Unit 1 Review Quiz

An Opportunity Cost is...

• something that induces a person to act

• the uncompensated impact of one person’s actions on the well-being of a bystander

• whatever must be given up to obtain some item

• an incremental adjustment to a plan of action

An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services is called a(n)....

• Circular-Flow Diagram

• Market Economy

• Business Economy

• Market Power

The study of economy-wide phenomena, including inflation, unemployment, and economic growth is called...

• Econometrics

• Microeconomics

• Finance

• Macroeconomics

The study of how households and firms make decisions and how they interact in markets is called...

• Microeconomics

• Econometrics

• Macroeconomics

• Finance

(Read Carefully) Normative Statements are...

• claims that attempt to describe the world as it

• claims that attempt to prescribe how the world should be

• claims that attempt to prescribe the world as it

• claims that attempt to describe how the world should be

(Read Carefully) Positive Statements are...

• claims that attempt to describe the world as it is

• claims that attempt to prescribe how the world should be

• claims that attempt to prescribe the world as it is

• claims that attempt to describe how the world should be

A graph that shows the combinations of output that the economy can possibly produce with the available factors of production and production technology is called a(n)...

• Circular-Flow Diagram

• Market Schedule

• Productions Graph

• Production Possibilities Frontier

The ability to produce a good using fewer inputs than another producer does is called....

• Absolute Advantage

• Comparative Advantage

The ability to produce a good at a lower opportunity cost than another producer is called...

• Absolute Advantage

• Comparative Advantage

Goods produced domestically and sold abroad are called...

• Imports

• Exports