Chapter 1, Assignment 2

A

A market system prevent people from getting as many goods and services as they want due to which of the following? A) Their income. B) The government because it allocates the goods and services. C) Both A and B. D) Neither A and B.

A

Allocative efficiency means that A) every good is produced up to the point where marginal benefit is equal to marginal cost. B) a good or service is produced at the lowest possible cost. C) a good or service is produced as quickly as possible. D) every good or service is distributed fairly.

Government; households and firms

Centrally planned economies allocate resources based on decisions by _________, while market economies answer these questions through decisions made by ___________.

Maximizes benefits to society; is fair

Efficiency means that goods are distributed in a way that _______, while equity means that goods are distributed in a way that __________.

A

Productive efficiency means that A) a good or service is produced at the lowest possible cost. B) a good or service is produced as quickly as possible. C) every good or service is distributed fairly. D) every good or service is produced up to the point where marginal benefit is equal to marginal cost.

A

Scarcity implies that every society and every individual face trade-offs because scarcity means that A) human wants are greater than what available resources can produce. B) people are greedy and won't share with others. C) people refuse to limit their wants. D) government is unwilling to redistribute wealth.

C

The three economic questions that every society must answer are A) What are the prices goods, how are they determined, and who will pay for them? B) What economic system will be used, how will it be implemented, and eho will make market decisions? C) What goods will be produced, how will they be produced, and who will recieve the goods? D) What kind of government will the society have, how will it be run, and who will run it?

B

When does allocative efficiency occur? A) Allocative efficiency occurs when an economy achieves equity. B) Allocative efficiency occurs when production is in accordance with consumer preferences. C) Allocative efficiency occurs when an economy no longer relies on voluntary exchange. D) Allocative efficiency occurs when a good or service is produced at the lowest possible cost.

C

According to Forbes magazine, in 2019, Jeff Bezos was the world's richest person, with wealth of $136 billion. Does Jeff Bezos face scarcity? A) No, because billionaires can have anything that money can buy. B) Yes, because there is a limit to the income even billionaires can earn. C) Yes, because even though billionaires' financial resources enable them to afford a much greater array of goods and services than those less wealthy, their financial resources are not infinite. D) No, because if a billionaire cannot get the goods and services they want, someone else can get it for them.

C

Alberto Chong of Georgia State University and several colleagues conducted an experiment to test the efficiency of government postal services around the world. They mailed letters to nonexistent businesses in 159 countries and kept track of how many of the letters were returned. Was this test most relevant to evaluating the productive efficiency or the allocative efficiency of these postal services? This test that Albert Chong and his colleagues carried out was most relevant for evaluating the A) productive efficiency of these postal services because the test was designed to measure how much it cost to send and return letters in various countries. B) allocative efficiency of these postal services because the test was designed to measure how much it cost to send and return letters in various countries. C) allocative efficiency of these postal services because the test was designed to measure how often and how quickly the letters sent were returned. D) productive efficiency of these postal services because the test was designed to measure how often and how quickly the letters sent were returned.

D

Consider an organization dedicated to helping low-income people. The members of the organization are discussing alternative methods of aiding the poor, when a proponent of one particular method asserts: "If even one poor person is helped with this method, then all our time and money would have been worth it." If you were a member of the organization, what reply best represents clear economic thinking? This attitude A) is the most logical because it is focused on helping even one person. B) recognizes the fact that since the organization is a charity, there is an opportunity cost based on the square foot of other peoples' needs. C) acknowledges the importance of considering all the alternatives. D) ignores the fact that the cost of helping that one person has an opportunity cost of what those funds could have been used for to help other people.

$900,000

Every society faces trade-offs because we live in a world of scarcity. Suppose a student-athlete has the opportunity to earn $800,000 next year playing for a minor league baseball team, $900,000 next year playing for a European professional football team, or $0 returning to college for another year. The opportunity cost of the student-athlete returning to college next year is _________.

B

Firms choose how to produce the goods and services they sell. In many cases, firms face a trade-off between using more workers or using more machines. For example, A) a local service station has to choose whether to provide car repair services using more diagnostic computers to support their auto mechanics or more tools to support their auto mechanics and fewer diagnostic computers to support their auto mechanics. B) many times in the past several decades, firms may have chosen between a production method in the United States that uses fewer workers and more machines and a production method in China that uses more workers and fewer machines. C) many times in the past several decades, firms may have chosen between a production method in the United States that uses fewer machines and more workers and a production method in China that uses more machines and fewer workers. D) movie studios have to choose whether to produce animated films using more highly skilled animators to draw them by hand or fewer highly skilled animators and more low-skill animators.

B

In a market system, how does society decide who will receive the goods and services produced? A) The government determines the goods and services produced. B) Who receives the goods and services produced depends largely on how income is distributed. C) Firms determine who receives the goods and services produced. D) Consumers determine who receives the goods and services produced.

D

In a market system, what determines how goods and services will be produced? A) Consumers, firms, and the government determine together how goods and services will be produced. B) Consumers determine how goods and services will be produced. C) The government determines how goods and services will be produced. D) Firms determine how goods and services will be produced.

How income is distributed

In the United States, who receives the goods and services produced depends largely on ____________.

Yes

Leonard Fleck, a philosophy professor at Michigan State University, has written, "When it comes to health care in America, we have limited resources for unlimited health care needs. We want everything contemporary medical technology can offer that will improve the length or quality of our lives as we age. But as presently healthy taxpayers, we want costs controlled." Is it necessary for all economic systems to limit services such as health care?

A

Opportunity cost is A) the highest valued alternative that must be given up to engage in an activity. B) when consumers and firms use all available information as they act to achieve their goals. C) when unlimited wants exceed the limited resources available to fulfill those wants. D) the idea that because of scarcity, producing more of one good or service means producing less of another good or service.

Centrally planned; market

Societies organize their economies in two main ways to answer the three questions of what, how, and who. A society can have a _________ economy in which the government decides how economic resources will be allocated. Or a society can have a ________ economy in which the decisions of households and firms interacting in markets allocate economic resources.

A

Trade-offs force society to make choices, particularly when answering the following three fundamental questions: A) One, what goods and services will be produced? Two, how will the goods and services be produced? Three, who will receive the goods and services produced? B) one, what goods and services will be produced? Two, how will the goods and services be produced? Three, is the distribution of goods and services fair? C) one, what goods and services will be produced in foreign countries? Two, who will produce the goods and services? Three, who will receive the goods and services produced? D) one what goods and services will be produced domestically? Two, how will the goods and services be produced? Three, is the distribution of goods and services fair?

B

When does productive efficiency occur? A) Productive efficiency occurs when production is in accordance with consumer preferences. B) Productive efficiency occurs when a good or service is produced at the lowest possible cost. C) Productive efficiency occurs when an economy no longer relies on voluntary exchange. D) Productive efficiency occurs when an economy achieves equity.

A

Which of the following statements is true? A) All individuals face a scarcity of time and need to make choices how to allocate it. B) Most individuals face a scarcity of time, but few experience a scarcity of other resources. C) Some individuals experience scarcity because they have not learned to live within their means. D) While resources are scarce, most people don't own resources and therefore Faldo not face a scarcity of them.

Productive efficiency; allocative efficiency

_________ occurs when a good or service is produced at the lowest possible cost. __________ occurs when production is in accordance with consumer preferences.