Econ Intro Test
In a mixed economy, what to produce and how much to produce are determined by
Markets and the government
the opportunity cost of producing 1 unit of herring for sweden is
1/10 unit of cell phones
the opportunity cost of producing 1 unit of herring for finland is
1/5 unit of cell phones
the opportunity cost of producing 1 unit of cell phones or sweden is
10 units of herring
If two coats are currently being produced, the opportunity cost of producing the third coat is
15 belts
According to the graph below, if a country is currently producing at point X, the opportunity cost of producing another consumer good is
20 capital goods
the opportunity cost of producing 1 unit of cell phones for finland is
5 units of herring
The 18th century enlightenment philosopher who wrote "the wealth of nations", which included the idea of the "individual hand", was
Adam smith
Each of the following is a factor of production EXCEPT
Girl shopping for shoes
Rita also likes to wear read lipstick and blue eyeshadow. The red lipstick is a
Good
Which of the following is true according to the circular flow model?
Households are demandersin the product markets and suppliers in the factor markets
For an economy with a straight-line production possibilities curve, which of the following must be true? I. The opportunity cost of producing another unit is constant II. Resources are completely adaptable to alternative uses III. Resources are used efficiently
I and II
An opportunity cost is entailed in which of the following decisions? I. A student decides to attend college full-time II. A family uses its $20,000 savings to purchase an automobile III. A farmer decides to grow more wheat and less corn
I, II, and III
On the basis of the diagram below, showing an economy's production possibilities curve for two goods, which of the following statements must be true? I. The opportunity cot of moving from point P to point R is 10 units of Y II. The opportunity cost of moving from point R to point P is 8 units of X III. The opportunity cost of moving from point Q to point R is 0 units of Y
I, II, and III
changes in which of the following factors would affect the growth of an economy I. quantity and equality of human and natural resources II. amount of capital goods available III. technology
I, II, and III
The best combination of belts and coats for this economy to produce is
Indeterminate with the available information
Resources are also known as
Inputs
Which of the following is a correct example of marginal analysis?
The added benefit of producing more dresses exceeds the additional cost of producing them
The study of economics is primarily concerned with which of the following?
The allocation of scarce resources, given unlimited wants
Goods are scarce if and only if
The amount of people want exceeds the amount available at a zero price
Monica likes to wear red lipstick, and she always wears blue eyeshadow whenever she has red lips. A resource for the eye shadow is
The person who makes the eye shadow
the "other things equal" assumption means
all relevant factors (independent variables) except one remain *unchanged* when studying an economic effect
sweden has a comparative advantage in producing
herring only
sweden has an absolute advantage in producing
herring only
the PPF illustrates that
if all resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced
the fact that a society's PPF is curved demonstrates the law of
increasing opportunity cost
all points inside the PPF represent
inefficient production points
opportunity cost
is measured by how much of one good/service a person has to forgo in order to get some stated amount of another good/service
finland has an absolute advantage in producing
neither cell phones or herring
all points outside the PPF represent
non-feasible production points
the long-run growth rate of an economy will increase (the PPC will shift out) by an increase in all of the following EXCEPT
real interest rate
a decline in the available natural resources will cause the PPF to
shift inward
a production possibility frontier (PPF) shows
that choosing to produce one good implies sacrificing production of other goods
when ina decides to buy a $200 pair of high heels instead of a $400 dress to wear to the prom, her opportunity cost is
the dress
a PPF illustrates the - facing an economy that - only 2 goods
trade-offs; produces