What do we do when we maximize the utility of our decisions?

We make the decisions that we expect will make us better off

What does every point outside a PPF represent?

an unattainable production possibility

Which scenario would be an example of the law of diminishing marginal utility?

eating the last slice of a large pizza with all the toppings

When does a shortage end? When does scarcity end?

when supply is replenished / never

To an economist, the word capital includes

Tools, machines, buildings used in the production of goods

Which scenario best illustrates the law of diminishing marginal utility?

Josh's 10th hotdog doesn't taste as good as the first one

physical objects produced for sale.

What does it mean to maximize utility?

to gain the most satisfaction possible

What causes a shortage?

Temporary increase in demand for a particular good/service

The opportunity cost of a decision is

the value of the next best thing you gave up for your choice

What do economists mean when they use the word "land"?

natural resources used to produce goods and services

An economic model, in the form of a line graph, shows how an economy produces two goods is

a production possibilities frontier.

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Econ Alive Ch 2

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Review of Chapter 2 Econ Alive

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Questions 19

Answers

1
What do we do when we maximize the utility of our decisions?
We make decisions that decrease our standard of living.
We make the decisions that we expect will make us better off
We make the decisions that will only give us pleasure.
We make the easiest choice, regardless if it will benefit us
2
Amy returns a book without finishing to avoid a late fee. What's her opportunity cost?
paying for something else
finishing the book
paying the fee
reading a different book
3
What does every point outside a PPF represent?
a growing economy
a less efficient, but attainable, production possibility
an unattainable production possibility
a shrinking economy
4
Which scenario would be an example of the law of diminishing marginal utility?
putting on a warm coat when it's cold outside
eating the last slice of a large pizza with all the toppings
drinking your first glass of juice after a strenuous workout
a homeless person picking a dollar bill up from the sidewalk
5
What is the best title for this list: innovator• strategist• risk taker?
Capitalist
Investor
Laborer
Entrepreneur
6
Why are tradeoffs necessary?
People want different things.
Advertisers promote products.
Every product has flaws.
Resources are limited.
7
When does a shortage end? When does scarcity end?
when you notice you are low on something / when the shortage is corrected
when supply is replenished / never
when a deadline is met / when someone realizes it
when you change you needs / when supply is replenished
8
To an economist, the word capital includes
the natural resources used to produce goods and services
Time and effort people devote to producing goods/services
Tools, machines, buildings used in the production of goods
Money to invest in stocks/bonds to produce future wealth
9
Which scenario best illustrates the law of diminishing marginal utility?
A car breaks down more often as it gets older.
Tim doesn't play sports so doesn't care about a ball
Josh's 10th hotdog doesn't taste as good as the first one
A collector of china figurines is eager to get a new one.
10
Goods are
physical objects produced for sale.
our desires for things that meet our needs.
activities done for us by others.
things produced for the betterment of all people.
11
What does it mean to maximize utility?
to gain the most satisfaction possible
to strengthen the skills of a workforce
to become as efficient as possible
to strengthen a national infrastructure
12
Our wants are
in short supply.
equal to our resources.
scarce.
unlimited.
13
People’s wants are unlimited. This fact means that which of the following is always present?
shortages
costs of production
scarcity
marginal utility
14
What causes a shortage?
Permanent condition of too few resources to satisfy wants
the discovery of new sources of supplies for goods
Temporary increase in demand for a particular good/service
an increase in the production of goods
15
The opportunity cost of a decision is
the loss of the chance to make that decision a different way
the benefit you receive from making that decision.
the loss of all the other options you could have chosen.
the value of the next best thing you gave up for your choice
16
What do economists mean when they use the word "land"?
the money used to invest in order to produce future wealth
Time and effort people devote to producing goods/services
real estate buildings where goods and services are produced
natural resources used to produce goods and services
17
What are the factors of production?
risk and opportunity
land, labor, and capital
goods and services
wages, salaries, and profits
18
An economic model, in the form of a line graph, shows how an economy produces two goods is
opportunity cost.
a production possibilities frontier.
the law of diminishing utility.
a tradeoff.
19
Which of these items is a measure of productivity?
bushels of corn per acre
number of workers employed
dollars invested in new equipment
years of education

Econ Alive Ch 2 Flashcards | StudBud