Micro Week One Review -- CTY Micro 2025

What is economics?

• Economics is the study of how society manages its scarce resources​

• Economics the study of how people and societies make choices to allocate limited resources to satisfy our unlimited needs and wants​

• Economics is the art of making the most out of life

• Only about money

Economics deals primarily with the concept of:

• scarcity

• money

• poverty

• banking

What is microeconomics?

• How households and firms make decisions

• How individual markets make up the economy as a whole

• How households and firms compete with one another

• How individual markets become tiny

What is macroeconomics?

• How households and firms make decisions

• How individual markets make up the economy as a whole​

• When firms grow and expand their operations

• How households take over firms

Which of the following is a positive statement?

• The government should spend more on healthcare

• Taxes should be raised on the wealthy to reduce income inequality

• We should focus on prioritizing full employment over controlling inflation

• The current unemployment rate is 5%

What is an opportunity cost?

• The act of making a choice between two or more options

• The value of the next best alternative that is forgone when a choice is made

• The dollar amount of how much it costs to produce a good or service

• Nothing

Select all that apply: What are three common economic tradeoffs?

• Equity and efficiency

• Income and environment

• Goods/services and military

• Supply and demand

Rational people make a decision when...

• Marginal benefit > marginal cost

• Marginal cost > marginal benefit

• Marginal benefit ≥ marginal cost

• Marginal cost ≥ marginal benefit

What does marginal mean?

• Additional

• Total

• Product

• Quotient

The opportunity cost of an item is:

• the market price 

• what you give up to get it

• its utility

• the time spent