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| Scarcity is best defined as |
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Definition
| insufficient resources to satisfy unlimited wants |
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| because peoples wants are unlimited but resources are scarce |
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| economics is the study of |
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| how people use limited resources to try to satisfy unlimited wants |
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| economics is the study of |
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| how individuals and nations deal with the problem of scarcity |
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| Michigan has an abundant supply of fresh water. however an economist would consider it a scarce resources because |
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| water is limited relative to peoples unlimited wantss |
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| a resource is somthing that |
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| is used to produce goods and dervices |
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| in economics capital is defined as |
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| human creations used in the production process |
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| economists classify all of the following as capital except one. which is not capital |
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| a $20 bill in a firms petty cash drawer |
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| which of the following is an example of capital |
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| claims the residual after other resource suppliers are compensated |
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| because resources are scarce |
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| people must make choices among alternatives |
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| organizer who seeks profitable opportunites and is willing to accept risks |
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| the difference between a goo and a service is that |
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| a good is tangible and a service is not |
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Term
| goods and services are scarce because |
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Definition
| they are produced using scarce resources |
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| the expression theres no such thing as a free lunch means |
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Definition
| the resources used up in producing the lunch are not availbale to satisfy other wants |
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| the assumption that individuals act rationally implies that |
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Definition
| people implicitly calculate the costs and befits of an activity to decide if it is worthwhile |
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Definition
| concern for the welfare of others is consistent with the concept of self interest |
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| consumers need information to make good choices which of the following is correct regarding this information |
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Definition
| information is scarce and therefore valuabe |
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Term
| rational economic decision makers will make a change only if |
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Definition
| the expected marginal benefits exceeds expected marginal cost |
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Term
| in economics the term marginal usually refers to |
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Definition
| a small change in an economic variable |
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Term
| a rational decision maker compares the expected marginal cost to the expected marginal benefit of any activity |
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Definition
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| economic decision makers will continue to acquire information only as long as the expected additional benefit exceeds the expected additional cost of the information |
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| economist believe that people respond in a predictable way to changes in costs and benefits the term that best describes this phenomenon is |
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Definition
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Term
| a rational decision maker will take only those actions for which the expected marginal benefit |
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Definition
| is greater than or equal to the expected marginal cost |
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Term
| the behavior of the entertainment industry in detroit is a microeconomic topic |
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Definition
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Term
| macroeconomics is the study of |
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| the behavior of the economy as a whole |
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| in macroecomincs we analyze |
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| the overall performance of the economy as a whole |
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| simplify a complex reality |
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| simplifies reality in order to focu on its essential elements |
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| when constructing an economic model econmists |
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Definition
| must rely on simplifying assumptions that abstract from the complexity of the real world |
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Term
| economics employs a scientific methodology in part this means that |
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Definition
| economic hypotheses are tested to determine their validity |
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Term
| ceteris paribus means other things constant |
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Definition
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| the other things constant assumptions |
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Definition
| allows the economist to make useful predictions |
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Term
| which of the following is not a part of the scientific method in economics |
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Definition
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Term
| The assumption of rational self-interest means that economic decision makers |
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Definition
| make reasonable decisions based on their expectations of results |
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Term
| economists believe that individuals respond in a predictable way to changes in costs and benefits the term that describes this belief is |
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Definition
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Term
| which of the following is an example of a positive statement |
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Definition
| an increase in the price of gasoline will cause a reduction in the amount purchased |
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| a normative economic statement |
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Definition
| is a statement of what ought to be not what is |
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Term
| which of the following is an example of a normative statement |
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Definition
| women should earn the same income as men |
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Term
| the difference between positive economic statements and normative economic statements is that |
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Definition
| positive statements are based on fact while normative statements are based on pinion |
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| economists ofter focus on average behavior because it is easier to predict |
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Definition
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Term
| the association-causation fallacy is the error of assuming that what is true for one member of a group must be true for the group |
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Definition
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Term
| one problem with rent controls is that policy makers ofter ignore its secondary effects |
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Definition
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| your friend notices that us auto production and us population growth have moved together over several decades. he reasons that one way to slow population growth is for the government to order the auto makers to cut back on production you gently point out to him that he |
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Definition
| has mistakenly inferred causation from observed correlation |
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Term
| which of the following is not an example of fallacy of composition |
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Definition
| if the best tv reception can be gotten with a couch potato antenna then everyone should have a couch potato antenna |
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Term
| one of the difficulties with an economic policy such as rent control is that |
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Definition
| politicians do not consider its secondary effects |
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Term
| someone who commits the fallacy of composition is likely to assume that |
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Definition
| what is true for the individual is also true for the group |
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Term
| which of the following is true about entrepreneurs |
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Definition
| all of the answers are correct |
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Term
| step one in the scientific method is |
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Definition
| identify the question and define relevant variables |
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Term
| opportunity cost is always measured in dollar terms rather than in terms of real goods and services TorF |
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Definition
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Term
| opportunity cost is defined |
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Definition
| as the value of the best alternative not chased |
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Term
| the opportunity cost of an activity |
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Definition
| depends on the individuals subjective values and opinions |
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Term
| opportunity cost is objective therefore its value does not change as circumstances change |
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Definition
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Term
| the term opportunity cost suggests that |
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Definition
| because goods are scarce in order to get some good you must give up some other good s in return |
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Term
| the opportunity cost of a particular activity |
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Definition
| varies from person to person |
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Term
| it is possible for one person to have comparative advantages in the production of all products TorF |
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Definition
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