Macro Chapter 1 - Terms

Front

What is the definition of economics?

Back

The study of how people choose to use resources

Front

Which term describes a person who systematically and purposefully does the best they can to achieve their objectives?

Back

Rational person

Front

What is economic surplus?

Back

The amount by which benefits exceed costs

Front

What does opportunity cost refer to?

Back

The value of the next best alternative forgone

Front

Which of the following best defines sunk cost? A cost that can be recovered, A cost that has already been incurred and cannot be recovered, The cost of future investments, The cost of labor

Back

A cost that has already been incurred and cannot be recovered

Front

Marginal cost is:

Back

The cost of producing one additional unit of a good

Front

What is marginal benefit?

Back

The benefit received from consuming one more unit of a good or service

Front

Which of the following is a normative economic principle? Options: Unemployment rate is 5%, The government should reduce taxes, Inflation increased by 2%, GDP grew by 3%

Back

The government should reduce taxes

Front

A positive economic principle is:

Back

A statement that can be tested and validated

Front

Microeconomics is the study of:

Back

Individual markets and decision-makers