Econ Final

The idea that trade can make everyone better off applies to which of the following:

Countries, states, and families benefit from the ability to trade with each other.

The main reason households and societies must make many decisions is because

resources are scarce.

Efficiency refers to the size of the economic pie; equality refers to how the pie is divided.

Efficiency means getting the maximum benefit out of our scarce resources while equality means the benefits are distributed equally among all members of society. There is a tradeoff between efficiency and equality. More of one (equality) usually means we have less of the other (efficiency).

A marginal change is best described as:

a small, incremental change from the present situation.

Nick is a guitar teacher and Raul is an accountant. If Nick teaches Raul to play the guitar in exchange for Raul helping with Nick's bookkeeping:

both Nick and Raul are made better off by the trade. trade allows individuals to specialize in what they do best and to enjoy a variety of greater goods or services.

When the government intervenes in the economy to promote equality, it means that the government is trying to:

create a more fair distribution of income. Promoting equality would be concerned with a more fair distribution of income or economic resources. Efficiency is concerned with getting the most of our economic resources.

Efficiency means our economic pie is divided into equal slices

false, Efficiency means getting the maximum benefit out of our scarce resources while equality means the benefits are distributed equally among all members of society. There is a tradeoff between efficiency and equality. More of one (equality) usually means we have less of the other (efficiency).

Normal cost of living expenses, such as room and board, are included in the opportunity cost of attending college.

false, because you would have to pay for rent and food whether you attended college or not. so therefor rent is not an opportunity cost of attending college since you would be giving up that money whether you attended college or not.

Monica has $500 to spend and wants to buy either a new snowboard or a new laptop. Both the snowboard and the laptop cost around $500, so she can only buy one. This illustrates the basic concept that:

people face trade-offs. Because no one person or society has an unlimited amount of resources, we all face trade-offs. That is, to get something we want, we usually have to give up something else. Every decision we make has an opportunity cost.

In economics, the phrase "no such thing as a free lunch" means

people face tradeoffs. To get something we want, we usually have to give up something else. Every decision we make has an opportunity cost.

Suppose a publishing company is deciding whether or not to print 50,000 additional copies of an economic textbook. The company should print the textbooks if:

the marginal benefit (additional revenue) from selling the extra books is greater than the marginal cost of printing the books. The company, acting like a rational decision maker, would print the books only if they believed the marginal benefit of doing so would exceed the marginal cost to produce the extra books.

Kurt decides to spend 2 hours working rather than hanging out with his friends. He earns $10 per hour for work. His opportunity cost of working is

the utility or enjoyment he would have gotten from hanging out with his friends. Every decision we make has an opportunity cost. That is, to do or get something we want, we usually have to give up something else that we also like.

Most countries on the planet use a market-based approach to organizing economic activity.

true

When countries trade, it is possible for both countries to benefit.

true, countries benefit from international trade.

Economics is the study of the choices people make in attempting to manage their scarce resources.

true, economics is the study of the decisions a society (people and firms) makes in managing its scarce resources.