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5 Written questions

5 Matching questions

  1. efficiency
  2. marginal benefit (MB)
  3. investment
  4. trade-offs
  5. microeconomics
  1. a the ability to produce what people want at the least possible cost
  2. b scarce resources imply that individuals, firms, and governments are constantly faced with difficult choices that involve benefits and costs
  3. c the additional benefit received from the consumption of the next unit of a good or service
  4. d the branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units--that is, business firms and households
  5. e the process of using resources to produce new capital

5 Multiple choice questions

  1. the idea that consumers ultimately dictate what will be produced (or not produced) by choosing what to purchase (and what not to purchase)
  2. occurs when an economy's production possibilities increase - usually caused by more resources, better resources, or improvements in technology. causes an outward shift in the PPF
  3. production of maximum output for a given level of technology and resources - includes all points on the PPF
  4. goods produced for present consumption
  5. goods used to produce other goods or services over time

5 True/False questions

  1. marketthe institution through which buyers and sellers interact and engage in exchange


  2. absolute advantageexists if a producer can produce more of a good than all other producers


  3. marginal analysismaking decisions based upon weighing the marginal benefits and costs of that action. the rational decision maker chooses an action if the MB>=MC


  4. economic theoryinvolves building models of behavior, making statements about cause and effect, action and reaction


  5. logical choicethe assumption that economic actors are consistent and logical in making choices


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