the best use of scarce resources to achieve the maximum satisfaction of economic wants

increasing the level of productive resources so there is a minimum level of income

increasing the level of productive resources so there is a maximum output in society

the best use of scarce resources paid for at the minimum level of cost to consumers and businesses

Benefit exceeds is marginal cost

cost exceeds its marginal benefit

cost equals its marginal benefit

benefit is still positive

opportunity cost calculation

microeconomics

marginal analysis

the scientific method

what is the current national rate of unemployment?

is the economy experiencing a decline in the rate of inflation?

will a new type of television set increase the number of buyers?

is the production of goods and services in the economy greater this year than last year?

a tradeoff

a budget line

a tangent point

an optimal output

a pair of stockings

a construction crane

a savings account

a share of IBM stock

unemployment

the efficient use of resources

the use of best-available technology

unlimited wants

is based on the law of averages

applies only to microeconomics

applies only to macroeconomics

is based on value judgments.

major topics of macroeconomics

not relevant to the u.s. economy

major topics of microeconomics.

peculiar to command economics

is at a point near the top of the curve

is at the precise midpoint of the curve

is at a point near the bottom of the curve

depends upon the preferences of society

the production of goods and services is determined primarily by markets, but the allocation of goods and services is determined primarily by the government.

the production of goods and services is determined primarily by government, but the allocation of goods and services is determined by markets.

the production and allocation of goods and services is determined primarily through markets.

the production and allocation of goods and services is determined primarily through government.

Freedom of choice and enterprise are essential elements of the market system

producers are "kings" in a market economy because they determine what is produced.

the market system is efficient at allocation of resources, but not consumer goods to their most valued uses.

the operation of a market system eventually results in an equal distribution of income.

influence consumers in their purchases of goods and services.

influence businesses in their purchases of economic resources.

influence workers in making occupational choices.

do all of these.

encourages innovation because government provides tax breaks and subsidies to those who develop new products or new productive techniques.

discourages innovation because it is difficult to acquire additional capital in the form of new machinery and equipment.

discourages innovation because firms want to get all the profits possible from existing machinery and equipment.

encourages innovation because successful innovators are rewarded with economic profits.

how will the goods and services be produced?

how should the system accommodate change?

who is to receive the output of the system?

what goods and services should be produced by government?

the guiding function of prices

Capital accumulation

the "Invisible hand"

"Dollar votes"

product markets are ignored.

resource markets are ignored.

the determination of product and resource prices is not explained.

households are included, but not businesses.

both buyers in the resource market.

both sellers in the product market.

sellers in the resource and product markets respectively.

sellers in the product and resource markets respectively.

The Worldly Philosophers

The Wealth of Nations

The Age of the Economist

The Affluent Society

assumes that central planning is taking place

illustrates how natural resources are created

illustrates how money is created by the banking system

illustrates the interdependence of businesses and consumers

vertical

horizontal

upward sloping

downward sloping

An increase in the demand for computers

a decrease in the demand for computers

an increase in the incomes of consumers

a decrease in the price of parts for making computers

increase in the demand for gasoline

decrease in the demand for gasoline

increase in the supply of gasoline

decrease in the supply of gasoline

Quantity supplied

Quantity demanded

Supply

Demand

there is a shortage of the product

there is a surplus of the product

the product is a normal good

the product is an inferior good

a shortage will occur and producers will produce more and lower prices

a surplus will occur and producers will produce less and lower prices

a surplus will result and consumers will bid prices up

producers make extremely high profits

achieve an equilibrium price.

produce shortages

produce surpluses

create disorder

when there is no surplus or the product

when there is no shortage of the product

when consumers want to buy more of the product than producers offer for sale

where the demand and supply curves intersect

increase in the price of lettuce and quantity purchased

decrease in the price of lettuce and quantity purchased

increase in the price of lettuce and decrease in the quantity purchased

decrease in the prices of lettuce and increase in the quantity purchased

Do not affect the rationing function of price in a free market

interfere with the rationing function of price in a free market

result in surpluses of products in markets where they are used

result in shortages of products in markets where they are used

rises upward and to the right, but has a constant slope

can be represented by a line parallel to the vertical axis

cannot be shown on a two-dimensional graph.

Can be represented by a line parallel to the horizontal axis.

a decrease in price will increase total revenue.

demand may either be elastic or inelastic.

an increase in price will increase total revenue

demand is elastic

an increase in price results in a reduction in total revenue

a reduction in price results in an increase in total revenue

a reduction in price results in a decrease in total revenue

the elasticity coefficient exceeds one

price rises and supply is elastic

price falls and demand is elastic

price rises and demand is inelastic

price rises and demand is elastic

number of close substitutes for the product available to consumers

amount of time the producer has to adjust inputs in response to a price change

urgency of consumer wants for the product

number of uses for the product

positive in the short run but negative in the long run

greater in the long run than in the short run

greater in the short run than in the long run

independent of time

the price of some other product

the price of that same product

income

the general price level

normal

inferior

complements

substitutes

at the market price, quantity supplied is greater than quantity demanded

at the current market price, quantity demanded is greater than quantity supplied

some consumers are willing to pay more than the equilibrium price but do not need to do so

some consumers are willing to pay less than the equilibrium price but do not need to do so

when firms pay more than the opportunity cost of resources

when the demand curve for a product is located too far to the left

when firms "use" resources without being compelled to pay for their full costs

only in capitalistic societies

capital goods

private goods

public goods

consumption goods

there is no need or demand for such goods.

private firms cannot stop consumers who are unwilling to pay for such goods from benefiting from them

public enterprises can produce such goods at a lower cost than can private enterprises.

their production seriously distorts the distribution of income

summing vertically the individual demand curves for the public good

summing horizontally the individual demand curves for the public good

combining the amounts of the public good that the individual members of society demand at each price

multiplying the per-unit cost of the public good by the quantity made available

compare the real worth, rather than the market values, of various goods and services.

compare the relative desirability of alternative distributions of income

determine whether it is better to cut government expenditures or reduce taxes

compare the benefits and costs associated with any economic project or activity

Marginal benefit exceeds marginal cost by the greatest amount

total benefit equals total cost

marginal benefit equals marginal cost

marginal benefit is zero

real costs cannot be stated in monetary terms.

one must decide whether to compare total costs and total benefits or marginal costs and marginal benefits.

positive and negative externalities associated with such projects may be difficult to measure.

the funding of such projects is inherently inflationary.

the quantity demanded for a good or service is greater than the quantity supplied of the good or service

the quantity supplied of a good or service is greater than the quantity supplied of the good or service

demand and supply do not accurately reflect all the benefits and all the costs of production

the market system is unable to adapt to or to accommodate change

not produce the product without government intervention

produce a socially optimal allocation of resources

allocate too few resources to production of the product

allocate too many resources to production of the product

is a measure of inflation

will increase if there is an increase in the price level

will increase if there is an increase in the level of output

can change from one year to the next even if there is no change in output

output per person necessarily increases

output per person necessarily decreases

output per person necessarily remains unchanged

there is not enough information to determine what happens to output per person

Ford Motor Co. builds a new manufacturing plant

a student pursues an MBA degree

a retiree purchases Google stock

a young couple purchases a new home

situations where firms' expectations are unmet

any changes in the demand for goods and services

any changes in the supply of goods and services

a decrease in real GDP

a negative demand shock

a positive demand shock

a negative supply shock

a positive supply shock

fluctuations in the general price level

the phases a business goes through from when it first opens to when it finally closes

the evolution of technology over time

short run fluctuations in output and employment

economies experience a positive growth trend over the short run, but experience significant variability in the long run.

economies experience a positive growth trend over the long run, but experience significant variability in the short run.

economies experience positive and stable growth over both the long run and short run

economies experience little long-run growth in output, but can experience significant growth in the short run.

only civilizations such as the roman empire experienced economic growth

rates of population growth virtually matched rates of output growth

most economies realized high rates of growth in output per person

output and population growth were stagnant.

there is no difference between the two.

financial investment refers to the purchase of financial assets only; economic investment refers to the purchase of any new or used capital goods.

economic investment is adjusted for inflation; financial investment is not.

financial investment refers to the purchase of assets for financial gain; economic investment refers to the purchase of newly created capital goods.

sacrifice future consumption

print more money

offer more stocks and bonds to financial investors

sacrifice current consumption.

GDP in 2008 is $450 billion

NDP in 2008 is $450 billion

GDP in 2008 is $500 billion

inventories in 2008 fell by $50 billion

nominal GDP is rising, but real GDP is declining

net investment is negative

the economy is importing more than it exports

the economy's production capacity is expanding

current output at current prices

current output at base year prices

base year output at current prices

base year output at current exchange rates

is adjusted for changes in the volume of intermediate transactions.

includes the economic effects of international trade

has been adjusted for the changes in the price level

excludes depreciation charges

overstate economic welfare because it does not include certain non-market activities such as the productive work of housewives

understate economic welfare because it includes expenditures undertaken to offset or correct pollution.

understate economic welfare because it does not take into account increases in leisure.

overstate economic welfare because it does not reflect improvements in product quality.

NDP

GDP

NI

DI

the purchase of newly-issued shares of stock in Microsoft

the construction of a new computer chip factory by Intel

the purchase of shares of stock by Fidelity, a mutual fund company

the sale of government bonds by the nation's central bank

the price of all goods and services produced by the U.S. economy

the price of a select market basket of goods and services

the spending patterns of all consumers in the United States

the spending patterns of consumers worldwide

more human and natural resources

technological progress and innovation

an increase in the economy's stock of capital goods

an increase in total spending in the economy

a shift outward in the production possibilities curve or the united states

a shift inward in the production possibilities curve of the unites states

a movement along the existing production possibilities curve in the united states

a falling real wage for women workers of the united states

reduce the inflation rate

increase education and training

slow the growth of the standard of living

make industry more competitive in world markets

government spending

the stock of capital goods

full employment of resources

personal consumption expenditures

cannot grow more rapidly than real GDP

cannot grow more slowly than real GDP

necessarily grows more rapidly than real GDP

can grow either more slowly or more rapidly than real GDP

promotes faster population growth

lessens the burden of scarcity

eliminates the economizing problem

slows the growth of wants

information cascades

learning effects

network effects

scale economies

increases in the rate of personal saving

increased entrepreneurial activity, application of information technology, and global competition.

rising Federal budget surpluses that reduced real interest rates

expansionary monetary policy.

contend that growth and industrialization reduce pollution

argue that economic growth does not resolve socioeconomic problems such as an unequal distribution of income and wealth

point out that growth results in greater economic security for workers

say that its benefits accrue nearly exclusively to white males

full employment rate of unemployment

natural rate of unemployment

structural rate of unemployment

frictional rate of unemployment

cyclical

frictional

structural

natural

military goods and capital goods

services and non-durable consumer goods

clothing and education

capital goods and durable consumer goods

expansion

recession

peak

trough

burden of unemployment is quite evenly distributed among males and females, african-americans and whites, and young and old workers.

unemployment rate for teenagers is below the rate for the labor force as a whole

unemployment rate for women is considerably lower than that for men

unemployment rate for african-americans is about twice the rate for whites

not officially a member of the labor forces

a part of structural unemployment

a part of cyclical unemployment

a part of frictional unemployment