Micro Unit 1 Summary (Updated Version)

This video provides a comprehensive overview of Unit 1 in microeconomics, covering key concepts such as scarcity, economic systems, opportunity cost, and the production possibilities curve. It also delves into specialization, trade, and comparative advantage, explaining how countries benefit from trade. The video concludes with an exploration of cost-benefit analysis and marginal analysis, emphasizing the importance of understanding these concepts for making informed economic decisions.

What is the primary focus of microeconomics?

• The study of large-scale economic factors

• The study of international trade

• The study of government policies

• The study of small economic units like individuals and firms

Which of the following best describes opportunity cost?

• The most desirable alternative given up when a choice is made

• The financial cost of a decision

• The time spent on making a decision

• The total cost of all alternatives

What is the invisible hand in a free market economy?

• Government intervention in the market

• The self-regulating nature of the marketplace

• The influence of international trade

• The role of monopolies in the economy

What does a point inside the production possibilities curve represent?

• Inefficient use of resources

• Efficient use of resources

• Maximum production capacity

• Unattainable production levels

Which country should specialize in a good according to comparative advantage?

• The country with the most resources

• The country with the lowest opportunity cost

• The country with the largest workforce

• The country with the highest production capacity

What is the purpose of calculating per unit opportunity cost?

• To find the comparative advantage

• To identify the absolute advantage

• To calculate the financial profit

• To determine the total cost of production

What is an explicit cost?

• The cost of lost time

• The opportunity cost of a decision

• The out-of-pocket cost of an action

• The hidden cost of a choice

How is marginal utility calculated?

• By adding all previous utilities

• By multiplying total utility by the number of units

• By subtracting the previous total utility from the current total utility

• By dividing total utility by the number of units

What does the utility maximizing rule state?

• Total cost should be minimized

• Marginal utility per dollar should be equal for all goods

• Total utility should be maximized regardless of cost

• The price of goods should be minimized

What is the role of implicit costs in decision-making?

• They are the costs that are reimbursed

• They represent the financial expenses of a decision

• They are the opportunity costs of a decision

• They are the costs that are easily quantifiable