Microeconomics chapter 1 2 4 5 6

When an economist refers to land as a factor of production, land includes?

All natural sources

Macroeconomist study the behavior of

the overall economy

When a particular choice is being considered, its opportunity cost is

the value of the best alternative that was given up

Additional police officers should be hired to combat crime if and only if

the opportunity costs of employing additional officers are less than the benefits from having them

Human capital includes

money held by people rather than banks

a simplified representation of the real world that is used to help explain economic phenomena

a model

Incentives are

incentives are

inducement to take a particular action

services can be thought of as

intangible goods

a line with positive a positive slope shows a relationship which

the larger is value of variable is x, the larger is the value of y

economist who assume that wants are “unlimited are

making a simplifying assumption so they can consider what happens when wants are greater than can be satisfied with the resources and technology available

Suppose that goods x and y are substitutes and the price of good Y falls. we should then expect…

a decrease in the demand for X and an increase in quantity of good Y demanded

When the price of coffee beans increased in the mid 1970’s, restaurants that raised the price of a cup of coffee experienced a decrease in demand for donuts because donuts and coffee are

complementary goods

in figure 3-2 if 40 million liters were supplied, the maximum price which they could be sold

0.30

An increase in perks offered to potential college students could be result of

a decrease in the number of college-entry aged Canadians

A large increase in the price of tennis balls will most likely lead to

Inward shift in demand for tennis racquets

The money price of a good is also know as its

absolute price

figure 3-6, if steel mills ignore the cost of pollution, the equilibrium quantity of steel will be

Q1

Income elasticity of demand is measured as

a percentage change in quantity demand dive by the percentage change in income

If the quantity of a product demanded is the same at each price, ceteris paribus, its price elasticity of demand

perfectly inelastic

if one percent increase in the price of bananas leads to a one percent decrease in quantity of bananas demanded, then the demand for bananas is

unitary elastic