ECON 1101 Week 1 HW Questions

When a California farmer decides to harvest lettuce using machines instead of by migrant workers, the farmer is answering the ________ part of one of the two big economic questions. A) "how" B) "for whom" C) "scarcity" D) "what"

A) "how"

When an economy produces more houses and fewer typewriters, it is answering the ________ part of one of the two big economic questions. A) "what" B) "how" C) "where" D) "for whom"

A) "what"

Suppose that the government of New York state promises to decrease taxes to a firm if it decides to stay in New York instead of moving to another state. This policy on the part of the state constitutes ________, to make the ________ of the firm remaining in New York. A) an incentive; marginal benefit exceed the marginal cost B) an incentive; marginal cost exceed the marginal benefit C) a command; marginal benefit exceed the marginal cost D) a command; marginal cost exceed the marginal benefit

A) an incentive; marginal benefit exceed the marginal cost

Factors of production are grouped into four categories: A) land, labor, capital, entrepreneurship B) land, labor, capital, money C) land, capital, money, entrepreneurship D) labor, capital, money, entrepreneurship

A) land, labor, capital, entrepreneurship

Scarcity is a situation in which A) people cannot satisfy all their wants. B) most people can get only bare necessities. C) people can satisfy all their wants. D) some people can get all they want and some cannot.

A) people cannot satisfy all their wants.

On Saturday morning, you rank your choices for activities in the following order: go to the library, work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to go to the library. Your opportunity cost is ___. A) working out at the gym, having breakfast with friends, and sleeping late. B) working out at the gym. C) zero because you do not have to pay money to use the library. D) not clear because not enough information is given.

A) working out at the gym, having breakfast with

The fact that a rock star earns $5 million a year while a teacher earns $25,000 annually is most directly an example of an economy answering the ________ part of one of the two big economic questions. A) "when" B) "for whom" C) "how" D) "why"

B) "for whom"

In economics, the term "land" means A) only land that is used in agricultural production. B) land, mineral resources, and nature's other bounties. C) land that is devoted to economic pursuits. D) land used for agricultural and urban purposes.

B) land, mineral resources, and nature's other bounties.

Economics is best defined as the study of how people, businesses, governments, and societies A) choose abundance over scarcity. B) make choices to cope with scarcity. C) use their infinite resources. D) attain wealth.

B) make choices to cope with scarcity.

The study of the decisions of individual units in the economy is known as A) macroeconomics. B) microeconomics. C) the study of incentives. D) ceteris paribus study.

B) microeconomics.

The term used to emphasize that making choices in the face of scarcity involves a cost is __. A) substitution cost. B) opportunity cost. C) utility cost. D) accounting cost.

B) opportunity cost.

You have the choice of going on vacation to Florida for one week, staying at work for the week, or spending the week doing fix-up projects around your house. If you decide to go to Florida, the opportunity cost of the trip is A) working and doing fix-up projects. B) working or doing fix-up projects, depending on which you would have done otherwise. C) working, because you would be giving up dollars. D) nothing because you will enjoy the trip to Florida.

B) working or doing fix-up projects, depending on which you would have done otherwise.

When firms in an economy start producing more computers and fewer televisions, they are answering the ________ part of one of the two big economic questions. A) "when" B) "for whom" C) "what" D) "where"

C) "what"

Which of the following is NOT a factor of production? A) vans used by a bakery company for deliveries B) a person developing a production schedule for a new product C) 175 shares of Microsoft stock D) wilderness areas that have yet to be developed

C) 175 shares of Microsoft stock

Which of the following questions is a macroeconomic issue? A) How many more pounds of cookies will a consumer purchase if the price of cookies decreases? B) What effect would a cure for Mad Cow Disease have on the market for beef? C) What is the future growth prospect for an economy? D) How many workers should the owner of a business hire?

C) What is the future growth prospect for an economy?

All economic questions are about A) how to make money. B) what to produce. C) how to cope with scarcity. D) how to satisfy all our wants.

C) how to cope with scarcity.

A store remains open from 8 a.m. to 4 p.m. each weekday. The store owner is deciding whether to stay open an extra hour each evening. The owner's marginal benefit A) is the benefit the owner receives from staying open from 8 a.m. to 5 pm. B) depends on the revenues the owner makes during the day. C) must be greater than or equal to the owner's marginal cost if the owner decides to stay open. D) is the benefit the owner receives from staying open from 8 a.m. to 6 pm.

C) must be greater than or equal to the owner's marginal cost if the owner decides to stay open.

Which of the following is a macroeconomic decision or concept? A) the price of oil B) how many television sets to produce C) the unemployment rate for the entire economy D) the unemployment rate for each firm

C) the unemployment rate for the entire economy

Which of the following is an example of a microeconomic decision? A) an individual deciding how to allocate the time he or she has for work and leisure B) a small shoe factory deciding how much leather to purchase for the next quarter's production need C) a multinational company deciding where to relocate its world headquarter D) All of the above answers are correct.

D) All of the above answers are correct.

An inducement to choose a particular action is called A) the marginal benefit. B) the marginal cost. C) opportunity cost. D) an incentive.

D) an incentive.

Samantha goes to college to become an engineer. This is an example of an ___. A) investment in physical capital. B) investment in human capital. C) increase in entrepreneurship. D) increase in labor.

D) increase in labor.

Macroeconomics differs from microeconomics in that: A) macroeconomics studies the decisions of individuals. B) microeconomics looks at the economy as a whole. C) macroeconomics studies the behavior of government while microeconomics looks at private corporations. D) macroeconomics focuses on the national economy and the global economy.

D) macroeconomics focuses on the national economy and the global economy.

Making a choice at the margin means ________. A) letting someone else choose for you B) waiting until the last minute to make a choice C) deciding to do a little bit more or a little bit less of an activity D) making a choice by comparing the total benefit and the total cost

D) making a choice by comparing the total benefit and the total cost

What are the 4 types of income in association with factors of production?

1. Land = rent 2. Labor = wages 3. Capital = interest 4. Entrepreneurship = profit

What are the 2 big questions of Economics?

1. a. How to choices end up determining what, how, and for whom goods and services are produced? 2. How do things that we do in our self-interest also promote social interest?