Podcast
Questions and Answers
The key economic concept that serves as the basis for the study of economics is:
The key economic concept that serves as the basis for the study of economics is:
- Money
- Inflation
- Scarcity (correct)
- Unemployment
The opportunity cost of Tammie's attending the concert is:
The opportunity cost of Tammie's attending the concert is:
- $450
- $50
- $600 (correct)
- $300
From an economic perspective, when a student decides to attend another year of college, the student has concluded that the marginal:
From an economic perspective, when a student decides to attend another year of college, the student has concluded that the marginal:
- Costs of attending college have decreased that year
- Benefits of attending college have increased that year
- Costs of attending college will be partly subsidized by the parents or the government
- Benefits of attending college are greater than the marginal costs (correct)
The purpose of the ceteris paribus assumption used in economic analysis is to:
The purpose of the ceteris paribus assumption used in economic analysis is to:
A schedule or curve that shows the various combinations of two products a consumer can purchase with a specific amount of money income is:
A schedule or curve that shows the various combinations of two products a consumer can purchase with a specific amount of money income is:
Economists would classify all of the following as land except:
Economists would classify all of the following as land except:
Which is not a factor of production?
Which is not a factor of production?
The role of the entrepreneur in society is to:
The role of the entrepreneur in society is to:
The combination of 5 drill presses and 2 bread is:
The combination of 5 drill presses and 2 bread is:
A point on the production possibilities curve is:
A point on the production possibilities curve is:
If a production possibilities curve is concave and not a straight line, then:
If a production possibilities curve is concave and not a straight line, then:
If two variables are directly related they will always graph as:
If two variables are directly related they will always graph as:
The market system is said to be characterized by 'consumer sovereignty.' This is because:
The market system is said to be characterized by 'consumer sovereignty.' This is because:
Anything that is generally acceptable in trading for goods and services is a:
Anything that is generally acceptable in trading for goods and services is a:
Explain how (if at all) each of the following events affects the location of a country's production possibilities curve.
Explain how (if at all) each of the following events affects the location of a country's production possibilities curve.
What are the three interrelated features of the economic perspective?
What are the three interrelated features of the economic perspective?
What is the difference between microeconomics and macroeconomics?
What is the difference between microeconomics and macroeconomics?
The economic perspective assumes that people make choices based on their self-interest and that they are purposeful. These economic decisions are also based upon the comparisons of what?
The economic perspective assumes that people make choices based on their self-interest and that they are purposeful. These economic decisions are also based upon the comparisons of what?
Name and explain the two types of economic statements.
Name and explain the two types of economic statements.
What is the economic means of satisfying wants?
What is the economic means of satisfying wants?
A schedule or curve that shows the various combinations of two products a consumer can buy with money income is called what?
A schedule or curve that shows the various combinations of two products a consumer can buy with money income is called what?
When a consumer's income increases, the budget line shifts to the left or right?
When a consumer's income increases, the budget line shifts to the left or right?
What are the four types of economic resources?
What are the four types of economic resources?
In a command economy, property resources are primarily owned by who?
In a command economy, property resources are primarily owned by who?
Broadly defined, competition is present if two conditions prevail; what are these two conditions?
Broadly defined, competition is present if two conditions prevail; what are these two conditions?
What is it called when workers specialize in various tasks to produce a commodity?
What is it called when workers specialize in various tasks to produce a commodity?
Consumers are not sovereign in a market economy and do not register their economic wants with 'Dollar votes'.
Consumers are not sovereign in a market economy and do not register their economic wants with 'Dollar votes'.
What economic terminology explains a situation where the product the first trader wants to sell is the same as the product the second trader wants to buy?
What economic terminology explains a situation where the product the first trader wants to sell is the same as the product the second trader wants to buy?
In the circular flow model, what are the two markets and what roles do each of them play?
In the circular flow model, what are the two markets and what roles do each of them play?
What Adam Smith term explains competition in the economy compelled by firms seeking to promote their own interests?
What Adam Smith term explains competition in the economy compelled by firms seeking to promote their own interests?
A fundamental assumption of economics is that:
A fundamental assumption of economics is that:
Adam Smith believed that:
Adam Smith believed that:
An economic model is:
An economic model is:
Whose theory implied that unemployment could be avoided by producing enough goods and services to keep all workers busy?
Whose theory implied that unemployment could be avoided by producing enough goods and services to keep all workers busy?
If China can produce more clothing in a year than England using fewer resources, then:
If China can produce more clothing in a year than England using fewer resources, then:
James Buchanan believed that:
James Buchanan believed that:
John Maynard Keynes believed that:
John Maynard Keynes believed that:
Macroeconomics is:
Macroeconomics is:
Opportunity costs exist because:
Opportunity costs exist because:
What economic system is based on private ownership of capital?
What economic system is based on private ownership of capital?
Study Notes
Key Economic Concepts
- Scarcity is the fundamental economic concept that drives the study of economics, emphasizing limited resources to meet unlimited wants.
- Opportunity cost represents the value of the next best alternative given up when making a choice.
Opportunity Cost Analysis
- Tammie's opportunity cost for attending a concert is calculated by considering her lost wages and costs associated with the trip, totaling $600.
- Understanding opportunity cost is vital for economic decision-making and prioritizing resources.
Marginal Analysis
- Marginal benefits must exceed marginal costs for an individual, such as a student attending an additional year of college, to justify their decision.
- The concept of ceteris paribus is used to isolate the effects of one variable, ensuring other factors remain constant in economic analysis.
Production Possibilities and Efficiency
- A budget line illustrates the combinations of two products available to a consumer based on their income.
- Production possibilities curves are tools that display attainable output levels, where points on the curve indicate efficient use of resources, while points inside are inefficient.
Economic Resources
- Four main types of economic resources include land, labor, capital, and entrepreneurial ability.
- Land, as a factor of production, excludes certain items like hydroelectric dams, which are man-made.
Market Mechanisms
- Consumer sovereignty in market economies empowers consumers to dictate production through their purchasing choices.
- The circular flow model highlights interactions in the economy, with households providing resources to businesses and purchasing goods and services in return.
Economic Theories and Models
- The "invisible hand" concept from Adam Smith illustrates how individual pursuits contribute to societal benefits.
- Economic models serve as abstract representations of reality, helping to simplify complex economic interactions.
Macroeconomics vs. Microeconomics
- Macroeconomics examines the overall economy, including factors affecting aggregate performance, while microeconomics focuses on individual decision-making.
- Understanding the differences between these two branches is crucial for comprehensive economic analysis.
Statements in Economics
- Positive economic statements are factual and objective, while normative statements include personal opinions or value judgments; the latter often leads to disagreements among economists.
Economic Systems and Theories
- Capitalism is characterized by private ownership of capital, contrasting with command economies where resources are government-owned.
- Influential economists like John Maynard Keynes argue for government intervention in the economy during downturns to stabilize it.
Specialization and Competition
- Specialization increases efficiency through division of labor, allowing workers to focus on specific tasks.
- Healthy competition exists where multiple independent buyers and sellers operate, promoting market dynamism.
Limitations and Constraints
- The economizing problem arises due to the limited means to satisfy unlimited wants, highlighting the importance of choice and prioritization in economics.
- Opportunity costs stem from resource limitations, forcing trade-offs in decision-making processes.
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Description
Test your knowledge on key economic concepts and opportunity cost with this quiz based on Lesson 1 of economics. Challenge yourself with multiple-choice questions that cover fundamental principles of the subject.
