Flashcard #1: Intro to Economic Concepts

Front

Opportunity cost can be defined as __________.

Back

the most desirable alternative given up as a result of a decision.

Front

What was the opportunity cost of the former Soviet Union producing a lot of weapons and very few consumer products with little variety?

Back

allocative efficiency

Front

Producers produce those types of products that consumers value most at the lowest opportunity cost.

Back

allocative efficiency

Front

When a home builder decides to computerize all of its production schedule, it directly answers the ___ question.

Back

how

Front

Imagine you decide to purchase a soccer ball for $35. Which of the following is an opportunity cost of your decision? Options: the time spent deciding how to spend your money, something else that could have been bought, $35 in cash, the time spent making the purchase and the tax paid on the ball

Back

something else that could have been bought

Front

Which of the following would an economist classify as a capital good? Options: company employees, a car for sale at the car dealership, the car an econ teacher uses to go to work, a car used to deliver pizza

Back

a car used to deliver pizza

Front

The study of economics is important because it enables us to

Back

become better decision makers.

Front

Of the three major economic questions, which of the following is the best example of a "What?" question? Should automobiles be produced using workers or robots? Should higher-income or lower-income people buy SUVs? Should we make faster microprocessors or pest-resistant corn? Should migrant workers or domestic workers be used to pick grapes?

Back

Should we make faster microprocessors or pest-resistant corn?

Front

Which of the following best describes the relationship between trade-offs and opportunity costs?

Back

Opportunity costs are created when trade-offs are made.

Front

Of the three major economic questions, which of the following is the best example of a "For Whom?" question? Options: Should we produce cars using workers or robots?, Should we produce cars that cost $20,000 or $60,000?, Should we produce cars with steel or aluminum?, Should we produce cars in the summer or winter?

Back

Should we produce cars that cost $20,000 or $60,000?