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5 Written questions

5 Matching questions

  1. model
  2. production possibilities
  3. scarcity
  4. economics
  5. economic growth
  1. a a formal statement of a theory, describing the relationship between two or more variables
  2. b different quantities of goods that an economy can produce with a given amount of scarce resources
  3. c the study of how individuals, firms, and societies choose to use their scarce resources to provide for their unlimited material wants
  4. d 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
  5. e the fact of limited resources in a world of unlimited material human wants

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. the difference between the benefit and the cost of any activity
  3. specialization and free trade will benefit all trading parties, even those that may be absolutely more efficient producers
  4. production of the combination of goods and services that provides the most net benefit to society. the optimal quantity of a good is achieved when MB=MC of the next unit. This only occurs at one point on the PPF
  5. the best alternative that we forgo, or give up, when we make a choice or a decision

5 True/False questions

  1. normative economicsstudies economic behavior without making judgements--describes what exists and how it works

          

  2. trade-offsscarce resources imply that individuals, firms, and governments are constantly faced with difficult choices that involve benefits and costs

          

  3. marginal benefit (MB)the additional benefit received from the consumption of the next unit of a good or service

          

  4. theoryfairness of economic outcomes

          

  5. free enterpriseunder a free market system, individual producers must figure out how to plan, organize, and coordinate the production of products and services

          

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