Exam 1: Limits, Alternatives, and Choices

The purpose of the ceteris paribus assumption used in economic analysis is to:

From the "economic perspective," people make purposeful decisions based on hypotheses.

Refer to the above graph.The shift of the budget line from AB to CD is consistent with:

When producers maximize their profits from the production of a good or service,they are:

The individual who brings together economic resources and assumes the risk in a capitalist economy is called the:

A point inside the production possibilities curve is:

The basic economic problem is essentially one of deciding how to make the best use of:

Economic models do not reflect the full complexity of reality and instead are based on:

The concave,or bowed-out,shape of the production possibilities curve illustrates the law of increasing opportunity costs.

Economics is the study of the efficient use of scarce resources to achieve maximum satisfaction of economic wants.

Which would be considered a macroeconomic study? A study of the effect of:

The statement that "the unemployment rate will increase as the economy moves into a recession" is an example of:

If an economy is producing at a point inside a production possibilities curve:

Scaling back the U.S."war on terror" would:

The utility of a specific product:

The marginal cost curve for a product slopes upward as more units are produced because of the law of increasing costs.

Money is not considered to be an economic resource because:

Among competing issues,the most important concern of economics is with the:

The following economy produces two products. Refer to the above table.The marginal opportunity cost of the fourth unit of tanks is:

Assume that a consumer purchases two products and the consumer's money income increases.All other things equal,the most likely effect is: