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2021_CA_MICRO_CHAP 1_14 QUESTIONS Flashcards | StudBud
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2021_CA_MICRO_CHAP 1_14 QUESTIONS
2021_CA_MICRO_CHAP 1_14 QUESTIONS
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The basics of economics
Flashcards
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Questions
14
Answers
1
What is an example of a market failure?
Inflation
Equality
Externality
Efficiency
2
comparing the marginal costs and marginal benefits of each decision (cost-benefit analysis)
sunk costs
thinking at the margin
explicit costs
implicit costs
3
The opportunity cost of an item is
what you got in the transaction
usually more than a dollar
What you give up to get the item
usually less than a dollar
4
What is the difference between shortage and scarcity?
a shortage results from rising prices, scarcity from falling
a shortage can be temporary but scarcity always exists
a shortage is a lack of goods, scarcity is a single item
there is no difference between a shortage and scarcity
5
The government should promote policies that increase economic__________ to promote growth
productivity
equality
equity
none of these
6
Why does every decision involve trade-offs?
incomes are not equal
decisions are all different
everyone has to make decisions
resources are limited
7
The government printing too much money usually leads to
inflation
noflation
deflation
stagflation
8
Why are all goods and services scarce?
all resources are scarce
Some goods cost more than others
some things are needs and others are wants
some people want to have more goods than others
9
society is getting the maximum benefits from its scarce resources.
efficiency
equity
spread the wealth
equality
10
Which of the following best describes the relationship between trade-offs and opportunity cost
Opportunity costs are the opposite of trade-offs
Trade-offs lower the opportunity costs of a decision
Opportunity costs are incurred when trade-offs are made
Trade-offs occur when there are no opportunity costs
11
The person responsible for "the invisible hand"
Vladimir Lenin
Karl Marx
Adam Smith
Joseph Stalin
12
The adage, "There is no such thing as a free lunch," means people face trade-offs
False
True
13
In free markets, it is essential that the government...
control the media
enforce private property rights
institute a lot of regulations
Make war
14
A rational decision maker takes action only if marginal cost outweighs marginal benefit
true
false
