Which of the following is the best definition of economics?
The study of how individuals and societies choose to use the
scarce resources that nature and previous generations have provided. Sunk costs are... costs that cannot be avoided because they have already been incurred. Opportunity cost is... that which we forgo, or give up, when we make a choice or decision. An efficient market is... a market in which profit opportunities are eliminated almost instantaneously. Microeconomics is... the branch of economics that examines the functioning of individual industries and the behavior or individual decisionmaking units. What is the focus of macroeconomics? inflation and unemployment Ockham's Razor the principle that irrelevant detail should not be included in a model Ceteris paribus" all else equal The fallacy of composition... is the belief that what is true for a part is necessarily true for the whole. The four criteria that are frequently used in judging the outcome of economic policy are... efficiency, equity, stability, and economic growth The slope of a horizontal line is... zero
The slope of a vertical line is...
infinite.. The opportunity cost of investment in capital is forgone present consumption because... resources are scarce The ppf is a graph that shows... all the combinations of goods and services that can be produced if all society's resources are used efficiently. The value of the slope of a society's ppf is called... its marginal rate of transformation For an economy to produce at a point beyond its current ppf, the economy must... increase its resource base An improvement in technology will cause the ppf to shift... outward The economic problem can be best stated as: given scarce resources, how exactly do societies go about deciding what to produce, how to produce it, and for whom to produce? Which of the following is an element of a command economy? Production decision are centralized An economy in which individual people and firms pursue their own self-interest without any central direction or regulation is a... laissez-faire economy In a laissez-faire economy, who determines what gets produced, how it is produced, and who gets it? the behavior of buyers and sellers The basic coordinating mechanism in a free market system is... price The distinguishing characteristic of a public good is that...
once the good is produced, everyone gets to enjoy the benefits,
whether they have paid for the good or not. According to the law of demand, as prices rise, ceteris paribus quantity demanded... decreases According to the law of demand, there is what kind of relationship between price and quantity? negative If the demand for tortillas increases as income increases, tortillas are a... normal good If the demand for coffee decreases as income decreases, coffee is a... normal good Suppose the demand for newspapers goes up when the price of coffee goes down. We can say that the two goods are... complements A good whose demand is inversely related to income is an... inferior good When the decrease in the price of one good causes the demand for another good to decrease, the goods are... substitutes A change in price of a good or service leads to a... change in quantity demanded; movement along the demand curve A change in income, preferences, or prices of other goods or services leads to a ____ that causes a ___ change in demand, shift of the demand curve According to the law of supply, there is what kind of relationship between price and the quantity of a good supplied? positive Equilibrium is...
the condition that exists when quantity demanded equals
quantity supplied Cross-price elasticity of demand measures... the response in the quantity of one good demanded to a change in the price of another good. Price ceiling... a maximum price, set by the government, that sellers may charge for a good If the price ceiling is set below the equilibrium price, there will be a... shortage A perfectly inelastic demand curve is shown as a... vertical line When the price of radios increases 5%, quantity demanded decreases 5%. The elasticity for radios is... price unitary When the price of fresh fish increases 5%, quantity demanded decreases 10%, the elasticity for fresh fish is... price elastic When the price of coffee increases 5%, quantity demanded decreases 3%. The elasticity for fresh fish is... price inelastic Total revenue will increase if price falls and demand is... elastic It is necessary to ration a good whenever what exists? excess demand Please allow access to your computers microphone to use Voice Recording. Having trouble? Click here for help.