Chapter One Quiz

Olivia t
Quiz by Olivia t, updated more than 1 year ago
Olivia t
Created by Olivia t about 4 years ago
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Quiz of some topics covered in chapter one- micro

Resource summary

Question 1

Question
What are the 3 Economic Ideas? 1. [blank_start]People are rational[blank_end] 2. [blank_start]People respond to economic incentives[blank_end] 3. [blank_start]Optimal decisions are made at the margin[blank_end]
Answer
  • People are rational
  • People respond to economic incentives
  • Optimal decisions are made at the margin

Question 2

Question
Why do people make choices?
Answer
  • People make choices as they try to attain their goals
  • People make choices because resources are scarce

Question 3

Question
What are the 3 economic fundamental questions 1. [blank_start]What goods and services will be produced[blank_end]? 2. [blank_start]How will goods and services be produced[blank_end]? 3. [blank_start]Who will receive the goods and services[blank_end] produced?
Answer
  • What goods and services will be produced
  • How will goods and services be produced
  • Who will receive the goods and services

Question 4

Question
What are the 2 opposing answers to the 3 fundamental economic questions
Answer
  • centrally planned market
  • market economy (price system)

Question 5

Question
The following statement: "gas prices are too low" is what kind of statement:
Answer
  • normative
  • positive

Question 6

Question
Define market, economics, and scarcity. 1. Market: [blank_start]group of buyers/sellers of a good or ser[blank_end][blank_start]vice and the institution or arrangement[blank_end] [blank_start]by which they come together to trade[blank_end] 2. Economics: [blank_start]analyzing how people make choices[blank_end] [blank_start]and interact in markets[blank_end] 3. Scarcity: [blank_start]situation in which[blank_end] [blank_start]unlimited wants exceed the limited res[blank_end][blank_start]ources available to fulfill those wants[blank_end]
Answer
  • group of buyers/sellers of a good or ser
  • vice and the institution or arrangement
  • by which they come together to trade
  • analyzing how people make choices
  • and interact in markets
  • ources available to fulfill those wants
  • unlimited wants exceed the limited res
  • situation in which

Question 7

Question
People make decisions because of scarcity
Answer
  • True
  • False

Question 8

Question
Define opportunity cost. Opportunity cost: [blank_start]the highest valued alternative that must[blank_end] [blank_start]be given up to engage in an activity[blank_end]
Answer
  • the highest valued alternative that must
  • be given up to engage in an activity
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