ECON 1311 - Exam 1 (assignment 1)

*question 33 graph

0 pounds of vegetables

Which of the following statements about scarcity is true: 1.) Scarcity refers to the situation in which unlimited wants exceed limited resources 2.) Scarcity is not a problem for the wealthy 3.) Scarcity is only a problem when a country has too large a population 4.) Scarcity only arises when there is a wide disparity in income distribution

1.) Scarcity refers to the situation in which unlimited wants exceed limited resources

Which of the following generates productive efficiency: 1.) competition among sellers 2.) competition among buyers 3.) government inspectors 4.) government production rules and regulations

1.) competition among sellers

Which of the following is motivated by an equity concern: 1.) Some states have transferred funds to food bank programs in order to increase benefits to lower-income families. 2.) Following the implementation of subsidies for energy conservation, household demand for rooftop solar panels increased quite significantly in California. 3.) The United Network for Organ Sharing advocates a system of rationing scarce kidneys that would favor young patients over old in an effort to wring more life out of donated organs. 4.) The United States offers patent protection to pharmaceutical manufacturers to prevent others from duplicating their products.

1.) some states have transferred funds to food bank programs in order to increase benefits to lower-income families

The Coffee Nook, a small cafe near campus, sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each. What is the opportunity cost of buying a cappuccino?

2 1/2 Russian tea cakes

Which of the following statements about the economic decisions consumers, firms, and the government have to make is false? 1.) Governments face the problem of scarcity in making economic decisions 2.) Only individuals face scarcity; firms and the government do not 3.) Both firms and individuals face scarcity 4.) Each faces the problem of scarcity which necessitates trade-offs in making economic decisions

2.) Only individuals face scarcity; firms and the government do not

Which of the following statements is true: 1.) Anytime you have to decide which action to take you are experiencing economic equity 2.) Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as with a stock clearance sale 3.) Every individual, no matter how rich or poor, is faced with situations that require trade-offs 4.) Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited

3.) Every individual, no matter how rich or poor, is faced with situations that require trade-offs

*question 31 graph

3/4 pound of meat

Which of the following is a result of a market economy: 1.) environmental protection 2.) an equal income distribution 3.) agreement on equity 4.) voluntary exchange

4.) voluntary exchange

*question 32 graph

4/3 pounds of vegetables

If opportunity costs are constant, the production possibilities frontier would be graphed as...

A negatively sloped straight line

The idea that because of scarcity, producing more of one good or service means producing less of another good or service refers to the economic concept of...

A trade-off

When production reflects consumer preferences, _____________ occurs.

Allocative efficiency

The revenue received from the sale of ____________ of a product is a marginal benefit to the firm.

An additional unit

Economists assume that individuals...

Are rational and respond to incentives

*question 30 graph

Attainable and technically efficient

Whenever a buyer and a seller agree to trade,

Both must believe they will be made better off

Assume that China has a comparative advantage in producing corn and exports corn to Japan. We can conclude that...

China has a lower opportunity cost of producing corn relative to Japan.

An economic principle that explains why countries produce different goods and services is...

Comparative advantage

Markets promote...

Competition and voluntary exchange

Productive efficiency is achieved when...

Firms produce goods and services at the lowest cost

How are the fundamental economic questions answered in a market economy?

Households and firms interact in markets to decide the answers to these questions

The production possibilities frontier model shows that...

If all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good

Which of the following is a positive economic statement: - The standard of living in the United States should be higher. - If the price of iPhones falls, a larger quantity of iPhones will be purchased. - The government should revamp the health care system. - The U.S. government should not have bailed out U.S. auto manufacturers.

If the price of iPhones falls, a larger quantity of iPhones will be purchased

A production possibilities frontier with a bowed-outward shape indicates...

Increasing opportunity costs as more and more of one good is produced

*question 29 graph

Inefficient in that not all resources are being used

*question 35 table

Linda has an absolute advantage in dog bathing and Sandy has an absolute advantage in dog grooming

In economics, the term ___________ means "additional" or "extra."

Marginal

In economics, the term __________ refers to a group of buyers and sellers of a product and the arrangement by which they come together to trade.

Market

The production possibilities frontier shows the ___________ combinations of two products that can be produced in a particular time period with available resources.

Maximum attainable

All of the following are part of an economic model EXCEPT: - assumptions - hypotheses - data - opinions

Opinions

The highest-valued alternative that must be given up to engage in an activity is the definition of...

Opportunity cost

*question 36 table

Sandy's opportunity cost for dog grooming is less than Linda's.

In economics, choices must be made because we live in a world of _____________.

Scarcity

Who, in a centrally planned economy, decides what goods and services will be produced with the scarce resources available in that economy?

The government

Which of the following is a normative economic statement? - The price of gasoline is too high. - The current high price of gasoline is the result of strong worldwide demand. - When the price of gasoline rises, the quantity of gasoline purchased falls. - When the price of gasoline rises, transportation costs rise.

The price of gasoline is too high

The marginal analysis involves undertaking an activity...

Until its marginal benefits equal marginal costs

Which of the following is a macroeconomic question? - What determines the growth rate of gross domestic product? - How is the production quantity of snowboards determined? - What factors determine the price of electronic cigarettes? - What determines the salaries of Wall Street executives?

What determines the growth rate of gross domestic product?

The three fundamental questions that any economy must address are:

What goods and services to produce; how will these goods and services be produced; and who receives them?

Consider the following statements: a. Car owners purchase more gasoline from a gas station that sells gasoline at a lower price than other rival gas stations in the area. b. Banks do not take steps to increase security since they believe it is less costly to allow some bank robberies than to install expensive security monitoring equipment. c. Firms produce more of a particular DVD when its selling price rises. Which of the above statements demonstrates that economic agents respond to incentives?

a, b, and c