Chapter 1 HW

"How much" is a decision at the margin.

After swimming 100 laps at the pool, Erik decides to swim 10 more before lifting weights. This statement best represents this economic concept: -The real cost of something is what you must give up to get it. -"How much" is a decision at the margin. -There are gains from trade. -Resources are scarce.

all opportunities to make some people better off without making other people worse off have been taken.

An economy is efficient when: -all opportunities to make some people better off without making other people worse off have been taken. -all opportunities to make some people worse off without making other people better off have been taken. -output is distributed equitably. -the problem of scarcity is eliminated.

scarce resources.

Corner offices in high-rise office buildings usually cost more to rent than other offices. This best illustrates the economic principle of: -marginal analysis. -resources being used as efficiently as possible to achieve society's goals. -scarce resources. -opportunity costs.

People usually take advantage of opportunities to make themselves better off.

Florida schools offered cash bonuses to students who scored high on the state's standardized exams. The cash bonuses are an example of this economic principle: -People usually take advantage of opportunities to make themselves better off. -Resources are scarce. -There are gains from trade. -The real cost of something is what you must give up to get it.

living standards would fall.

If every individual were required to be self-sufficient: -living standards would fall. -it's impossible to say how living standards would change. -living standards would rise. -living standards for some individuals would fall, but for others they would rise.

may be efficient.

If in Equitania, 20% of the population receive 80% of the income and the remaining 80% of the population receive 20% of the income, Equitania's economy: -may be efficient. -is neither efficient nor equitable. -cannot be efficient, since efficiency requires a more nearly equal distribution of income.is efficient.

the working of the entire economy or large sectors of it.

Macroeconomics deals with: -how a business unit should operate profitably. -bits and pieces of the economy. -the working of the entire economy or large sectors of it. -how individuals make decisions.

whatever she would have purchased with the $10,000 plus whatever she would have earned had she not been in college.

Margo spends $10,000 on one year's college tuition. The opportunity cost of spending one year in college for Margo is: -whatever she would have purchased with the $10,000 plus whatever she would have earned had she not been in college. -$10,000. -whatever she would have purchased with the $10,000 instead. -whatever she would have earned had she not been in college.

individual actions have side effects that are not properly taken into account.

Market failure occurs when: -mutually beneficial trades take place. -a business declares bankruptcy. -individual actions have side effects that are not properly taken into account. -prices of essential goods such as gas become very high.

individuals can have more of one good but only by giving up something else.

Scarcity exists when: -resources are unlimited. -making choices among two or more alternatives is not necessary. -individuals can have more of any good without giving up anything. -individuals can have more of one good but only by giving up something else.

government policies can change spending.

Sometimes the government varies its spending, depending on the needs of the country. This statement best represents economic concept that: -overall spending sometimes gets out of line with the economy's productive capacity. -government policies can change spending. -resources should be used as efficiently as possible to achieve society's goals. -when markets don't achieve efficiency, government intervention can improve society's welfare.

When markets don't achieve efficiency, government intervention can improve society's welfare.

The federal government regulates how much carbon dioxide a factory can emit. This statement best represents this economic concept: -When markets don't achieve efficiency, government intervention can improve society's welfare. -Markets usually lead to efficiency. -"How much" is a decision at the margin. -Resources are scarce.

the study of how decisions are made in the context of scarcity

What is economics

studies the decisions made by individual consumers

What is microeconomics

the oven.

When a chef prepares a dinner for a customer, which of the following is physical capital? -the chef's training and experience. -the food ingredients. -the oven. -the chef

Unemployed factory workers have lower incomes and are less likely to dine out.

When a factory closes, why does it spell bad news for the local restaurants? -Unemployed factory workers are eligible for government unemployment benefits. -Sales taxes are likely to increase. -Unemployed factory workers have lower incomes and are less likely to dine out. -The opportunity cost of dining out has fallen.

society may be worse off in some cases.

When individuals act in their own self-interest: -society may be worse off in some cases. -efficiency is always achieved. -all opportunities have been taken to make some people better off without making other people worse off. -equity is always achieved.

Overall spending sometimes gets out of line with the economy's productive capacity.

When people want more goods and services than are available, the economy undergoes inflation. This statement best represents this economic concept: -Overall spending sometimes gets out of line with the economy's productive capacity. -When markets don't achieve efficiency, government intervention can improve society's welfare. -Government policies can change spending. -Resources are scarce.

If a market is in equilibrium, there will be no remaining opportunities for individuals to make themselves better off.

Which of the following statements is TRUE? -A market is in equilibrium when the number of buyers is equal to the number of sellers. -If a market is in equilibrium, there will be no remaining opportunities for individuals to make themselves better off. -The concept of equilibrium requires that all individuals have an equal amount of income. -If a market is in equilibrium, the price in that market will not fluctuate by more than 5%.

people usually respond to incentives

Why are incentives important?

costs; benefits

You are analyzing a trade-off when you compare the _____and _____ of doing something. -direct costs; opportunity costs. -marginal benefits; total benefits. -direct costs; total costs. -costs; benefits

"How much" is a decision at the margin.

You decide whether to eat one more slice of pizza based on how hungry you feel. This statement best represents this economic concept: -The real cost of something is what you must give up to get it. -"How much" is a decision at the margin. -Resources are scarce. -There are gains from trade.

the enjoyment you would have received from the candy bar.

You have $1 to spend on a vending machine snack. A bag of chips will cost you $1 and a candy bar will also cost you $1. If you choose the bag of chips, the opportunity cost of buying the chips is: -$1 plus the enjoyment you would have received from the candy bar. -the enjoyment you would have received from the candy bar. -$2 minus the enjoyment you received from the bag of chips. -$1.

studies the decisions made by a collection of consumers

what is macroeconomics

what you must give up in order to get something

what is opportunity cost?