econ chs. 1-2

according to the text, which of the following is not a reason that economics is considered a science?

a. economists begin with observation

b. economists deal with logical processes

c. economists use their findings to predict outcomes

d. economists use their knowledge to control outcomes

b. economists deal with logical processes

which two basic economic principles create the need for choices?

a. scarcity and contentment

b. unlimited wants and limited resources

c. utility and opportunity

d. subjective value and utility

c. unlimited wants and limited resources

after twelve years of faithful service, your family's car finally collapses beyond hope of repair and must be taken to the junkyard. which economic term does this vehicle now best illustrate?

a. a free good

b. a nuisance good

c. an economic good

d. a scarce good

b. a nuisance good

which of the following is an economic service rather than an economic good?

a. lcd monitor

b. hard drive

c. haircut

d. computer game

haircut

according to the austrian economist, carl menger, what determines the value of an object?

a. the labor of the producer

b. the quality of raw materials

c. the utility for the user

d. the public good accomplished

c. the utility for the user

(t/f) economics is primarily a study of choices

true

(t/f) having unlimited wants is not a problem for most christians

false

(t/f) christian stewardship is the wise management of one's resources

true

(t/f) henry hazlitt's story of a broken window teaches that most economic costs are very straightforward

false

(t/f) every choice has an opportunity cost

true

what do economists call the satisfaction that someone feels from choosing a particular option?

opportunity benefit

what do economists call the regret a person feels for not choosing a particular option?

opportunity cost

what unit of measurement do economists use to assess the satisfaction a person receives from a choice?

util

what deals with economic choices made by individual units such as people, households, and business firms?

microeconomics

what is carl menger known to be the father of?

austrian economics

what are the two basic elements of the circular flow model?

a. banks and households

b. households and business firms

c. business firms and stock markets

d. stock markets and banks

b. households and business firms

which of the following would an economist not consider an example of land?

a. wheat

b. petroleum

c. sheep

d. machinery

d. machinery

in the circular flow model, government refers primarily to which level of government?

a. federal

b. state

c. local

d. all of the above

d. all of the above

which of the following is a transfer payment?

a. department of defense purchases

b. the wages of postal workers

c. income tax withholdings

d. governmental unemployment payments

d. governmental unemployment payments

the public sector refers to which part of the circular flow model?

a. households

b. businesses

c. banks

d. government

d. government

(t/f) the circular flow model is a tool of microeconomics

false

(t/f) households and business firms are the elements most basic to the circular flow model

true

(t/f) consumption expenditures are a business's payments for capital to make its product

false

(t/f) discouraging entrepreneurship can seriously damage a nation's economy

true

(t/f) governments should discourage profit making as it leads to greed and waste

false

what is the term for the entire sum that households spend on goods and services?

consumption expenditure

what is a payment businesses make in exchange for one of the four factors of production?

factor costs

what are payments made by the government to persons from whom the government expects no economic repayment?

transfer payments

a government's taking in more money than it pays out results in what financial situation?

budget surplus

which part of the circular flow model forms the public sector?

government

according to the text, economics is...

a. the principles describing how people, businesses, and governments ought to make financial choices

b. the science of how and why people, businesses, and governments make the choices they do

c. the description of systems man creates in order to produce, buy, and sell goods and services

d. the study of theories that guide nations' financial and monetary laws and systems

b. the science of how and why people, businesses, and governments make the choices they do

what biblical concept refers to a person's responsibility to make proper choices with his resources?

a. utility

b. stewardship

c. contentment

d. public good

b. stewardship

the economic cost of a good or service is...

a. the price charged for it

b. the cumulative cost of making and marketing it

c. the regret a consumer feels after choosing it

d. the value people place on it

d. the value people place on it

participation in which of the following could be an example of stewardship?

a. piano lessons

b. a savings account

c. a community soccer league

d. all of the above

d. all of the above

a family must quickly leave its home due to a fire. on her way out the door, the mother grabs the family photo albums but leaves several expensive paintings behind. what economic concept do her actions best illustrate?

a. intrinsic value

b. utility

c. unlimited wants

d. subjective value

d. subjective value

according to the austrian economist carl menger, what determines the value of an object?

a. the labor of the producer

b. the quality of the raw materials

c. the utility for the user

d. the public good accomplished

c. the utility for the user