Micro exam 1 hw

A person can do only one of the following with her money: i) open the restaurant and get $500 in profits, ii) open a grocery store and get $600 in profits, iii) build a resort and get $1000 in profits. If a person will open a grocery store, what is an opportunity cost of this action? a. $1000 b. $500 c. $1000+$500=$1500 d. $0

A

An economy produces pies and cakes. What will the inflow of immigrants do to this economy? a. shift the production possibilities frontier outward. b. shift the production possibilities frontier inward. c. move the economy along the production possibilities frontier. d. move the economy inside the production possibilities frontier.

A

Centrally planned economies allocate resources based on decisions by ________, while market economies answer these questions through decisions made by ____________________________: a. government; households and firms. b. invisible hand; households and firms. c. monopolies, individual producers. d. households and firms, government.

A

In the grocery store, you can buy organic tomatoes for $5.00 per pound and regular tomatoes for $2.50 per pound. What is the opportunity cost of buying 2 pounds of organic tomatoes? a. 4 pounds of regular tomatoes b. one-quarter of a regular tomato c. $10.00 d. $2.50

A

Kevin makes $150 a day as a bank clerk. He takes off two days off work without pay to fly to another city to attend the concert of his favorite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50. The total economic cost (implicit+explicit) of Kevin attending the concert is: a. $600 b. $450 c. $300 d. $50

A

Mark buys a new iPhone from Apple. Choose one that applies: a. Transaction takes place in the product market. The firm supplies the good or service while the household demands the good or service. b. Transaction takes place in the product market. The household supplies the good or service while the firm demands the good or service. c. Transaction takes in the factor market. The firm supplies the good or service while the household demands the good or service. d. Transaction takes place in the factor market. The household supplies the good or service while the firm demands the good or service.

A

A point inside the production possibilities frontier is a. efficient, but not feasible. b. feasible, but not efficient. c. both efficient and feasible. d. neither efficient nor feasible.

B

Adam Smith's "invisible hand" refers to: a. the hidden methods that businesses use to profit at consumers' expense .b. the mechanism through which market economies reach desirable outcomes. c. the ability of government regulation to benefit consumers, even if they are unaware of the regulations. d. the way in which producers or consumers in unregulated markets impose costs on innocent bystanders.

B

All of the following are examples of spending on goods and services in the circular flow model except a. Amanda purchases a new electric guitar to pursue her hobby seriously. b. Chaitanya buys a new spa pedicure chair for her expanding nail salon business. c. Hernan buys a pizza at Papa C's. d. Lenny buys a new digital camera to take pictures at his son's graduation.

B

The circular flow model demonstrates a. the role of the government in overseeing the market system. b. the roles played by households and firms in the market system. c. how shortages and surpluses are eliminated in a market. d. how demand and supply for goods and services are brought into equilibrium.

B

The opportunity cost of constructing a new public highway is the: a. Money cost of hiring contractors and construction workers for the new highway b. Value of other goods and services that must be sacrificed to construct the new highway c. Expected cost of constructing the new highway in a future year d. Value of shorter driving times and distances when the new highway is completed

B

Which of the following questions is an example of a macroeconomic question? a. What is the effect of a decrease in the availability of chocolate chips on the market for chocolate chip cookies? b. What is the effect of Internet access on the cost of living? c. What is the impact of the development of a vaccine against lyme disease? d. How does an increase in the price of crude oil affect the market for minivans?

B

Without technological advancement, how can a nation achieve economic growth? a. by producing more high-value goods and fewer low-value goods b. through an increase in supplies of factors of production c. by producing more low-value goods and fewer high-value goods d. by decreasing the size of the labor force

B

A production possibilities frontier with a ________ shape indicates increasing opportunity costs as more and more of one good is produced. a. linear b. bowed inward c. bowed outward d. perfectly horizontal

C

If a nation is currently operating at a point on its production possibilities curve, in order to increase production of one good, the production of other goods must be: a. held constant. b. increased. c. decreased. d. none of the above

C

John can produce either a combination of 35 oranges and 70 apples or a combination of 50 oranges and 45 apples. If he now produces 35 oranges and 70 apples, what is the opportunity cost of producing an additional 15 oranges? a. 5 apples b. 20 apples c. 25 apples d. 45 apples

C

The production possibilities frontier assumes all of the following except a. labor, capital, land and natural resources are fixed in quantity. b. the economy produces only two products. c. any level of the two products that the economy produces is currently possible. d. the level of technology is fixed and unchanging.

C

Which of the following describes the reason why scarcity exists? a. Governments make bad economic decisions. b. The gap between the rich and the poor is too wide. c. Wants exceed the resources available to satisfy them. d. There is too much unemployment.

C

Which of the following questions is an example of a microeconomic question? a. What is the relationship between the unemployment rate and the inflation rate? b. What is the effect of an increase in the money supply on price level? c. What will be the effect of a decrease in the price of chocolate chip cookies on the quantity purchased of doughnuts? d. What is the effect of an increase in government spending on economic growth?

C

In a market economy government intervention is acceptable if government intervenes to: a. protect property rights. b. control pollution. c. promote equality in the society. d. All of the above.

D

Mark works 15 hours per week at a restaurant. Choose one that applies: a. Transaction takes place in the product market. The firm supplies the good or service while the household demands the good or service. b. Transaction takes place in the product market. The household supplies the good or service while the firm demands the good or service. c. Transaction takes in the factor market. The firm supplies the good or service while the household demands the good or service d. Transaction takes place in the factor market. The household supplies the good or service while the firm demands the good or service.

D