Macroeconomics Test 1

The study of how society makes choices in using its limited resources.

What we give up to get something else.

A market in which profit opportunities are eliminated almost instantaneously.

Best described as the study of the choices made by individual households, firms, and governments.

Is best described as the study of nation's economy as a whole.

An approach to economics that applies statistical techniques and data to economic problems.

answers the question "What ought to be?"

The compilation of data that describe phenomena and facts refers to

The four criteria that are frequently used in judging the outcome of economic policy are efficiency, stability, economic growth, and equity.

The process by which resources are transformed into useful forms.

Economists refer to things that have already been produced that are in turn used to produce other goods and services as

According to the theory of ________, specialization and free trade will benefit all trade partners, even when some are absolutely more efficient producers than others.

Saving is an example of

Because resources are scarce, the opportunity cost of investment in capital is… foregone present consumption.

All the combinations of goods and services that can be produced if all of society's resources are used efficiently are represented on an

The value of the slope of a society's production possibility frontier is called its…

Production decisions are centralized in a…

In a ________ economy, the behavior of buyers and sellers determines what gets produced, how it is produced, and who gets it.

In which system are decisions made by thousands of people who have information about resources, production technology and consumer desires?

In a laissez-faire economy, what provides individuals the information needed to make decisions?

According to the law of demand there is negative relationship between ________ and ________.

If the demand for mac and cheese decreases as income increases, mac and cheese is a(n) inferior good.

If the demand for green tea increases as income increases, green tea is a(n)

Suppose the demand for lawnmowers goes down when the price of gasoline goes up. We can say that these two goods are…

Demand for one item goes down when the price of another item goes down. These items must be…

A change in the ________ of a good or service leads to a change in ________ that leads to a ________.

A change in ________ leads to a change in demand that causes a ________.

According to the law of ________, there is a positive relationship between price and supply;

The change in the ________ of a good leads to a change in ________, which leads to price;

When quantity demanded equals quantity supplied the market is in

Which of the following will definitely occur when there is a simultaneous increase in demand and an increase in supply?

Which of the following will definitely occur when there is a decrease in the supply of and an increase in demand for wireless speakers?

A situation where illegal trading at market prices takes place is known in economics as a…

An example of a ________ would be the government setting the price of coffee below the equilibrium price.

An effective price floor must be…

An effective price ceiling must be…

A surplus will occur if a ________ is set ________ the equilibrium price.

A shortage will occur if a ________ is set ________ the equilibrium price.

The rationing mechanism in market economies is the