ECON 302 ch 1 Limits, Alternatives and choices

What is the (opportunity) cost of 6 more forklifts?

2.00 automoblies

Pham can work as many or as few hours as she wants at the college bookstore for $9 per hour. But due to her hectic schedule, she has just 15 hours per week that she can spend working at either the bookstore or at other potential jobs. One potential job, at a café, will pay her $12 per hour for up to 6 hours per week. She has another job offer at a garage that will pay her $10 an hour for up to 5 hours per week. And she has a potential job at a daycare center that will pay her $8.50 per hour for as many hours as she can work. If her goal is to maximize the amount of money she can make each week, how many hours will she work at the bookstore?

4 hours

Pham can work as many or as few hours as she wants at the college bookstore for $9 per hour. But due to her hectic schedule, she has just 16 hours per week that she can spend working at either the bookstore or at other potential jobs. One potential job, at a café, will pay her $12 per hour for up to 6 hours per week. She has another job offer at a garage that will pay her $10 an hour for up to 5 hours per week. And she has a potential job at a daycare center that will pay her $8.50 per hour for as many hours as she can work. If her goal is to maximize the amount of money she can make each week, how many hours will she work at the bookstore?

5 hours

Pham can work as many or as few hours as she wants at the college bookstore for $9 per hour. But due to her hectic schedule, she has just 18 hours per week that she can spend working at either the bookstore or at other potential jobs. One potential job, at a café, will pay her $12 per hour for up to 7 hours per week. She has another job offer at a garage that will pay her $10 an hour for up to 5 hours per week. And she has a potential job at a daycare center that will pay her $8.50 per hour for as many hours as she can work. If her goal is to maximize the amount of money she can make each week, how many hours will she work at the bookstore?

6 hours

If the economy is at point C, what is the (opportunity) cost of 2 more automobiles?

9.0 forklifts.

Why is entrepreneurial ability distinct from labor even though both are considered as a category of economic resource?

Because entreprenuerial ability is not directly engaged in production.

Which of the following is not a key element of the scientific method?

Designing data

The social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity:

Economics

If current output is such that marginal cost exceeds marginal benefit, should more or fewer resources be allocated to this product?

Fewer

The optimal amount of pizza will increase

Increases in resource supplies and advances in technology.

What are the major functions of the entrepreneur?

Innovate, take risks, and make decisions

With these curves, the optimal allocation of resources to a particular product will occur when

MB = MC

The consumer price index rose by 3.8 percent from August 2011 to August 2012:

Macroeconomics

The unemployment rate in the United States was 8.1 percent in August 2012:

Macroeconomics

U.S. output, adjusted for inflation, decreased by 2.4 percent in 2009:

Macroeconomics

Making choices based on comparing marginal benefits with marginal costs:

Marginal analysis

A U.S. software firm discharged 15 workers last month and transferred the work to India:

Microeconomics

An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise:

Microeconomics

Last week Wells Fargo Bank lowered its interest rate on business loans by one-half of 1 percentage point:

Microeconomics

The next-best thing that must be forgone in order to produce one more unit of a given product:

Opportunity cost

Which of the following best describes the concept of utility and economic behavior?

Satisfaction from consuming goods or services.

Suppose that, on the basis of a nation's production possibilities curve, an economy must sacrifice 10,000 pizzas domestically to get the 1 additional industrial robot it desires, but that it can get the robot from another country in exchange for 9,000 pizzas. Now consider the following statement: "Through international specialization and trade, a nation can reduce its opportunity cost of obtaining goods and thus 'move outside its production possibilities curve.'"Which of the following explains the relationship between the situation described and the statement?

Specialization and trade have the same effect as having more and better resources or discovering improved production techniques.

If the economy characterized by this production possibilities table and curve were producing 3 automobiles and 20 forklifts, what could you conclude about its use of available resources?

The economy is underutilizing its available resources.

Which of the following represent a normative economic statement?

The government ought to lower taxes so people have more money.

Which of the following represents a positive economic statement?

The unemployment rate is 4.8 percent.

The pleasure, happiness, or satisfaction obtained from consuming a good or service:

Utility

Potatoes cost Janice $1.10 per pound, and she has $5.00 that she could possibly spend on potatoes or other items. Suppose she feels that the first pound of potatoes is worth $1.50, the second pound is worth $1.14, the third pound is worth $1.05, and all subsequent pounds are worth $0.30. a. How many pounds of potatoes will she purchase? b. What if she only had $2.00 to spend?

a. 2 pounds b. 1 pound

Potatoes cost Janice $0.50 per pound, and she has $6.00 that she could possibly spend on potatoes or other items. Suppose she feels that the first pound of potatoes is worth $1.50, the second pound is worth $1.14, the third pound is worth $1.05, and all subsequent pounds are worth $0.30. a. How many pounds of potatoes will she purchase? b. What if she only had $3.00 to spend?

a. 3 pounds b. 10 pounds

Look at the figure below. Suppose that the cost of cheese falls, so that the marginal cost of producing pizza decreases. a. Will the MC curve shift up or down? b. Will the optimal amount of pizza increase or decrease?

a. MC will shift down b.The optimal amount of pizza will increase

How (if at all) do each of the following events affect the location of a country's production possibilities curve? a.The quality of education increases: b.The number of unemployed workers increases: c. A new technique improves the efficiency of extracting copper from ore: d. A devastating earthquake destroys numerous production facilities:

a. curve shifts outwards b. no change c. curve shifts outwards d. curve shifts inwards

Specify the typical shapes of marginal-benefit and marginal-cost curves. The marginal benefit curve is________ sloping. The marginal cost curve is __________sloping.

a. downward b.upward

Suppose that you initially have $100 to spend on books or movie tickets. The books start off costing $25 each and the movie tickets start off costing $10 each. For each of the following situations, would the attainable set of combinations that you can afford increase or decrease? a. Your budget increases from $100 to $150 while the prices stay the same: b. Your budget remains $100, the price of books remains $25, but the price of movie tickets rises to $20: c. Your budget remains $100, the price of movie tickets remains $10, but the price of a book falls to $15:

a.Increase b.decrease c.increase

The scientific method is the technique used by economists to determine

economic principles.

Because economic resources are used to produce goods and services, they are called

factors of production or inputs

Suppose a city block was going to be used for a parking lot. The opportunity cost would be

greater in New York City because the alternative uses of the block are more valuable.

Economists classify resources as

labor, land, real capital, and entrepreneurs.

Economic resources are the

natural, human, and manufactured inputs used to produce goods and services.

Is production at a point outside the production possibilities curve currently possible?

no

Why is money not considered to be a capital resource in economics? Money is not considered a capital resource because money is

not productive

Which characteristic of the production possibilities curve reflects the law of increasing opportunity costs: its shape or its length?

shape

A student will decide to attend class when

the marginal benefit of attending exceeds the marginal cost of attending.

Studies indicate that married men on average earn more income than unmarried men of the same age and education level. From this statement, we can conclude that

there is a correlation, but marriage is not necessarily the cause of higher income for married men.

In a market system scarce goods are allocated through the operation of

what must be sacrificed in using a resource for its next best use.

Could a future advance in technology allow production beyond the current production possibilities curve?

yes

Could international trade allow a country to consume beyond its current production possibilities curve?

yes