Kelani Economics test one Chp 2

Mexico; Canada

Canada can make a book in one hour, and Mexico can make a book in three hours. Canada can make a car in 100 hours, and Mexico can make a car in 150 hours. _______ has a comparative advantage in cars, and ________ has a comparative advantage in books.

Both c and d ,Opportunity costs, The highest-valued alternative that must be forgone when a choice is made.

What do economists mean when they refer to the forgone opportunities or forgone benefits of the next-best alternative?

Opportunity costs

Which economic concept is the closest parallel to the saying "There's no free lunch"?

decreasing the quantity of other types of goods that are produced.

A production possibilities curve shows that more of one type of good can be produced only by

must forgo the production of nondefense goods, ceteris paribus.

According to the textbook's discussion of the production possibilities curve, a nation cannot produce as much of both defense goods and nondefense goods as it wants. Thus, when a nation produces more defense goods, by definition that nation

(Bob values) True

Bob went to the movies with his friend James rather than studying or going bowling with his sister. Bob had a test in math the next day. According to the story , Bob values going to the movies with James more then going bowling with his sister.

(the opportunity costs ) False

Bob went to the movies with his friend James rather than studying or going bowling with his sister. Bob had a test in math the next day. According to the story , the opportunity costs of going to the movies are the fun of bowling with his sister and the better grade in math, which he would receive if he studied.

.02 car; 100 books

Canada can make a book in one hour, and Mexico can make a book in three hours. Canada can make a car in 100 hours, and Mexico can make a car in 150 hours. The opportunity cost of a book in Mexico is _______, and the opportunity cost of a car in Canada is ________.

Cannot determine from the information given.

Consider the graph (PPCurve ABDF on curve, C inside and E outside), The optimal point for the economy is

it is possible to produce more of one good without sacrificing some of the other good only if production is occurring at a point inside the PPC.

Consider the graph (PPCurve ABDF on curve, C inside and E outside), The production possibilities curve in the figure above indicates that

the opportunity cost incurred in purchasing the item or activity.

In economics, the cost of any item or activity always includes

the Chinese food that you gave up when you chose to eat Italian food.

One example of opportunity cost is A) the Chinese food that you gave up when you chose to eat Italian food. B). the tuition that you pay to attend college. C.) for a professor of economics, the pleasure that he or she derives from teaching economics. D). sweets given up by a person who would never eat them even if he or she could. E). the price paid for a ticket when you go to the movies.

$100 million, and 20 miles of light rail

The city of Austin can buy roads or light rail. If 10 miles of roads cost $1 million and 2 miles of light rail cost $10 million, what is the city's opportunity cost of 1000 miles of roads?

Canada; Canada

Canada can make a book in one hour, and Mexico can make a book in three hours. Canada can make a car in 100 hours, and Mexico can make a car in 150 hours. _______ has an absolute advantage in cars, and ________ has an absolute advantage in books.

The economy could produce bundle A in 2001 or it could produce bundle D in 2001.

Consider the graph (PPCurve ABCD on curve, E inside and F outside), showing the 2001 production possibilities curve for an economy that produces only guns and butter. Which of the following statements is true of this economy?

The economy's production is characterized by increasing marginal opportunity costs.

Consider the graph (PPCurve ABCD on curve, E inside and F outside), showing the 2001 production possibilities curve for an economy that produces only guns and butter. Which of the following statements is true of this economy?

it is possible for the economy to produce more X and Y with the given resources.

Consider the graph (PPCurve ABDF on curve, C inside and E outside), Assume the economy is operating at point C. This indicates that

All of the above.

Consider the graph (PPCurve ABDF on curve, C inside and E outside), Point E A) cannot be obtained with the existing resources. B) may be attained with a sufficient improvement in technology. C) may be attained with the discovery of sufficient new resources. D) may be attainable as economic growth occurs. E) All of the above.

A

In the above figure (A. Planes vs Corn PPC shrinking B.Planes Vs. Corn Corn side increasing and Planes side stationary C. Planes vs. Corn PPC graph increasing ), if the economy produces only corn and planes and there is a 20% drop in the work force, graph(s) ____ describe(s) the change in the economy's PPC.

B

In the above figure (A. Planes vs Corn PPC shrinking B.Planes Vs. Corn Corn side increasing and Planes side stationary C. Planes vs. Corn PPC graph increasing ), if the economy produces only corn and planes and there is an increase in the effectiveness of pesticides, which graph(s) represent(s) the shift in the PPC?

C

In the above figure //A.) Planes vs Corn PPC shrinking ;B).Planes Vs. Corn Corn side increasing and Planes side stationary ;C). Planes vs. Corn PPC graph increasing //, if the economy produces only corn and planes and there is an increase in the education level of the population, graph(s) _____ best illustrate(s) what will happen to the PPC.

(are the number of times) False

Opportunity costs are the number of times one has the opportunity to assess the cost of doing something.

(becoming a professional golfer) True

The opportunity cost of becoming a professional golfer, for Tiger Woods, includes a bachelor's degree from Stanford University.

Giving up one good or activity in order to obtain some other good or activity

Which of the following is the best definition of the concept of a tradeoff, as discussed in the text? A) The tuition you pay to attend college ; B) The price of a movie ticket at prime time; C) Not having enough information available to make a rational decision; D) Giving up one good or activity in order to obtain some other good or activity; E) Having your cake and eating it too

Money spent on living expenses that are the same whether or not you attend college

Which of the following should not be considered an opportunity cost of attending college?

Opportunity costs can always be expressed in money terms.

Which statement concerning opportunity costs is not true? A) Opportunity costs can always be expressed in money terms.; B) Every choice involves opportunity costs.; C) Opportunity costs are the highest-valued alternatives that must be forgone when a choice is made.; D) The full cost of an activity includes the opportunity costs.; E) Economists refer to the forgone benefits of the next-best alternative as opportunity costs.