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Econ 102 > Test One > Flashcards

Test One Flashcards

1
Q

Scarcity exists because

A

A) human wants exceed the resources available to satisfy them.

Answer: A

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2
Q

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

A

C) we make choices in the face of scarcity.

Answer: C

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3
Q

Scarcity forces people to

A

A) choose among available alternatives.

Answer: A

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4
Q

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

A

D) Human wants exceed the resources available to satisfy them.

Answer: D

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5
Q

The study of economics is best described as a study of

A

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

Answer: D

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6
Q

Microeconomics includes the study of

A

C) choices made by individuals and businesses.

Answer: C

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7
Q

The primary focus of microeconomics is

A

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

Answer: B

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8
Q

Which of the following is a microeconomic issue?

A

A) The price of gasoline increases in the United States this year.

Answer: A

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9
Q

Macroeconomics is the study of

A

B) national or global economies.

Answer: B

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10
Q

Which of the following is a topic studied in macroeconomics?

A

B) The effect on economic growth if the government raises taxes

Answer: B

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11
Q

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

A

A) what

Answer: A

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12
Q

When Delta decides to quit flying to Lithuania, it directly answers the ________ question.

A

A) what

Answer: A

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13
Q

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

A

D) how

Answer: D

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14
Q

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

A

A) for whom

Answer: A

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15
Q

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

A

D) self-interest.

Answer: D

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16
Q

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

A

B) the social interest.

Answer: B

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17
Q

Rational choice

A

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

Answer: A

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18
Q

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

A

self-interest

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19
Q

Rational choice

A

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

Example sentence: Making a rational choice involves weighing the pros and cons of each option.

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20
Q

An opportunity cost is

A

the benefits of the highest-valued alternative forgone.

Example sentence: Understanding opportunity cost is essential for making informed decisions.

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21
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.

Example sentence: Jessie’s decision to study economics instead of going to the movies demonstrates opportunity cost in action.

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22
Q

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

A

opportunity

Example sentence: Calculating opportunity cost helps individuals make informed choices.

23
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.

Example sentence: Ali’s opportunity cost is calculated based on his next best alternative.

24
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.

Example sentence: Understanding opportunity cost involves evaluating the alternatives foregone.

25
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.

Example sentence: Measuring the benefit of a purchase involves considering the sacrifices made to acquire the item.

26
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.

Example sentence: Calculating the benefit of a trip involves evaluating the sacrifices made to enjoy the experience.

27
Q

The cost of a one-unit increase in an activity is called the

A

marginal cost.

Example sentence: Understanding marginal cost helps individuals analyze the additional expenses incurred with each unit increase.

28
Q

A professor changes the penalty for cheating on exams from getting a 0 on the exam to getting an F in the course. The professor has

A

increased the marginal cost of cheating.

Example sentence: By changing the penalty, the professor altered the consequences and raised the cost of cheating.

29
Q

The benefit of a one-unit increase in an activity

A

decreases as you do more of it.

Example sentence: Understanding how benefits change with increased activity levels is crucial for decision-making.

30
Q

Huey has eaten two hamburgers and is considering a third. The marginal benefit in his decision is the pleasure from consuming

A

just the third hamburger.

Example sentence: Huey’s marginal benefit calculation focuses solely on the enjoyment derived from the next hamburger.

31
Q

What typically happens to benefits as the amount of an activity is increased?

A

Marginal benefit decreases.

Example sentence: As activity levels rise, the additional benefit derived from each unit tends to diminish.

32
Q

What typically happens to benefits as the amount of an activity is increased?

A

Marginal benefit decreases.

33
Q

A choice made by comparing all relevant alternatives systematically and incrementally is

A

A choice on the margin.

34
Q

Making choices on the margin means

A

Comparing all relevant alternatives systematically and incrementally.

35
Q

The decision to go to graduate school is a rational one for a college student if the

A

Marginal benefit of graduate school exceeds the marginal cost.

36
Q

An incentive is

A

A reward or a penalty that encourages or discourages an action.

37
Q

A change in a marginal benefit or cost will

A

Change incentives.

38
Q

Which of the following is a positive statement?

A

A recession leads to higher enrollments at universities.

39
Q

Which of the following is a normative statement?

A

Flood victims should pay for their own rebuilding.

40
Q

Which of the following is an example of a normative economic statement?

A

Universal access to quality health insurance is the most important domestic policy issue of our time.

41
Q

Items that are purchased by individuals for their own enjoyment are called

A

Consumption goods and services.

42
Q

Items bought by individuals to provide personal enjoyment are termed

A

Consumption goods.

43
Q

What would be an example of consumption good?

A

Jake buys an iPhone.

44
Q

Which of the following is a consumption good or service?

A

A personal computer purchased in order to play games at home.

45
Q

The largest share of total production in the United States is

A

Consumption goods and services.

46
Q

Items bought by businesses to help produce other goods and services are called

A

Capital goods.

47
Q

Items bought by businesses to help produce other goods and services are called

A

capital goods

Answer: B

48
Q

What would be an example of capital good?

A

Antonio, the manager of the local Taco Hut, purchases a new deep fryer.

Answer: C

49
Q

The difference between consumption and capital goods is that

A

capital goods are used to produce additional goods while consumption goods are not.

Answer: B

50
Q

Which of the following is NOT considered an example of a capital good?

A

a U.S. government bond

Answer: D

51
Q

Goods and services bought by the government account for about ________ percent of total production.

A

17

Answer: C

52
Q

What would be an example of government good?

A

The local driver’s license office purchases a new digital camera and printer.

Answer: B

53
Q

Goods produced in the United States and sold in other countries are called

A

exports

Answer: A

Econ 102 (2 decks)

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