TINSTAAFL refers to the theory that

There is no such thing as a free lunch

Important characteristics of the Market Economy include

1) owning private property, Answers 1 & 3

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

all prod. uses scarce resources & sacrifices alt. goods

How might point E be attained?

If improve. in tech occurred in computer OR farm sectors

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

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

Wide-spread private ownership of capital

If an economy produces its most wanted goods but uses outdated production methods, it is

not achieving productive efficiency

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

A decrease in capital equipment

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

making more of 1 good means other resources are sacrificed

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

What goods and services will be produced?

An opportunity cost is entailed in which of the following situations?

Every decision involves opportunity Cost!!

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 statements about the PPC is true?

Relative poisition of C & D reflect production alternatives

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

A recurring theme in economics is

People face limited resources with unlimited wants

A rational decision maker will choose to act only if

Marginal benefit ≥ marginal cost of the action

The two general types of economic systems that exist today are

Market systems & command systems

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

rental cars, computers at the car rental agency

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

An increase in capital equipment

Command economy characteristics include

government controls all factors of production

Unemployment and/or productive inefficiencies

are both illustrated by a point inside the PPC

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

Studies individuals & their decision making processes

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

The division of labor means that

workers specialize in various production tasks

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

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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 50

Answers

1
TINSTAAFL refers to the theory that
There is no such thing as free living
There is no such thing as a free lunch
There is no such thing as a fun life
All are true
2
To be considered scarce, an economic resource must be
Desirable and free
Desirable, useful, and free
Undesirable,useful, and limited
Desirable, Useful, and Limited
3
Important characteristics of the Market Economy include
1) owning private property
3)using technology
Answers 1 & 3
2) the government makes all of the decisions.
4
The assertion that "There is no free lunch" means that
marginal analysis is not used in economic reasoning
there are always tradeoffs between economic goals
choices need not be made if behavior is rational
all prod. uses scarce resources & sacrifices alt. goods
5
How might point E be attained?
If more scarce resources were used to produce farm products
If improve. in tech occurred in computer OR farm sectors
If firms decreased their output of computers
If country's resources were more fully employed
6
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
7
Which of the following is a distinguishing feature of a market system?
Wide-spread private ownership of capital
A circular flow of goods, resources, and money
Central planning
Public ownership of all capital
8
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
9
Mrs. Bauman receives Lake Property as a Economic Bonus. What is the Cost?
A) Zero, it was a gift
B) Upkeep, maintenance, utilities, etc.
Both B and C
C) How much she would get if she rented or sold the property.
10
The value of the best alternative forgone when a decision is made defines
Scarcity
Opportunity Cost
Economic Good
Tradeoff
11
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
Contradicts the economic perspective
Is an example of irrational behavior.
Implies reading should be taught through phonics
12
Which of the following is a distinguishing feature of a command system?
Private ownership of all capital
Central planning
Wide-spread dispersion of economic power
Heavy reliance on markets
13
If the country is producing at Point C, it can produce more computers by:
Moving to point A
Moving to point D
Moving to point B
Moving to point E
14
Which of the following would cause a leftward (inward) shift of the PPC?
A decrease in inflation
An increase in unemployment from 5% to 8%
A decrease in capital equipment
An increase in technolgoy
15
Which of the following is true of the concept of increasing opportunity costs?
Irrelevant if PPC is convex to the origin
Unlimited wants can be fulfilled
making more of 1 good means other resources are sacrificed
Unimportant in command economies due to central planning
16
The PPC of the country would most likely shift to the right if current production was at
Point E
Point C
Point A
Point B
17
In the Circular Flow Diagram, the 2 basic markets shown are
Free & controlled
Capital goods & consumer goods
Product & factor
Households & government
18
The output of an economic system is commonly divided into what 2 categories?
Goods & services
Wants & desires
Wants & needs
Money & wealth
19
Which of the following would not be considered one of society's economic resources?
Capital
Labor
Land
Money
20
Which of the following is an example of capital?
A share of IBM stock
A construction crane
A pair of stockings
A savings account
21
Which of the following is one of the Four Fundamental Questions?
How much should the society save?
Who should appoint the head of the central bank?
What goods and services will be produced?
Which products will be scarce and which in excess supply?
22
An opportunity cost is entailed in which of the following situations?
When you go to the movies instead of studying
Every decision involves opportunity Cost!!
You become a surgeon instead of a Wal - Mart greeter
You buy popcorn at the movies
23
Which of the following violates the economic concept of matching MB with MC in test taking?
All violate the concept of matching MB with MC
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!
24
Which of the following goods can be considered scarce?
Air
Polio
Pollution
Water
25
Which of the following statements about the PPC is true?
Point A is not attainable in a developed society
Point D is not attainable given the society's resources
Full employment will move the PPC to the right closer to E
Relative poisition of C & D reflect production alternatives
26
According to the theory of comparative advantage, a good should be produced where
The cost of real resources used is least
Its opportunity costs are least
Its explicit costs are least
Production can occur with the lowest increase in employment
27
Now that Bob only packages burgers and Sue the fries, they can serve twice as many. This is
Scarcity
Traditional Economy
Comparative Advantage
Command Economy
28
The study of economics is primarily concerned with which of the following?
Provision of conclusive answer to public policy issues
Testing of hypotheses under controlled conditions
Allocation of scarce resources, given unlimited wants
Fair & equal treatment of all households
29
Economists measure the true cost of a good or service by its
Value
Intrinsic value
Dollar price
Opportunity cost
30
A recurring theme in economics is
People face limited resources with unlimited wants
People have unlimited wants in face of unlimited resources
People have limited wants in face of unlimited resources
There are more resources than wants
31
A rational decision maker will choose to act only if
Marginal benefit ≥ marginal cost of the action
Marginal benefit > average cost of the action
Marginal benefit < average cost of the action
Average benefit < average cost of the action
32
The two general types of economic systems that exist today are
Market systems & command systems
Market systems & capitalism
Laissez faire systems & pure command systems
Socialism & central planning
33
Which of the following lists includes only capital resources (no labor or land resources)?
owner of a startup firm, chemistry lab, a researcher
ice arena, pro hockey player, hockey uniforms
rental cars, computers at the car rental agency
hydroelectric dam, water behind the dam, power lines
34
Which of the following would cause an outward or rightward shift of the PPC?
An increase in capital equipment
An increase in unemployment
A decrease in natural resources
A decrease in the number of workers
35
Adam Smith's economic theory is called
Demographic Transition
Absolute Advantage
Supply Side Economics
The Invisible Hand
36
Command economy characteristics include
government controls all factors of production
private ownership
kind dictators
equity for all!
37
Unemployment and/or productive inefficiencies
are both illustrated by a point inside the PPC
are both illustrated by a point outside the PPC
can exist at any point on a PPC
cause the PPC to shift outward
38
Economics is characterized as a Social Science instead of a "hard" science because it
Studies individuals & their decision making processes
Studies money & decision making of financial institutions
Investigates fiscal & monetary policy
Does not use the scientific method
39
Examples of command economies are
Mexico & Brazil
Cuba & North Korea
The United States & Japan
Sweden & Norway
40
Which of the following equations best defines the economic problem of scarcity?
Wants = Resources
Wants > Resources
Resources > Wants
Wants < Resources
41
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
C
A
E
42
Which of the following is NOT a factor of production?
Land
Labor
Free Goods
Capital
43
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
44
To be considered scarce, an economic resource must be
Desirable, and useful only
Desirable & Limited only
Desirable, Free, and useful
Useful, desirable, and limited
45
Which of the following is a land resource?
A machine for detecting earthquakes
Natural gas
A farmer
An oil drilling rig
46
Of the three economic systems, this system allows people more freedom and choice:
Command Economies
Socialist Economies
Traditional Economies
Market Economies
47
Which problems do all economic systems face?
scarcity
scarcity and the right to arm themselves
scarcity and The 3 Questions
Government Interdependence
48
Which of the following is true if the PPC is concave to the origin?
The price of the two products is the same
Both products are equally able to satisfy consumer wants
It's possible to produce more of both goods.
As more of 1 is made, more & more of the other is given up
49
The term laissez faire suggests that
Natural resources publicly owned; capital privately owned
Natural resources be privately owned; capital publicly owned
Govt. should not interfere with the operation of the economy
Govt. action necessary for economy to reach full production
50
The term ceteris paribus means:
Hold everything else constant
Go Forward in Positive economics
Change the land & resources
Change all of the factors of Production

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