microeconomics exam 1

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that the opportunity cost of 1 chair is

1/6 table for Ken and 1/3 table for Traci.

If Dina must work 0.25 hour to produce each taco, then her production possibilities frontier is based on how many hours of work?

100 hrs

What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600

300 socks

Morgan buys a refrigerator for his new home. To which of the arrows does this transaction directly contribute?

A and B

Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?

A woman buys corn for dinner

bagel shop sells fresh-baked bagels from 5 a.m. until 7 p.m. every day. The shop does not sell day-old bagels, so all unsold bagels are thrown away at 7 p.m. each day. The cost of making and selling a dozen bagels is $1.00; there are no costs associated with throwing bagels away. If the manager has eight dozen bagels left at 6:30 p.m. on a particular day, which of the following alternatives is most attractive?

Lower the price of the remaining bagels, even if the price falls below $1.00 per dozen

Consider two individuals, Marquis and Serena each of whom would like to wear sweaters and eat tasty food. The gains from trade between Marquis and Serena are most obvious in which of the following cases?

Marquis's skills are such that he can produce only sweaters, and Serena's skills are such that she can produce only tasty food.

Duties of the Council of Economic Advisers include

advising the president and writing the annual Economic Report of the President.

Which arrow represents the flow of goods and services?

b

suppose your management professor has been offered a corporate job with a 30 % pay increase he has decided to take the job for him, the marginal

benefit of leaving was greater than the marginal cost

It is not possible for this economy to produce at point

c

The most obvious benefit of specialization and trade is that they allow us to

consume more goods than we otherwise would be able to consume.

which is true

efficiency refers to the size of the economic pie; equality refers to how the pie is divided

A farmer has the ability to grow either corn or cotton or some combination of the two. Given no other information, it follows that the farmer's opportunity cost of a bushel of corn multiplied by his opportunity cost of a bushel of cotton

is equal to 1

Chloe's college raises the cost of room and board per semester the increase raises chloe oppurtunity cost of attending college

only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount of her college charges and increase in opportunity cost reduces chloe's incentive to attend college

While pollution regulations yield the benefit of a cleaner environment and the improved health that comes with it, the regulations come at the cost of reducing the incomes of the regulated firms' owners, workers, and customers. This statement illustrates the principle that

people face trade offs

Economists at the Department of the Treasury

provide advice on tax policy to the President.

mina decides to spend three hours working overtime rather than going to the park with her friends. she earns $20 per hour for overtime work. her opportunity cost of working is

the enjoyment she would have had if she went to the park

after much consideration you have chosen Ireland over Spain. however the deadline for your final decision is still months away and you may reverse this decision

the marginal benefit of of going to spain increases

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

the nation is not using all available resources or is using inferior technology or both.

the marginal benefit sabrina gets from purchasing a third glove is

the total benefit she gets from purchasing three pairs of gloves minus the total benefit she gets from purchasing two pairs of gloves