Micro Review

A _______ good is the one that has a zero opportunity cost.

A planned economy meets one the following criteria:

• Private resource ownership

• Public sector is the decision-maker

• Price rationing system

• None of the above

Which of the following is considered to be a basic economic question:

• What/how much to produce

• For whom to produce

• How to produce

• All of the above

A ____________ is a simplified representation of something in the real world; it represents only the important aspects of the real world being investigated, ignoring unnecessary details.

One of the main assumptions of the PPC model is:

• Fixed & unchanging FoP

• Multidimensional analysis (more than 3 goods could be analyzed)

• The economy can produce beyond the PPC with limited resources

• None of the above

When a consumer makes a decision, we say that the alternative that was sacrificed is called:

When the PPC is drawn as a straight line, we say that the opportunity is constant (True or false).

_____________ refers to increases in the quantity of output produced in an economy over a period of time.

The 4 factors of production are:

• Land, labor, human resources & capital

• Labor, capital, technology & entrepreneurship

• Land, labor, capital & entrepreneurship

• None of the above

Savings, taxes & imports are considered ______________ in the circular flow of income in an open economy.