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Flashcards in Chapter 1 Deck (34)
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1
Q

What is the difference between a microeconomist and a macroeconomist

A

A macroeconomists looks at the big picture in relation to more global economics vs. microeconomist have a narrower more specific economical issues.

2
Q

An economist at the University of Alaska at anchorage has been asked to explain the price of Alaskan crude oil has fallen recently. in order to develop a model, the professor should take which steps:
ID the problem
Gather data on oil prices and unrelated variables for correlations
ask people why they are not purchasing
none of the above

A

ID the problem, develop a model based on simplifying assumptions and test the model to formulate a conclusion

3
Q
Which of the following is a microeconomists topic: 
price of a new home
inflation rate
economic growth rate 
unemployment rate
forecasts of a recession next year
A

price of a new home

4
Q

A factor of production is the same as …

A

a resource

5
Q

“the government should provide healthcare for all citizens…” is a statement of …?

A

normative economic analysis

6
Q

Which of the following is not an example of a factor of production? a forest, computer program, a labor leader, dollars

A

Dollars

7
Q

Which of the following is not a resource? land, labor, money, or capital

A

money

8
Q

a good economic model should capture as many details about real-world behavior as possible true or false

A

false

9
Q

The statement, “American workers are lazy” is an ecamle of positive economic analysis T or F

A

False

10
Q

Which of the following is the best example of an activity that would be undertaken by and entrepreneur: buying and selling stocks and bonds
starting a new business, working on an assembly line, running for political office

A

starting a new business

11
Q

people are forced to make choices because of….

A

unlimited wants and limited resources

12
Q

Economics according to its definition studies how people:

A

make choices in the face of scarcity

13
Q

Scarcity

A

Scarcity is the condition in which human wants are forever greater than the available supply of time, goods, and resources

14
Q

Resources

A

the basic categories of inputs used to produce goods and services. resources are also called factors of production

15
Q

3 categories of resources

A

land, labor, capital

16
Q

what organizes resources to produce goods and services

A

entrepreneurship organizes _______________to produce goods and services

17
Q

land

A

any natural resource provided by nature

18
Q

labor

A

the mental and physical capacity of workers to produce goods and services

19
Q

entrepreneurship def

A

the creative ability of individuals to seek profits by taking risks and combining resources to produce innovative products.

20
Q

capital

A

the physical plants, machinery, and equipment used to produce other goods, capital goods are human-made goods that do not directly satisfy human wants.

21
Q

financial capital

A

paper assets such as stocks, bonds, deeds, by itself not productive, instead it is only a paper claim on economic capital

22
Q

define scarcity

A

the condition in which human wants are forever greater than the available supply of time, goods, and resources

23
Q

Define resources

A

the basic categories of inputs used to produce goods and services, resources are also called factors of production economists divide resources into three categories, land, labor, and capital

24
Q

define economics

A

the study of how society chooses to allocate its scarce resources to the production of goods and services in order to satisfy unlimited wants

25
Q

what are the steps to developing a model

A

identify the problem, develop a model based on simplified assumptions, collect data, test the model and formulate conclusions

26
Q

define model

A

a simplified description of reality used to understand and predict the relationship between variables

27
Q

what are the 2 most common pitfalls to clear thinking

A

failing to understand the ceteris paribus assumption and confusing association and causation

28
Q

define ceterus paribus

A

a latin phrase that means while certain variables change all other things remain unchanged

29
Q

T or F a theory cannot be tested legitimately unless its ceteris paribus assumption is satisfied

A

True

30
Q

what is the difference between association and causation

A

association is correlation and causation causes the effect

31
Q

the fact that one event follows another does not necessarily mean that the firs event caused the second event T or F

A

True

32
Q

define positive economics

A

an analysis limited to states that are verifiable “if A then B”

33
Q

define normative economics

A

an analysis based on value judgment

34
Q

T or F when opinion or points of view are not based on facts they are scientifically untestable

A

T