Econ 1000 Week 1 Chapter 1
Given that resources are scarce,
opportunity costs are experienced whenever choices are made
Economic growth is represented by:
the outward shift of the production possibilities curve
Starting from point A on the production possibilities line where 30 units of timber and no food is produced, suppose that we choose to produce more food by moving one parcel of land out of timber production and into food production. In order to minimize the opportunity cost of producing more food, the first plot to be re-purposed should be..
A
Explains why economic choices must be made
The factors of production are scarce
The opportunity cost of playing tennis with your friend is:
the next-best alternative use of your time that is forgone
Assuming all parcel of land are the same, there is a constant trade-off in the production of timber and food. When all land is in use, one more unit of food produced will require...
two fewer units of timber produced
Opportunity cost may be defined as the:
value of goods or services that are forgone in order to obtain something else
Economic models
Focus on basic relationships
Which of the following statement is consistent with central planning?
Government planners play the dominant role in deciding how resources are allocated
In the model where we assume that all five parcels of land are NOT the same, the relationship between food and timber produced when all land is in use is:
Inverse and nonlinear
Which of the following is true about the factors of production?
The factors of production as well as technology determine the physical limits to production
Which of the following is the best example of the "WHAT" economic question?
What is the optimal mix of output?
According to the Latin phrase Ceteris Paribus
nothing else changed
Welfare programs are designed to address the;
"FOR WHOM" question
When society struggles with how to divide up the "economic pie," it is responding to the
"FOR WHOM" question
When society searches for the optimal method of producing goods and services, it is responding to the:
"HOW" question
Macroeconomics focuses on
the economy as a whole
Assuming all land is equally productive in either use, how much output of each type will be produced with 2/5 of the land in timber production and 3/5 of the land in food production?
12 units of timber and 9 units of food
In Table 1.1, the lowest opportunity cost of houses in terms of missiles is:
.00010 of a missile per house
In Table 1.1, the opportunity cost of increasing the production of houses from 17,000 to 21,000 in terms of missiles per house is:
0.00025 of a missle
It is not possible for society to produce this combination with current resources and technology, select the appropriate point
A (outside the curve)
In economics, which of the following is the best example of capital?
A computer used by a lawyer to prepare legal documents
Which of the following individuals is typically associated with laissez faire economic policy?
Adam Smith
Central planning is the principal method for making economic decisions in:
North Korea
A HEADLINE article in the text indicates that North Korea is running out of food. If North Korea is on its production possibilities curve and reduces its production of food so that it can increase the size of its military, this is most consistent with:
a movement along the production possibilities curve
Which of the following is associated with microeconomics?
an increase in sales for a chain of pet supply stores
Ceteris paribus when technological change allows a smaller amount of a resource to be used in producing any combination of two goods, there will be
an outward shift of the production possibilities curve
Which of the following best describes the way resources are allocated in the US economy?
by markets
If resources are limited:
choices that involve tradeoffs must be made
In economics, capital refers to:
goods that can be used to produce other goods
The primary concern of economics is the study of:
how best to allocate scarce resources among competing uses
Ceteris paribus, if North Korea increases the size of its military, then:
its production of consumer goods will decrease
Assuming the level of resources and technology are constant, if France decreases the size of its military, then:
its' production of consumer goods can increase
Which of the following is most consistent with a market economy?
laissez faire
In the model where we assume that all parcels of land are the same, the relationship between food and timber produced when all land is in use is:
linear and inverse
Which of the following is associated with microecon?
not "the country's unemployment rate"
Which of the following is NOT an assumption under which the production possibilities curve is drawn?
not "the economy's resources are fully employed"
Assuming all parcels of land are the same, when all land is in use, one more unit of timber produced will require...
one-half fewer units of food produced
The essential signal of the market mechanism is:
price
Which of the following best describes the "invisible hand"?
price signals drive the market mechanism
In attempting to answer the WHAT question, a society seeks to:
produce the optimal mix of output
The market mechanism:
relies on prices and sales to communicate consumer wants to producers
The central problem of economics is the
scarcity of resources relative to human wants