Microeconomics Mod1

Module 1 w appendix

Scarcity

Is the fundamental economic problem that human wants exceed the availability of time goods and resources

Economics

Is the study of how individuals in society choose to allocate scarce resources to satisfy unlimited wants

Resources

Factors of production classified as land labor and capital are also called

Scarcity

Cannot be eliminated, prevails in poor and rich economics.

Macroeconomics

Applies an economy wide perspective, which focuses on such issues as inflation unemployment and the growth rate of economy

Microeconomics

Examine small units of an economy, analyzing individual markets such as their market for personal computers

Model

A simplified description of reality used to understand and predict economic events

Ceteris paribus

If the _______ assumption is violated, a model cannot be tested

Positive economics

Uses testable statements

Land

A shorthand expression for any natural resource provided by nature

Capital goods

The physical plants, machinery and equipment used to produce other goods. Capital goods are man made goods that do not directly satisfy human wants.

Labor

There's the mental and fiscal capacity of workers to produce goods and services is

Entrepreneurship

The creative ability of individuals to seek profits by combining resources to produce innovative products.

Normative economics

An analysis based on value judgment.

Dollars

Not a factor of production.

Capital

A textbook is an example of..

Decision making because the problem of scarcity

Economics is primarily the study of?

Unemployment in the nation

Included in the study of macroeconomics

Individuals or specific markets

Microeconomics approaches the study of economics from the viewpoint of

Model

Simplified description of reality to understand and predict an economic event.

Statement of normative economics

“An increase in the federal minimum wage will provide a living wage for the working poor” is a:

Positive statement

“If taxes are raised, unemployment will drop” is a

Workers will gain their rightful share of total income

The normative statement that completes the following sentence “If the minimum wage is raised”

Normative economic analysis

“The government should provide health care for all citizens” This statement is an illustration of:

Capital

The software programs that make computer hardware useful in production and management tasks are?

Other relevant factors like consumer incomes must be held constant

An economic theory claims that a rise in gasoline prices will cause gasoline purchase to fall, ceteris paribus. Which means?

Positive economics

“The federal minimum wage causes higher unemployment among teenagers” is a statement of:

None

What would eliminate scarcity as an economic problem?

The factory that produces the costume jewelry you buy.

What is NOT an example of capital?

All other factors are held constant.

If book prices rise and student demand reduces, an economic model can show a cause and effect relationship only if which of the following occurs?

Land resources include forests range lands and marine fisheries that naturally regenerate.

What is true about renewable resources?

True

TorF All human wants cannot be satisfied but of the problems of scarcity.

True

Economics is the study of people’s making choices faced with the problem of unlimited wants and limited resources. T OR F

False

Policies to determine the price of troll dolls are a concern of macroeconomics. T or F

False

Policies to increase the supply of money in the economy are primarily a concern of microeconomics.

False

The statement “a tax hike for the rich is the fairest way to raise tax collection” is an example of positive economic analysis. True or false:

False

The statement “the income tax is unfair to those who work hard to earn their incomes” is an example of positive economic analysis.True or false?

True

The statement “it would be better to put up with price controls than to have continuing higher medical care prices” is an example of normative economic analysis.True or false?

True

“The statement cutting government spending is the best way to boost consumer confidence” is an example of normative economics.True or false?

True

“This statement, it is better to suffer a little more unemployment and a little lower prices” is an example of normative economic analysis. True or false?

False

The statement “american workers are lazy is an example of positive economic analysis” true or false?

Graph

Provides a means to clearly show economic relationships in a two dimensional space.

Direct relationship

Is one in which two variables change in the same direction.

Inverse relationship

Is one in which two variables change in the

opposite direction.

slope

The ratio of the vertical change (the rise or fall) to the horizontal change (the run) is called the

Independent relationship

Is one in which two variables are unrelated.

Positive

The slope of straight line AB is?

Remains constant with changes in X

Slope of straight line AB:

Direct

As X increases along the horizontal axis, corresponding to point AB on the line, the Y values increase. The relationship between X amd Y variables is?

1/2

The slope of straight line AB is? ( in numbers)

There is an inverse relationship between X and Y or none of the above?

Straight line CD shows that:

Negative

Slope of straight line CD

-1

Slope for straight line CD is

Constant with changes in X

The Slope of straight line CD remains..

Inverse

As X increases along the horizontal axis corresponding to point CD on the line.The y values decrease. The relationship between x and y variable is?

Independent

If the Slope of the line CD were zero, the relationship between the X and Y variable is?