econ hw 1

published in 1776, ___ was written by Adam Smith

"An inquiry into the nature and causes of the wealth of nations"

suppose your expenses for this tern are as follows: tuition: $5000, r&b: $3000, books: $500. Further, during the term, you can only work part time and earn $4000 instead of full time salary of $10000. 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 didn't go to college?

$11,500

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

bowed outward

individuals who have never been the best at doing anything

can still have a comparative advantage in producing some product

specializing in the production of a good or service in which one has a comparative advantage enables a country to do which of the following?

consume a combination of goods that lies outside its own production possibilities frontier

T/F: to increase gas mileage, auto 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

comparative advantage means

the ability to produce a good or service at a lower opportunity cost than any other producer

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

through an increase in supplies of factors of production

T/F: a decrease in the unemployment rate may be represented as a movement from a point inside the production possibilities frontier to a point on the frontier

true

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

___ behavioral assumption about humans was that people usually act in a rational, self-interested way

Adam Smith's

the recession of 2007-2009 would most likely be represented in a production possibilities frontier graph by

a point inside the frontier

if property rights are not well enforced, all of the following are likely to occur except

a significant number of people will be willing to risk their funds by investing them in local businesses

which of the following is a factor of production?

an acre of forested land

an outward shift of a nation's production possibilities frontier can occur due to

an increase in the labor force

___ a nation's production possibilities frontier represents economic growth

an outward shift of

the opportunity cost of taking an online history class is

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

as job opportunities for women and the wages those jobs pay have increased, the opportunity cost of doing housework has ___, so many families have chosen to hire specialists in household chores, such as cleaning services and lawn care services, because the cost of these specialists is ___ than the cost of the wife or husband performing those chores

increased; lower

Adam Smith's ____ refers to the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole

invisible hand

For each bottle of wine that Italy produces, it gives up the opportunity to make 10 pounds of cheese. France can produce 1 bottle of wine for every 25 pounds of cheese it produces. Which of the following is true about the comparative advantage between the two countries?

italy has the comparative advantage in wine

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

a critical function of the government in facilitating the operation of a market economy is

setting up and enforcing private property rights

economic growth is represented on a production possibilities frontier model by the production possibility frontier

shifting outward

if the best lawyer in town is also the best at operating a word processor, then according to economic reasoning, this person should

specialize in being a lawyer because its opportunity cost is lower