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Microeconomics Final (#1-20)
Terms in this set (20)
All economics questions are about
how to cope with scarcity.
could be either a reward or a penalty.
In part, microeconomics is concerned with the study of
the effect government regulation has on the price of a product.
The production possibilities frontier
marks the boundary between attainable combinations of goods and services and unattainable combinations.
The production possibilities frontier illustrates
the combinations of goods and services that can be produced efficiently.
The production possibilities frontier itself shows
the maximum levels of production that can be attained.
Which of the following is NOT true concerning a society's production possibilities frontier (PPF)?
Consumers will receive equal benefits from the two goods illustrated in the PPF.
Both answers A and B are correct (is defined as the opportunity cost of producing another unit of a good or service, can be illustrated by moving along a PPF unit by unit).
Marginal cost is the _____ one more unit of a good and _____ of the good increases.
opportunity cost of producing; increases as production.
The principle of increasing marginal cost implies that the
additional cost of producing one more of a good or service increases as more is produced.
The table above represents different points along a production possibilities curve. What is the marginal cost of moving from 2 bushels to 3 bushels of beans?
3 bushels of carrots per bushel of beans.
An expansion of the production possibilities frontier is
called economic growth.
Economic growth can be represented by
an outward shift of the production possibilities frontier (PPF).
After Hurricane Katrina devastated parts of Mississippi and New Orleans in 2005, we can be sure that the production possibilities frontier for that area temporarily
shifted inward, toward the origin.
In the figure above, the marginal cost of the second computer is
3 computer sets.
In the figure above, the marginal cost of the fifth computer is
20 television sets.
Resource use is electively efficient
when marginal benefit equal marginal cost.
Suppose that you have a choice between video games and movies. If the marginal benefit of a video game, in terms of movies forgone, exceeds the marginal cost, then your resources would be used most efficiently by
increasing video games and decreasing movies.
A key factor that leads to economic growth is
human capital accumulation.
shifts the production possibilities frontier outward.
Recommended textbook explanations
Principles of Economics
Principles of Economics 2e
David Shapiro, Steven Greenlaw, Timoth Taylor
Foundations of Microeconomics
Michael Parkin, Robin Bade
Macroeconomics, Aplia Access Card for Macroeconomics (1 Semester)
N. Gregory Mankiw
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