Microeco

Economics is the study of *

• how society manages its unlimited resources.
  

• how to reduce our wants until we are satisfied.

• how society manages its scarce resources.

• how to fully satisfy our unlimited wants.

• how to avoid having to make trade- offs.

Having more money to buy stuff requires working longer hours, which leaves less time for leisure.

This is an example of the principle:

• Rational People Think at the Margin

• People Face Tradeoffs

• People Respond to Incentives

• Trade Can Make Everyone Better Off

is something that induces a person to acti.e. the prospect of a reward or punishment

• Incentives

• Trade-off

• Opportunity Cost
  

• International Trade

In the long runinflation is almost always caused by excessive growth in the quantity of moneywhich causes the value of money to fall. This is :

• when the government increases interest rates

• when the government relies on foreign currency

• when the government prints too much money.
  

• when the government increases taxes

The major lesson of the circular flow diagram is that

• saving must always be less than investment.

• taxes must always be greater than government expenditures.

• total income in the economy must always equal total spending.

• tax receipts must be equal to transfer payments

A rational person does not act unless *

• the action is ethical.
  

• the action produces marginal costs that exceed marginal benefits

• the action produces marginal benefits that exceed marginal costs.

• the action makes money for the person.

• none of these answers.

Suppose you find €20. If you choose to * use the €20 to go to a football match, your opportunity cost of going to the game is

• nothing, because you found the money.

• €20 (because you could have used the €20 to buy other things) plus the value of your time spent at the game. ( đúng)

• €20 (because you could have used the €20 to buy other things) plus the value of your time spent at the game, plus the cost of the dinner you purchased at the game.

• €20 (because you could have used the €20 to buy other things).

• none of these answers

Which of the following statements is true about a market economy ?

• With a large enough computer, central planners could guide production more efficiently than markets.

• Market participants act as if guided by an invisible hand to produce outcomes that maximize social welfare.

• The strength of a market system is that it tends to distribute resources evenly across consumers.
  

• Taxes help prices communicate costs and benefits to producers and consumers.
  

Points on the production possibilities frontier are

• inefficient.

• normative.
  

• unattainable.

• efficient.

Economic growth is depicted by *

• a shift in the production possibilities frontier outward

• a movement from inside the curve toward the curve.

• a shift in the production possibilities frontier inward.

• a movement along a production possibilities frontier toward capital goods