Macro chpt 2

All of the following questions or statements regarding tariffs are positive except

Economic analysis can decide whether a tariff proposal should be enacted.

Suppose your expenses for this term are as follows: tuition: $9,000, room and board: $1,500, books and other educational supplies: $1,000. Further, during the term, you can only work part-time and earn $3,000 instead of your full-time salary of $8,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college?

$15,000

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:

$44

Horatio can produce either a combination of 15 bird houses and 25 wind chimes or a combination of 30 bird houses and 15 wind chimes. If he now produces 30 bird houses and 15 wind chimes, what is the opportunity cost of producing an additional 10 wind chimes?

15 bird houses

"An increase in the price of oranges will increase the demand for grapefruits." This statement is an example of a normative economic statement.

False

An increase in population shifts the production possibilities frontier inwards over time.

False

The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal cost.

False

A production possibilities frontier with a ________ shape indicates increasing opportunity costs as more and more of one good is produced.

bowed outward

The slope of the ____ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good.

budget constraint

the graph above shows various points on three different production possibilities frontiers for a nation. Consider the following movements: a.from point V to point W b.from point W to point Y c.from point Y to point Z Which of the movements listed above represents advancements in technology with respect to only plastic production?

c only

Dina faces ________ opportunity costs in the production of sliders and hot wings.

constant

If opportunity costs are ________, the production possibilities frontier would be graphed as a negatively sloped straight line.

constant

"The unemployment rate is too high" is an example of a positive economic statement.

false

To increase gas mileage, automobile manufacturers make cars small and light. Large cars absorb more of the impact of an accident than small cars but yield lower gas mileage. These facts suggest that a positive relationship exists between safety and gas mileage.

false

Allocative efficiency is achieved when

firms produce the goods and services that consumers value most

Carlos Vanya grows tomatoes and strawberries on his land. A portion of his land is more suitable for growing tomatoes and the other portion is better suited for strawberry cultivation. Which of the graphs represent his production possibilities frontier?

graph c

According to the production possibilities model, if more resources are allocated to the production of physical and human capital, then all of the following are likely to happen except

the country's total production will fall.

Without technological advancement, how can a nation achieve economic growth?

through an increase in supplies of factors of production

"The distribution of income should be determined by the government" is an example of a normative economic statement.

true

Any output combination inside a production possibilities frontier is associated with unused or underutilized resources.

true

If a country is producing efficiently and is on the production possibilities frontier, producing more of one good would result in a movement along the frontier.

true

Which of the following generates allocative efficiency in a market economy?

voluntary exchange between buyers and sellers

Alex has a budget of $100 a month for movie tickets and restaurant meals. A movie ticket will cost $10, and a restaurant meal costs $20. Which of the following combinations is part of Alex's budget constraint?

2 movie tickets and 4 restaurant meals

Carmelita can perform either a combination of 35 manicures and 70 pedicures or a combination of 50 manicures and 45 pedicures. If she now performs 35 manicures and 70 pedicures, what is the opportunity cost of performing an additional 15 manicures?

25 pedicures

Which of the following statements is TRUE?

A budget constraint shows the limits on an individual's consumption, while a production possibility frontier shows the limits on an economy's production.

Which of the following is a normative economic statement?

Global warming should be at the top of every economic agenda.

Which of the following is a positive economic statement?

If the price of gasoline rises, a smaller quantity of it will be bought.

The utility patterns in the table illustrate the law of marginal diminishing utility because ...

The increase in utility for each additional hour Martha exercises falls

Which of the following is a positive economic statement?

The minimum wage law causes unemployment.

________ shows that if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.

The production possibilities frontier model

"A decrease in the price of digital cameras will decrease the demand for camera film." This statement is an example of a positive economic statement.

True

Consider a country that produces only two goods: bird feeders and binoculars. Suppose it is possible for this country to increase its production of bird feeders without producing fewer binoculars. In this case, its current output combination is inefficient.

True

On a production possibilities frontier, opportunity cost is represented by the slope of the production possibilities frontier.

True

Which of the following would most likely shift the production possibilities curve inward?

a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time

The graph above shows various points on three different production possibilities frontiers for a nation. Consider the following events: a.an increase in the unemployment rate b.general technological advancement c.an increase in consumer wealth Which of the events listed above could cause a movement from Z to V?

a only

What does the term "marginal" mean in economics?

an additional or extra

The graph above shows various points on three different production possibilities frontiers for a nation. Consider the following movements: a.from point V to point W b.from point W to point Y c.from point Y to point Z Which of the movements listed above represents advancements in technology with respect to both plastic production and food production?

b only

The opportunity cost of taking an on-line history class is

equal to the highest value of an alternative use of the time and money spent on the class.

The opportunity cost of an action

is a subjective valuation that can be determined only by the individual who chooses the action.

A normative statement reflects opinions or beliefs, while a positive statement...

is based on facts

Most real-world choices aren't about getting all of one thing or another, instead, most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good.

marginal analysis

Competition forces firms to produce and sell products as long as the ________ to consumers exceeds the ________ of production.

marginal benefit; marginal cost

Attending college is a case where the ____ exceeds the monetary cost.

opportunity cost

In many cases, it is reasonable to refer to the ________________ as the price.

opportunity cost

The concept of ________ is that the economic cost of using a factor of production is the alternative use of that factor that is given up.

opportunity cost

The slope of a production possibilities frontier measures the ________ of producing one more unit of a good.

opportunity cost

If the production possibilities frontier is linear, then

opportunity costs are constant as more of one good is produced.

Economic growth is represented on a production possibilities frontier model by the production possibilities frontier

shifting outward

Opportunity cost is defined as

the highest valued alternative that must be given up to engage in an activity.