ECON 103 Midterm

The basic goal of economics is to

address the scarcity problem created because the population’s desire for goods exceeds society’s ability to produce them.

An individual worker is laid off because his firm is in financial trouble. Why would this event be of more interest to a microeconomist than to a macroeconomist?

An event involving just one worker and one firm is a micro-scale event.

According to marginal thinking, an individual will stop buying more of a good when the ________ of the next unit exceeds the ________.

cost, benefit

From an economic perspective, the key fact about trade is that

voluntary trade benefits both parties.

An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause a(n)

outward shift of the PPF

Suppose someone finds a production possibilities frontier (PPF) that is shaped like a straight line. What can one determine about the production of the two goods?