to the right, indicating that the greater the price buyers are willing to pay for the product, the greater quanity firms will be willing to supply.

Question 19

20. What three factors could lead to a change in supply?

Answer 19

Changes in technology,
Changes in production costs,
Changes in the prices of related goods.

Question 20

1.

Answer 20

Economic cost is the value people place on a good or service and is reflected by its price.
The satisfaction a person gives up or the regretted experience by not choosing differently.