Micro Economic Module 1-4

Suppose the economy is operating at point B. The opportunity cost of producing the third freight train would be:

45 tones of sugar

The production possibility curve illustrates that:

C. 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

If resources are "scarce" it means that:

They cannot provide enough goods or services to satisfy all human material wants and needs at zero cost

The opportunity cost of producing 1 radio in Omegaland is

a. 1/2 tire

Economists generally agree that ____ is an appropriate policy goal

c. gradual inflation with occasional depressions

Which of the following methods of encouraging recycling is likely to be most effective?

c. imposing a tax per unit of garbage generated

Alison is offered two jobs: one pays a salary of $45,000 per year and offers three weeks of vacation, while the other offer provides two weeks of vacation and a salary of $54,000. What is the opportunity cost for Alison if she chooses the job offer of $54,000?

c. one week of vacation

A key theme fundamental to all of economics is:

c. people have unlimited wants and face limited means to satisfy them.

Imports are good and services that are

c. purchased from another country

The cost of going to college, rather than working full time instead , is

c. tuition, the cost of housing, the cost of books, and forgone income.

If the o.c. of manufacturing machinery is lower in the U.S. that in Britain and the o.c. of manufacturing sweaters is higher in the U.S. than in Britain, then the U.S. will

d. import sweaters form Britain and export machinery to Britain

The point on a business cycle when aggregate output stops falling and begins rising is a

e. business cycle trough

Inflation:

e. is an increase in the overall level of prices

To encourage young people to go to college within their home state, state universities can:

e. offer lower tuition to in-state students

Scarcity in economics means:

e. society is unable to produce all the goods and services we want with existing resources

Inflation is a situation where:

e. the average price level increases

an example of a positive statement is:

the rate of unemployment is 4%

Japan, at the point at which it is currently producing must give up the production of 100 computer s to produce 25 additional cellular telephones. which of the following is the o.c. of producing 4 computers?

a. 1 cellular telephone

The opportunity cost of producing 1 unit of oranges for Eastland is

a. 1 unit of peaches

The opportunity cost of producing 1 unit of peaches for Eastland is

a. 1 unit of peaches

If large town decides to devote half of its 80 hours of labor time toward the production of socks and half to the time to the production of shirts, what is the maximum number of socks and shirts it can produce?

a. 10 shirts and 20 socks

Too little spending in an economy often leads to:

a. a recession

When coca-cola builds another beverage bottling plant in Ohio, the nation's ____ resources are increased.

a. capital

with trade, a country may

a. consume outside its production possibility curve

The movement form Curve 1 to curve 2 indicates

a. economic growth

Which of the following questions is appropriate to the study of macroeconomics?

a. how does the aggregate price level affect overall consumer spending?

Points X, Y, and Z

a. indicate combinations of cars and computers that society can produce using all of its resources efficiently

Point V:

a. it is unattainable, all other things unchanged

the current rate of unemployment of 5% is too high. This is a ____ statement.

a. normative

The _____ illustrates the trade-offs facing an economy that produces only two goods.

a. production possibility curve

Periods in which output and employment are falling are known as

a. recessions

"In Ventura Country, California, strawberry production is limited by the number of acres suitable for agriculture production." This statement best represents the economic concept of:

a. resources are scarce

Of the following statements, which reflects a normative view?

a. the U.S. needs to increase the minimum wage to $10 per hour.

Which of the following is an example of a positive statement?

a. the poverty rate is 4%

An economist that studies the macro economy is most concerned with:

a. the rise and fall of national income

Which of the following measures is typically used as an indicator of the conditions in the labor market?

a. the unemployment rate

Two nations can mutually benefit from trade if:

a. there are differences in the opportunity costs of producing goods.

If the economy were producing 8 unites of guns and 12 units of butter per period:

a. this is a possible choice, but would involve unemployment and/or inefficiency

The opportunity cost of producing 1 unit of peaches for Westland is

b. 1/4 unit of oranges

The opportunity cost of producing 1 unit of herring for Finland is

b. 1/5 unit of cell phones

If Japan, at the point where it is currently producing, must give up the production of 100 computers to produce 25 additional cellular telephones, the opportunity cost of producing 4 cellular telephones is ________ computers.

b. 16

The opportunity cost of producing a unit of wheat in Country B is

b. 3 toys

which point or points would represent efficient combinations of wine and wheat that Tom could choose to produce?

b. B and D

Last month, unemployment decreased to its lowest level in 10 years. This statement is an example of:

b. a positive economic statement

The movement from point B to C is called

b. and expansion

The student center on campus has burritos, bagels, or burgers for lunch, and they all cost the same. You decide to have a burger today, but if they were out of burgers, you would have bought a bagel. Your opportunity cost is:

b. bagel

when the overall price level decreases over time, this will

b. be referred to as deflation

An economy that has the lowest opportunity cost for producing a particular good is said to have a

b. comparative advantage

The process through which an economy's production possibility curve is shifted outward is

b. economic growth

Goods and services that are produced in a foreign county but consumer domestically are called___ by the consuming nation

b. imports

goods and services purchases from abroad are ____, while goods and services sold abroad are _____

b. imports;exports

In the figure, if Tealand is producing 10 million scones and 10 million cups of tea then we know that the economy

b. is using its resources inefficiently

Suppose people in households decide to spend less. How will this impact an economy?

b. it will decrease the level of income of other people since household spending becomes someone else's income

the U.S. production possibility curve will ____ if there is a late influx of immigrants to the labor force.

b. shift out

The local Taco Hut charges the same price for everything on its menu

b. the burrito

A depression occurs when

b. the economic downtown becomes extremely deep and prolonged

The primary emphasis in macroeconomics is on:

b. the national economy

The cost of leaving a championship soccer match before it ends is ___, while the cost of staying for the entire matches ____.

b. the o.c. of not seeing the winning goal with two minutes to go; the o.c. of what else you could have done during that time

When a chef creates a dinner plate of food for a customer, which of the following represents the physical capital resource?

b. the oven

Suppose government economists recommend that policymakers should either increase taxes or decrease government spending. This recommendation was most likely based on the fact that:

b. too much spending was sousing inflation

The best measure of the opportunity cost of any choice is:

b. whatever you have given up to make that choice, even if no monetary costs are involved.

Which of the following is most likely a macroeconomic question rather than a microeconomic question?

c. "Are salaries for nurses rising or falling?"

If the economy produces 2 units of consumer goods per period, it also can produce at most ___ units of capital goods per period.

c. 24

the production possibly curve will shift outward for which of the following reasons?

c. better technology that improves worker productivity

The alternation between periods of economic growth and economic decline is know as the:

c. business cycle

when two nation specialize and trade based upon comparative advantage, we know that

c. each nation consumes at a point outside their production possibility curve.

In the figure, Tealand can only experience point E if the government

c. encourages more immigration to expand the size of the work force

Resources are being used efficiently when:

c. every opportunity to make people better off has been utilized

a period of rising real gross domestic product is an indicator of an

c. expansion

If the o.c. of manufacturing machinery is higher in the U.S. that in Britain and the o.c. of manufacturing sweaters is lower in the U.S. than in Britain, then the U.S. will

c. export sweaters to Britain and import machinery from Britain

If the production possibilities curve is a straight line sloping down from left to right this would suggest that:

c. the opportunity cost of producing each good is constant

which of the following is a normative statement?

c. we would all be better off if we could reduce our dependence on oil imports.

which of the following is a microeconomic question rather than a macroeconomic question?

d. "will an increase in the cigarette tax cause a decrease in the number of smokers?"

A friend comes up to you and offers to give you a free ticket to the local professional team's baseball game that night. ...What is the cost to you of attuning the game?

d. $55

At the point at which it is currently producing, the U.S. must give up the production of 500 bicycles to produce 20 additional tractors. The o.c. of producing 5 tractors is ____ bicycles.

d. 225

The U.S. can produce 30 computers for every car it produces, and Japan can produce 15 computer for every car it produces. Based on this information, which of the following statements is incorrect?

d. Japan has an absolute advantage in car production

In terms of the production possibility curve, inefficient use of available resources is shown by:

d. a point located inside the production possibility curve

If there is a tremendous natural disaster, the effect can be shown by:

d. an inward contraction of the production possibility curve

An economy is said to have a comparative advantage in the production of a good if it

d. has the lowest opportunity cost for producing a particular good

A nation's copper mines is part of that nation's___ resource.

d. land

this production possibility curve is

d. linear because of constant opportunity costs

If an economy is producing a level of output that is on its production possibility curve, the economy has

d. no idle resources and is using resources efficiently

Florida schools offered cash bonuses to students who scored high on the states standardized exams. The cash bonuses are and example of how

d. people usually respond to incentives

Which is not an example of a resource?

d. production

We have to make choices because:

d. resources are scarce and because choices involve a trade-off.

which of the following statements is a normative statement?

d. the best way to encourage growth in the economy is through government spending.

Opportunity cost is:

e. the value of the best alternative forgone in making any choice.

Economists are generally in support of

free international trade