Chapters 1-2 EconLab1

In 2​ hours, Vanessa can make 5 quarts of ice cream or 2 cherry cobblers. Her​ friend, Sonia​, can make 9 quarts of ice cream or 1 cherry cobbler. If Vanessa specializes in ice cream and Sonia specializes in cherry cobblers, total production of ice cream will be ___ quarts of ice cream​, and total production of cherry cobblers will be ___ cherry cobbler. If Vanessa specializes in cherry cobblers and Sonia specializes in ice cream​, total production of ice cream will be ___ quarts of ice cream​,and total production of cherry cobblers will be ___ cherry cobblers. Thus Vanessa has a comparative advantage in_____​, and Sonia has a comparative advantage in______

5, 1 9, 2 Cherry cobblers, ice cream

During a debate on the floor of the U.S.​ Senate, Senator Creighton​ states, ​"Our nation should not devote so many of its fully employed resources to producing capital goods because we already are not producing enough consumption goods for our​ citizens." Compared with the other labeled points on the diagram to the​ right, the one which could be consistent with the current production combination choice that Senator Creighton believes the nation has made is ___.

C

Problem Statement​ - Demand Right Shift. ​1.) Use the line drawing tool to show the shift in the demand curve. Label this line ​'​D2'. ​2.) Use the point drawing tool to locate the new equilibrium. Label this point ​'E2​'.

D2 above D1 E2 intersects S1 D2

Problem Statement​ - Demand Left Shift. ​1.) Use the line drawing tool to show the shift in the demand curve. Label this line ​'D2​'. ​2.) Use the point drawing tool to locate the new equilibrium. Label this point ​'E2​'.

D2 line under D1 E2 intersects S1 D2

Jose can​ wash, fold, and iron a basket of laundry in two hours and prepare a meal in one hour. His roommate Roberto can​ wash, fold, and iron a basket of laundry in three hours and prepare a meal in one hour. The absolute advantage in laundry is held by The comparative advantage in meal preparation is held by

Jose Roberto

Problem Statement​ - Supply Left Shift. ​1.) Use the line drawing tool to show the shift in the supply curve. Label this line ​'S2​'. ​2.) Use the point drawing tool to locate the new equilibrium. Label this point ​'E2​'.

S2 above S1 E2 intersects S2 D1

Problem Statement​ - Supply Right Shift. ​1.) Use the line drawing tool to show the shift in the supply curve. Label this line ​'S2​'. ​2.) Use the point drawing tool to locate the new equilibrium. Label this point ​'E2​'. Carefully follow the instructio

S2 under S1 E2 intersects S2 D1

Which of the following is a normative ​statement?

The government should keep inflation from rising.

Which of the following predictions appears to follow from a model based on the assumption that​ rational, self-interested individuals respond to​ incentives? a. For every 10 exam points Myrna must earn in order to pass her economics course and meet her graduation​ requirements, she will study one additional hour for her economics test next week. b. A coin toss will best predict​ Leonardo's decision about whether to purchase an expensive business suit or an inexpensive casual outfit to wear next week when he interviews for a​ high-paying job he is seeking. c. ​Celeste, who uses earnings from her regularly scheduled hours of​ part-time work to pay for her room and board at​ college, will decide to buy a newly released DVD this week only if she is able to work two additional hours

a. Based on the rationality assumption b. Not based on the rationality assumption c. Based on the rationality assumption

Categorize each of the following conclusions as being the result of positive analysis or normative analysis a. A higher minimum wage will reduce employment opportunities for minimum wage workers. b. Increasing the earnings of minimum wage employees is​ desirable, and raising the minimum wage is the best way to accomplish this. c. Everyone should enjoy open access to healthcare d. Healthcare subsidies will increase the consumption of health care

a. Positive economics b. Normative economics c. Normative economics d. Positive economics

Economic models

can be used to explain or predict economic phenomena.

Economics is best defined as the study of

how people allocate limited resources to satisfy unlimited wants.

Like physical​ capital, human capital produced in the present can be applied to the production of future goods and services. Consider the table shown to the​ right, and suppose that the​ nation's residents are trying to choose between combination C and combination F. Other things being​ equal, will the future production possibilities curve for this nation be located farther outward if the nation chooses combination F instead of combination​ C?

no it will not

Economists assume that an individual acts as if motivated by

self-interest

Economic growth can be pictured in the accompanying diagram by

shifting the PPC upward and outward.

Which of the following would be a topic of study in microeconomics​?

the amount of steel purchases by General Motors.