Macro Econ Ch. 1: McGraw Hill

Which of the following consists of the physical actions and mental activities that people contribute to the production of goods and services?

a) employment

b) capital

c)investment

d)labor

d) labor

Factors of production include___.

-labor

-entrepreneurial ability

-capital

-land

Factories, storage, transportation and distribution facilities, as well as tools and machinery are all examples of physical ___ goods.

capital

In economics, the term ___ describes spending that pays for the production and accumulation of capital goods.

investment

An entrepreneur:

-innovates

-takes the risk of earning profits or suffering losses from owning an enterprise

-makes strategic business decisions that set the course of an enterprise

In economics, investment describes spending:

that pays for the production and accumulation of capital goods

All natural resources, human resources, and manufactured goods that go into the production of goods and services are considered a society's scarce ___ resources.

economic

From an economic standpoint, ___ includes all natural resources used in the production process.

land

___ is the discipline that examines either the economy as a whole or its total.

macroeconomics

___ economics focuses on facts and cause-and-effect relationships.

positive

Positive economics ___ value judgments, tries to establish ___ statements about economic behavior, and deals with ___ economic events.

avoids; scientific; actual

Normative economics is :

based on value judgments

Positive economics is concerned with ___, whereas normative economics deals with ___.

what is; what should be

A nation's production possibilities curve (PPC) can shift outwards:

-with an increase in the quality and quantity of resources

-as a result of specialization and trade

-through the use of improved production techniques

Specializing and participating in international trade allows an economy to:

-increase the quantities of capital and consumer goods available to society

-circumvent the output limits imposed by its own production possibilities curve

The pleasure, satisfaction, or happiness obtained from consuming a good or service is known as ___.

utility

T/F: Economics assumes that human behavior reflects "rational self-interest"

true

When comparing the additional or incremental costs vs. additional or incremental benefits of a decision, one is engaging in:

marginal analysis

___ is the discipline of economics concerned with individual units such as households, firms, and government.

microeconomics

Due to scarce resources, every individual, whether rich or poor, is faced with a(n) ___ cost when choosing to produce or consume more of one good over another.

opportunity

___ economic resources means limited goods and services.

scarce

___ illustrates the attainable combination of two goods that can be produced given a specific set of resources.

production possibilities curve (PPC)

A point that lies inside the PPC reflects:

-a failure to achieve full employment

-unemployment

The efficient output of an economy with a specific level of resources is reflected by the points ___ the PPC.

on

Describes the concept of ration self-interest.

-individuals allocate their resources to maximize their satisfaction

-indivs. look for and pursue opportunities to increase their utility

-indivs. weigh the costs and benefits of their decisions

Combinations of goods that fall on the PPC:

-are efficiently produced

-are attainable

-utilize all of an economy's resources

Advances in production technology enable a society to produce:

more goods with current or less resources

The economic term that means "extra", "additional", or "changes in" is ___.

marginal

The law of increasing opportunity costs states that as production of a particular good ___, the opportunity cost of producing an additional unit ___.

rises; rises

Unemployment in the economy is represented by

points inside the PPC