What is the best example of thinking at the margin?

I have six shirts and am deciding whether to buy a seventh

What does it mean to say that free markets are efficient?

buyers and sellers trade until both are satisfied

A limitation to using graphs is that they

leave out factors other that what is being graphed

What is the law of unintended consequences?

Actions often have unforeseen consequences

What is the best test of an economic model?

It can help explain past events and predict future events

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Econ Chapter 1

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A #quick #quiz to introduce the #basics of what #economics is all about.

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Questions 11

Answers

1
What is the best example of thinking at the margin?
I observe that prices of movies have gone up since last year
deciding to work vs. volunteer
I want to buy a car but discover I cannot afford insurance
I have six shirts and am deciding whether to buy a seventh
2
Which term is most closely related to tradeoffs?
margin
scarcity
markets
incentives
3
Who is the father of modern economics?
Adam Smith
Joe Rogan
Jean-Jacques Rousseau
Franz Ferdinand
4
Which statement is an example of normative economics?
"The bond market is in decline."
"Speculation caused a recession."
"Taxes ought to be lowered."
"Inflation is higher this year."
5
People choose something when it is expected costs are less than its
required benefits
working life
chief competitors
anticipated benefits
6
T or F: the future consequences count principle means that people ignore the future effect
true
false
7
What does it mean to say that free markets are efficient?
decisions are made quickly with little confusion
information is communicated around the world
Everyone is assured of getting basic necessities
buyers and sellers trade until both are satisfied
8
A limitation to using graphs is that they
leave out factors other that what is being graphed
are hard for anyone but economists to interpret
typically show variables that aren't important
must be presented in a small space
9
What is the law of unintended consequences?
Actions often have unforeseen consequences
Attempts to intervene always backfire
Economic booms are always followed by downturns
Markets are always influenced by emotional factors
10
Which of the following is not a market?
an online auction site
a high school classroom
a large appliance store
a neighborhood garage sale
11
What is the best test of an economic model?
It helps people make decisions more easily
It has gone unchallenged for decades
It can help explain past events and predict future events
It is accepted by both major political parties.

Econ Chapter 1 Flashcards | StudBud