For the data in the table below, increasing opportunity costs is reflected in the fact that

Constant amt. of capital gds. are lost to incr. consumer gds

TINSTAAFL refers to the theory that

There is no such thing as a free lunch

Even though local newspapers are inexpensive, people rarely buy more than 1 per day. This fact:

Implies that the MB of reading a 2nd newspaper < the MC

Which of the following is a distinguishing feature of a market system?

Wide-spread private ownership of capital

Which of the following is true if the PPC is concave to the origin?

As more of 1 is made, more & more of the other is given up

The term laissez faire suggests that

Govt. should not interfere with the operation of the economy

Which of the following is true of the concept of increasing opportunity costs?

making more of 1 good means other resources are sacrificed

According to the theory of comparative advantage, a good should be produced where

Its opportunity costs are least

The study of economics is primarily concerned with which of the following?

Allocation of scarce resources, given unlimited wants

Which of the following statements about the PPC is true?

Relative poisition of C & D reflect production alternatives

Which of the following lists includes only capital resources (no labor or land resources)?

rental cars, computers at the car rental agency

Unemployment and/or productive inefficiencies

are both illustrated by a point inside the PPC

The assertion that "There is no free lunch" means that

all prod. uses scarce resources & sacrifices alt. goods

A rational decision maker will choose to act only if

Marginal benefit ≥ marginal cost of the action

How might point E be attained?

If improve. in tech occurred in computer OR farm sectors

Economics is characterized as a Social Science instead of a "hard" science because it

Studies individuals & their decision making processes

The two general types of economic systems that exist today are

Market systems & command systems

Which of the following is one of the Four Fundamental Questions?

What goods and services will be produced?

In the table below, a total output of 6 units of capital goods and 4 units of consumer goods:

None, it would be inside the curve

Which of the following violates the economic concept of matching MB with MC in test taking?

Most grades are B-; I will only study Econ where I have an A

Which of the following would cause an outward or rightward shift of the PPC?

An increase in capital equipment

If an economy produces its most wanted goods but uses outdated production methods, it is

not achieving productive efficiency

The division of labor means that

workers specialize in various production tasks

Which of the following would cause a leftward (inward) shift of the PPC?

A decrease in captial equipment

A recurring theme in economics is

People face limited resources with unlimited wants

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Introduction to Micro

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Introductory Microeconomics AP review of vocabulary. 1 - 30 questions are useful for college prep econ. #opportunitycost #vocabularyreview

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Questions 49

Answers

1
For the data in the table below, increasing opportunity costs is reflected in the fact that
Must lose consumer gds. to get more capital gds.
Constant amt. of capital gds. are lost to incr. consumer gds
The graph would be a straight down-sloping line
Economy's resources are presumed to be scarce
2
The output of an economic system is commonly divided into what 2 categories?
Wants & desires
Wants & needs
Money & wealth
Goods & services
3
Of the three economic systems, this system allows people more freedom and choice:
IV & V only
I and II only
II and III only
III & IV only
4
TINSTAAFL refers to the theory that
There is no such thing as a free lunch
There is no such thing as free living
There is no such thing as a fun life
All are true
5
To be considered scarce, an economic resource must be
Undesirable,useful, and limited
Desirable, useful, and free
Desirable and free
Desirable, Useful, and Limited
6
Even though local newspapers are inexpensive, people rarely buy more than 1 per day. This fact:
Implies reading should be taught through phonics
Is an example of irrational behavior.
Contradicts the economic perspective
Implies that the MB of reading a 2nd newspaper < the MC
7
Which of the following is a distinguishing feature of a market system?
Wide-spread private ownership of capital
Central planning
A circular flow of goods, resources, and money
Public ownership of all capital
8
Which of the following is a land resource?
A farmer
An oil drilling rig
A machine for detecting earthquakes
Natural gas
9
Adam Smith's economic theory is called
Demographic Transition
Absolute Advantage
The Invisible Hand
Supply Side Economics
10
Which of the following is true if the PPC is concave to the origin?
It's possible to produce more of both goods.
Both products are equally able to satisfy consumer wants
The price of the two products is the same
As more of 1 is made, more & more of the other is given up
11
The term laissez faire suggests that
Natural resources publicly owned; capital privately owned
Govt. action necessary for economy to reach full production
Natural resources be privately owned; capital publicly owned
Govt. should not interfere with the operation of the economy
12
Command economy characteristics include
I, II, III, IV
I, II only
I only
I, II, III only
13
Examples of command economies are
Mexico & Brazil
Sweden & Norway
Cuba & North Korea
The United States & Japan
14
Which of the following is true of the concept of increasing opportunity costs?
Unlimited wants can be fulfilled
Unimportant in command economies due to central planning
making more of 1 good means other resources are sacrificed
Irrelevant if PPC is convex to the origin
15
According to the theory of comparative advantage, a good should be produced where
The cost of real resources used is least
Production can occur with the lowest increase in employment
Its explicit costs are least
Its opportunity costs are least
16
TAMU inherited a large mansion and plans to use it for faculty parties. The cost to TAMU is:
Both B and C
How much UTK would get if mansion is rented or sold
Upkeep, maintenance, utilities, etc.
Zero, it was a gift
17
The study of economics is primarily concerned with which of the following?
Fair & equal treatment of all households
Provision of conclusive answer to public policy issues
Allocation of scarce resources, given unlimited wants
Testing of hypotheses under controlled conditions
18
Which of the following is NOT a factor of production?
Land
Capital
Free Goods
Labor
19
Which of the following statements about the PPC is true?
Point D is not attainable given the society's resources
Relative poisition of C & D reflect production alternatives
Full employment will move the PPC to the right closer to E
Point A is not attainable in a developed society
20
Which of the following lists includes only capital resources (no labor or land resources)?
ice arena, pro hockey player, hockey uniforms
owner of a startup firm, chemistry lab, a researcher
rental cars, computers at the car rental agency
hydroelectric dam, water behind the dam, power lines
21
Which of the following goods can be considered scarce?
Polio
Pollution
Water
Air
22
Unemployment and/or productive inefficiencies
are both illustrated by a point inside the PPC
cause the PPC to shift outward
are both illustrated by a point outside the PPC
can exist at any point on a PPC
23
The value of the best alternative forgone when a decision is made defines
Tradeoff
Opportunity Cost
Scarcity
Economic Good
24
The assertion that "There is no free lunch" means that
there are always tradeoffs between economic goals
all prod. uses scarce resources & sacrifices alt. goods
choices need not be made if behavior is rational
marginal analysis is not used in economic reasoning
25
Economists measure the true cost of a good or service by its
Dollar price
Value
Opportunity cost
Intrinsic value
26
A rational decision maker will choose to act only if
Marginal benefit > average cost of the action
Marginal benefit ≥ marginal cost of the action
Average benefit < average cost of the action
Marginal benefit < average cost of the action
27
How might point E be attained?
If more scarce resources were used to produce farm products
If country's resources were more fully employed
If firms decreased their output of computers
If improve. in tech occurred in computer OR farm sectors
28
Economics is characterized as a Social Science instead of a "hard" science because it
Investigates fiscal & monetary policy
Studies individuals & their decision making processes
Studies money & decision making of financial institutions
Does not use the scientific method
29
Which problems do all economic systems face?
scarcity and The 3 Questions
scarcity
scarcity and the right to arm themselves
Government Interdependence
30
The two general types of economic systems that exist today are
Market systems & command systems
Socialism & central planning
Laissez faire systems & pure command systems
Market systems & capitalism
31
Important characteristics of the Market Economy include
I, II, III only
I, II, IV only
I, II only
I, II, III, IV
32
To be considered scarce, an economic resource must be
Useful, desirable, and limited
Desirable & Limited only
Desirable, Free, and useful
Desirable, and useful only
33
Which of the following is one of the Four Fundamental Questions?
Which products will be scarce and which in excess supply?
What goods and services will be produced?
How much should the society save?
Who should appoint the head of the central bank?
34
In the table below, a total output of 6 units of capital goods and 4 units of consumer goods:
C
E
A
None, it would be inside the curve
35
Which of the following would not be considered one of society's economic resources?
Land
Labor
Capital
Money
36
Which of the following violates the economic concept of matching MB with MC in test taking?
I have a B-, final counts 50%, going to study more for this
Most grades are B-; I will only study Econ where I have an A
I have an A, final is optional, not going to take it!
All violate the concept of matching MB with MC
37
Which of the following is an example of capital?
A savings account
A construction crane
A share of IBM stock
A pair of stockings
38
Which of the following would cause an outward or rightward shift of the PPC?
An increase in capital equipment
A decrease in the number of workers
An increase in unployment
A decrease in natual resources
39
Which of the following is a distinguishing feature of a command system?
Wide-spread dispersion of economic power
Central planning
Heavy reliance on markets
Private ownership of all capital
40
The PPC of the country would most likely shift to the right if current production was at
Point C
Point E
Point B
Point A
41
If an economy produces its most wanted goods but uses outdated production methods, it is
engaged in "roundabout" production
not achieving productive efficiency
achieving both productive & allocative efficiency
productively efficient but not allocatively efficient
42
The term ceteris paribus means:
III only
III & IV only
I only
I & II only
43
An opportunity cost is entailed in which of the following situations?
III only
I only
I, II, & III
II only
44
The division of labor means that
each worker performs a large number of tasks
labor markets are geographically segmented
workers specialize in various production tasks
unskilled workers outnumber skilled workers
45
Which of the following equations best defines the economic problem of scarcity?
Resources > Wants
Wants < Resources
Wants > Resources
Wants = Resources
46
If the country is producing at Point C, it can produce more computers by:
Moving to point E
Moving to point D
Moving to point B
Moving to point A
47
Now that Bob only packages burgers and Sue the fries, they can serve twice as many. This is
Scarcity
Command Economy
Traditional Economy
Comparative Advantage
48
Which of the following would cause a leftward (inward) shift of the PPC?
An increase in technolgoy
A decrease in captial equipment
A decrease in inflation
An increase in unemployment from 5% to 8%
49
A recurring theme in economics is
People have limited wants in face of unlimited resources
People face limited resources with unlimited wants
There are more resources than wants
People have unlimited wants in face of unlimited resources

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