Micro Test Review 1

A good or service is considered scarce if

One of the most centrally planned economies in the world today is found in

The U.S. economy is best characterized as

Which of the following statements regarding the basic economic problem of scarcity is correct?

If demand for personal computers increases as a result of an increase in income,

In economics, capital is defined as

Microeconomics is the study of

A point outside the production possibilities frontier

Normative economic statements refer to what should be.

Recognizing the incentive power of property rights and markets, the most die-hard central planners are now allowing

The law of comparative advantage does not apply to

If we say that demand has increased, we mean that there has been

The law of increasing opportunity cost explains why

Which of the following is true of an increase in quantity supplied of a given good?

If I trade a ginger snap for a chocolate chip cookie, I am engaging in

Each point along a nation's production possibilities frontier represents efficient use of all resources.

Choices made by economic decision makers

The slope of the demand curve for a normal good must be positive.

Secondary effects are consequences of economic actions that develop slowly over time as people react to events.

Which economic question does the decision to give all of the butter the economy produces to the homeless answer?

An economist would classify 100 shares of Apple Computer stock as capital.

If a decrease in the price of a good causes a rightward shift of demand curve for that good, then it an inferior good.

On a given production possibilities frontier, which of the following is not assumed to be fixed?

If an economy is operating at a point inside the production possibilities frontier, then

A normative economic statement

Goods and services are exchanged in