quiz 1

How are economists not like mathematicians, physicists, and biologists?

They cannot run lab experiments in the same way that other scientists can.

Instead of conducting laboratory experiments to generate data to test their theories, economists often

gather data from historical episodes of economic change.

Another term for factors of production is

inputs

Where can an economy not produce?

outside its production possibilities frontier

in most societies, resources are allocated by

the combined actions of millions of households and firms

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 received had she gone to the park.

The bowed-outward shape of the production possibilities frontier can be explained by the fact that

the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing.

elena's aunt gave her $100 for her birthday with the condition that elena buys herself something. in deciding how to spend the money, elena narrows her options down to four choices: option A, option B, option C, and option D. each option costs $100. finally, she decides on option B. the opportunity cost of this decision is __________________

the value to elena of the option she would have chosen had option B not been available (next best thing)

the opportunity cost of an item is

what you give up to get that item