Economics: Lecture 1 Review

Most of economic theory..

• views charitable human actions as especially moral

• views individuals as home economists

• assumes that groups of people often behave irrationally

• assumes people act rationally to maximize their own interest

Microeconomics is not concerned with ...

• the quantities of each good produced

• the size of aggregate money flows in the economy

• the distribution of goods among households

• microeconomics is concerned with all of the above

Which of the following is a positive statement?

• An unemployment rate of 7 percent is a national disgrace

• Unemployment is not so important a problem as inflation

• Unemployment and inflation are equally important problems

• When unemployment is 7%, youth unemployment is close to 40%

Which of the following is the best definition of opportunity cost?

• amount of A to be given up to produce one more unit of B

• money to be paid to purchase one more unit of a good

• amount of input used to produce one more unit of a good

• the price to be charged in order to sell one more unit

A production possibility curve represents the...

• options for a government.

• future choices for a business.

• various combination of two goods that can be produced.

• way factors of production can be used.

A production possibility curve is drawn on the assumption that the ______________

• Amount of costumers and availability of labor is fixed

• Quality of resources and state of technology is flexible

• Amount of costumers and availability of labor is flexible

• Quality of resources and state of technology is fixed

What will cause the production possibility frontier to shift outwards

• technology

• unemployment

• price

• business

Trump proposing to build a wall seperating Mexico and the United States to make the economy great again is what kind of statement?

• Positive statement

• Normative statement

• An economic statement

• An inebriated statement

The definition of Scarcity is...

• An unlimited amount of resources to meet limited wants and needs
• A limited amount of resources to meet unlimited wants and needs.
• When people use time and energy to create events
• a city where individuals commit themselves to unlimited wants and needs

What is the fundamental problem of economics? 

• How to keep consumers out of debt?
• How to fulfill our unlimited wants and needs with limited resources?
• How to figure out the way to make the most money?
• How do we ensure all people get a college education?