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Econ 190 > Test 1 > Flashcards

Test 1 Flashcards

1
Q

Scarcity exists because

A

human wants exceed the resources available to satisfy them.

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2
Q

Which of the following statements best describes the study of economics? Economics studies how

A

we make choices in the face of scarcity

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3
Q

Scarcity forces people to

A

choose among available alternatives

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4
Q

What is the reason that all economic issues and problems occur?

A

Human wants exceed the resources available to satisfy them

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5
Q

The study of economics is best described as a study of

A

coping with scarcity, and choices made as a result of scarcity in a society

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6
Q

Which of the following statements best describes the study of economics? Economics studies how

A

we make choices in the face of scarcity.

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7
Q

Microeconomics includes the study of the

A

choices made by individuals and businesses

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8
Q

The primary focus of microeconomics is

A

to examine the behavior and operation of the individual units or sectors that make up the economy

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9
Q

Which of the following is a microeconomic issue?

A

The price of gasoline increases in the United States this year

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10
Q

Macroeconomics is the study of

A

national or global economies

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11
Q

Which of the following is a topic studied in macroeconomics?

A

The effect on economic growth if the government raises taxes

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12
Q

When Ford decides to increase production of hybrid cars, it directly answers the ________ question

A

what

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13
Q

When a home builder decides to computerize all of its production schedule, it directly answers the ________ question

A

how

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14
Q

) When a third string NFL quarterback earns more than a police officer, society answers the ________ question.

A

for whom

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15
Q

Choices that are best for the individuals that make them are choices in pursuit of

A

self-interest

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16
Q

Choices that are best for the society as a whole are choices in pursuit of

A

the social interest.

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17
Q

Rational choice

A

is a choice that uses the available resources to best achieve the objective of the person making the choice

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18
Q

An opportunity cost is

A

the benefits of the highest-valued alternative forgone

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19
Q

If Jessie studies economics for two hours instead of going to the movies with her friends, then

A

the opportunity cost of studying is the missed movie

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20
Q

The value of the best thing that a person must give up when making a decision is known as the ________ cost.

A

opportunity

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21
Q

Ali decides to attend the one-hour review session for microeconomics instead of working at his job. His job pays him $10 per hour. Ali’s opportunity cost of attending the review session is

A

the $10 he could have earned at his job

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22
Q

Suppose that, instead of taking this test, you could either have worked and earned income or partied and had a pleasurable time. Your opportunity cost of taking the test is the

A

forgone working or partying, depending on which was your next best choice

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23
Q

The benefit from a good or service that you purchase is measured by

A

what you are willing to give up to obtain the good or service

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24
Q

Suppose you take a trip during spring break. To determine the benefit of taking the trip, you

A

measure what you are willing to give up to take the trip.

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25
The cost of a one-unit increase in an activity is called the
marginal cost
26
A professor changes the penalty for cheating on exams from getting a 0 on the exam to getting an F in
increased the marginal cost of cheating.
27
The benefit of a one-unit increase in an activity
decreases as you do more of it.
28
Huey has eaten two hamburgers and is considering a third. The marginal benefit in his decision is the pleasure from consuming
just the third hamburger
29
What typically happens to benefits as the amount of an activity is increased?
Marginal benefit decreases
30
A choice made by comparing all relevant alternatives systematically and incrementally is
a choice on the margin.
31
Making choices on the margin means
comparing all relevant alternatives systematically and incrementally
32
The decision to go to graduate school is a rational one for a college student if the
marginal benefit of graduate school exceeds the marginal cost.
33
An incentive is
a reward or a penalty that encourages or discourages an action.
34
A change in a marginal benefit or cost will
change incentives
35
Which of the following is a positive statement?
A recession leads to higher enrollments at universities
36
Which of the following is a normative statement?
Flood victims should pay for their own rebuilding.
37
Which of the following is an example of a normative economic statement?
Universal access to quality health insurance is the most important domestic policy issue of our time
38
Items that are purchased by individuals for their own enjoyment are called
consumption goods and services
39
Items bought by individuals to provide personal enjoyment are termed
consumption goods.
40
What would be an example of consumption good?
Jake buys an iPhone
41
Which of the following is a consumption good or service?
a personal computer purchased in order to play games at home
42
The largest share of total production in the United States is
consumption goods and services
43
Items bought by businesses to help produce other goods and services are called
capital goods
44
What would be an example of capital good?
Antonio, the manager of the local Taco Hut, purchases a new deep fryer
45
The difference between consumption and capital goods is that
capital goods are used to produce additional goods while consumption goods are not
46
Which of the following is NOT considered an example of a capital good?
a U.S. government bond
47
Goods and services bought by the government account for about ________ percent of total production.
17
48
What would be an example of government good?
The local driver's license office purchases a new digital camera and printer
49
Goods produced in the United States and sold in other countries are called
exports.
50
Computers and insurance coverage produced in the United States and sold to people in other nations are categorized as
U.S. exports of goods and services.
51
Which of the following correctly lists the categories of factors of production
land, labor, capital, and entrepreneurship
52
Which of the following is not considered a factor of production?
money
53
The productive resource that includes all the "gifts of nature" is called
land
54
As a factor of production, oil reserves are counted as
land
55
The concept of human capital describes
human skills, that is, the quality of labor
56
Human capital can be increased through
education, on-the-job training, and work experience.
57
Capital, as a factor of production, refers to
the tools and instruments used to produce other goods and services.
58
The total value of capital in the United States is around
$50 trillion
59
Capital is a factor of production. An example of capital as a factor of production is
machines
60
Payments to the factors of production are
rent, wages, interest, and profit or loss
61
The income paid for the use of land is called
rent
62
The income paid to labor is called
wages
63
Which factor of production is paid "interest"?
capital
64
Which factor of production is paid "profit"?
entrepreneurship
65
The functional distribution of income measures which of the following?
the distribution of earnings by the factors of production
66
The data show that more than 60 percent of the total income earned in the United States goes to
labor
67
The personal distribution of income measures which of the following?
the distribution of income among households
68
The richest 20 percent of individuals in the United States receive about ________ of the nation's total income.
51 percent
69
The emerging market economies are
in transition from state-owned production to free markets
70
) As a percentage of total world production, production in the 29 advanced economies is about ________ percent of total world production and in the 118 developing economies is about ________ percent of total world production
53; 39
71
Compared to the developing economies, the advanced economies have ________ human capital and ________ physical capital.
more; more
72
________ the owners of the factors of production, while ________ what amounts of those factors to hire
Households are; firms determine
73
The United States produced approximately ________ worth of goods and services in 2011.
$15 trillion
74
The production possibilities frontier illustrates the
maximum combinations of goods and services that can be produced
75
When drawing a production possibilities frontier, which of the following is held constant?
the available factors of production and the state of technology
76
Moving from one point to another on a production possibilities frontier implies
increasing the production of one good and decreasing the production of another.
77
Assume that an association of young workers has lobbied Congress to require that all workers retire once they reach the age of fifty. What impact would this law have on the nation's production possibilities frontier?
The production possibilities frontier would shift inward
78
When a nation is producing on its production possibilities frontier, if more resources are used to produce one good, then the production of other goods
must decrease
79
Comparative advantage is directly related to which of the following concepts?
opportunity cost
80
________ the owners of the factors of production, while ________ what amounts of those factors to hire.
Households are; firms determine
81
What two groups of decision makers are represented in the basic circular flow model?
households and firms
82
The circular flow model is used to show the
flow of expenditures and incomes in the economy
83
The circular flow model shows the
flow of expenditure and incomes that arise from the households', firms', and governments' decisions
84
The circular flow model shows that goods and services flow from
businesses to households
85
A money flow in the circular flow diagram is i) the government's collection of taxes. ii) Chevrolet's production of SUVs. iii) Nike's payment of wages to its workers
i and iii
86
A real flow in the circular flow diagram is i) a firm's payments of wages to its workers. ii) a household's purchase of a new car. iii) a farmer's use of land to grow corn.
ii and iii
87
In the circular flow model with the government sector, transfers
flow in the opposite direction as do taxes
88
Of the following, the largest single component of U.S. federal government expenditures is spent on
Medicare and Medicaid.
89
State and local governments finance expenditures mainly from
tax revenue

Econ 190 (2 decks)

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