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Macroeconomics Test 1
Exam 1 Questions
20
Economics
Undergraduate 3
06/09/2008

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Term
The Scarcity Problem
Definition
persits because exonomic wants exceed available productive resources.
Term
The law of increasing opportunity costs exists because
Definition
resources aer not equally efficient in producing various goods
Term

The alternative combinations of two goods which a consumer can purchase with a given money income is shown by

Definition
a budget line
Term
At fast food restaurants
Definition
decisions entail comparisons of marginal costs and marginal benefits
Term
The movement from line A to line A' represents a change in
Definition
the intcept only
Term
Refer to the table above. If the economy is producing at production alternative C, the opportunity cost of the tenth unit of consumer goods will be
Definition
1/3 of a unit of capital goods
Term
The above data suggests
Definition
a policy of tax reduction will increase consumption
Term
Refer to the diagram. Curve B is a
Definition
production possibilities curve indication constant opportunity costs.
Term
A person should consume more of something when its marginal
Definition
benfit exceeds its marginal cost
Term
In moving along a given budget line
Definition
the prices of both products and money income are assumed to be constant
Term
The typical production possibilities curve is
Definition
a downsloping line that is concave to the origin
Term
Refer to the above tables. The opportunity cost of the fifth unit of capital goods
Definition
is higher in North Cantina that in South Cantina
Term
Refer to the budget line shown in the diagram above if the consumer's income is $20, the
Definition
price of C is $4 and the price of D is $2
Term
Any combination of goods lying outside of the budget line
Definition
is unattainable, given the consumer's income
Term

Consumers might leave a fast food restaurant without being served because

Definition
they conclude that the marginal cost (monetary plus time costs) exceeds the marginal benefit
Term
Refer to the above tables. If south cantina is producing a production alternative D, the opportunity cost of the third unit of capital goods will be
Definition
6 units of consumer goods
Term
Which of the following is a microeconomic statement
Definition
The perice of personal computers declined last year
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