Micro Chapter 1

For economists, the word "utility" means:

pleasure and satisfaction

When entering a building, Sam diverts his path to go through an open door rather than make the physical effort to open the closed door that is directly in his path. This is an example of:

marginal benefit-marginal cost analysis

The study of economics is primarily concerned with:

choices that are made in seeking the best use of resources.

You should decide to go to a movie:

if the marginal benefit of the movie exceeds its marginal cost

The assertion that "There is no free lunch" means that:

all production involves the use of scarce resources and thus the sacrifice of alternative goods.

An economic hypothesis:

is a possible explanation of cause and effect.

Which of the following terms implies the greatest degree of confidence in an economic generalization?

a principle.

Economists:

use both the economic perspective and the scientific method.

The scientific method is:

used by economists and other social scientists, as well as by physical scientists and life scientists.

Economic models:

emphasize basic economic relationships by purposefully simplifying the complexities of the real world.

The term "ceteris paribus" means:

other things equal.

An hypothesis is:

a tentative, untested statement of possible cause and effect.

Microeconomics is concerned with:

a detailed examination of specific economic units that make up the economic system.

A normative statement is one that:

is based on value judgments.

A positive statement is concerned with:

some goal that is desirable to society

The economizing problem is one of deciding how to make the best use of:

limited resources to satisfy virtually unlimited wants.

When the economist says that economic wants are insatiable, this means that:

these wants are virtually unlimited and therefore incapable of complete satisfaction.

The scarcity problem:

persists because economic wants exceed available productive resources.

Which of the following is a labor resource?

a computer programmer

The four factors of production are:

land, labor, capital, and entrepreneurial ability

Economic resources are also called:

factors of production.

Which of the following is real capital?

a construction crane

Which of the following will not produce an outward shift of the production possibilities curve?

the reduction of unemployment

If the production possibilities curve is a straight line:

economic resources are perfectly substitutable between the production of the two products.

Unemployment:

is illustrated by a point inside the production possibilities curve.

A production possibilities curve illustrates:

scarcity.

A nation’s production possibilities curve is bowed out from the origin because:

resources are not equally efficient in producing every good.