Microeconomics Exam 1/110
Questions and Answers Distinction
Rated
Which of the following are the four categories of resources? - -labor,
entrepreneurial ability, capital, and natural resources
-Which of the following is an example of human capital? - -college education
-The problem of scarce resources - -is that there are not enough resources
to satisfy people's unlimited wants
-Because people's wants are unlimited but resources are scarce - -choices
must be made
-Michigan has an abundant supply of fresh water. However, an economist
would consider it a scarce resource
because - -water is limited relative to people's unlimited wants
-. A resource is something that - -is used to produce goods and services
-Natural resources are - -included in the category of resources called gifts of
nature
-Which of the following would an economist classify as capital? - -a lawyer's
personal computer
-"Natural resources" refers - -bodies of water, trees, oil reserves, minerals
-An entrepreneur is a(n) - -organizer who seeks profitable opportunities and
is willing to accept risks
-Which of the following are examples of goods? - -computer, mouse, mouse
pad
-Goods and services are scarce because - -they are produced using scarce
resources
-In the simple circular-flow model: - -Firms produce and sell goods and
services
-Households - -own and sell resources
, -The assumption that individuals act rationally implies that - -people
implicitly calculate the costs and benefits of an activity to decide if it is
worthwhile
-Rational economic decision makers will make a change only if - -the
expected marginal benefit exceeds expected marginal cost
-In economics, the term "marginal" usually refers to - -a small change in an
economic variable
-To say that people make marginal decisions means that - -they weigh the
additional costs and additional benefits of various activities before they
make a decision
-Microeconomics is the study of - -the economic behavior of individual
decision makers
-Theory in economics - -involves some simplification of reality
-The basic purpose of economic models is to - -provide explanations for,
and predictions of, economic events
-Which of the following is an example of a positive statement? - -An
increase in the price of gasoline will cause a reduction in the amount
purchased
-Which of the following is a normative statement? - -Congress must
recognize that the growing national debt is the most serious problem that
the country faces
-A fallacy of composition is to assume that - -what is true for any individual
component in a group is true for the group as a whole
-Opportunity cost is defined - -as the value of the best alternative not
chosen
-You can either spend your summer working for $10,800 or go in a European
vacation. If you work, your
expenses will be about $1,500. If you go to Europe, the airfare, hotel, food
and miscellaneous expenses will
total about $10,000. What's your opportunity cost of visiting Europe? - -
$19,300
-Sunk costs - -should not be considered when making economic decisions
Questions and Answers Distinction
Rated
Which of the following are the four categories of resources? - -labor,
entrepreneurial ability, capital, and natural resources
-Which of the following is an example of human capital? - -college education
-The problem of scarce resources - -is that there are not enough resources
to satisfy people's unlimited wants
-Because people's wants are unlimited but resources are scarce - -choices
must be made
-Michigan has an abundant supply of fresh water. However, an economist
would consider it a scarce resource
because - -water is limited relative to people's unlimited wants
-. A resource is something that - -is used to produce goods and services
-Natural resources are - -included in the category of resources called gifts of
nature
-Which of the following would an economist classify as capital? - -a lawyer's
personal computer
-"Natural resources" refers - -bodies of water, trees, oil reserves, minerals
-An entrepreneur is a(n) - -organizer who seeks profitable opportunities and
is willing to accept risks
-Which of the following are examples of goods? - -computer, mouse, mouse
pad
-Goods and services are scarce because - -they are produced using scarce
resources
-In the simple circular-flow model: - -Firms produce and sell goods and
services
-Households - -own and sell resources
, -The assumption that individuals act rationally implies that - -people
implicitly calculate the costs and benefits of an activity to decide if it is
worthwhile
-Rational economic decision makers will make a change only if - -the
expected marginal benefit exceeds expected marginal cost
-In economics, the term "marginal" usually refers to - -a small change in an
economic variable
-To say that people make marginal decisions means that - -they weigh the
additional costs and additional benefits of various activities before they
make a decision
-Microeconomics is the study of - -the economic behavior of individual
decision makers
-Theory in economics - -involves some simplification of reality
-The basic purpose of economic models is to - -provide explanations for,
and predictions of, economic events
-Which of the following is an example of a positive statement? - -An
increase in the price of gasoline will cause a reduction in the amount
purchased
-Which of the following is a normative statement? - -Congress must
recognize that the growing national debt is the most serious problem that
the country faces
-A fallacy of composition is to assume that - -what is true for any individual
component in a group is true for the group as a whole
-Opportunity cost is defined - -as the value of the best alternative not
chosen
-You can either spend your summer working for $10,800 or go in a European
vacation. If you work, your
expenses will be about $1,500. If you go to Europe, the airfare, hotel, food
and miscellaneous expenses will
total about $10,000. What's your opportunity cost of visiting Europe? - -
$19,300
-Sunk costs - -should not be considered when making economic decisions
