Econ 1113

If Japan must give up the production of 75 computers to produce 25 additional cellular telephones, the opportunity cost of producing 4 cellular telephones is _____ computers. a. 12 b. 71 c. 4 d. 79

12

(Table: Production Possibilities Schedule I) Look at the table Production Possibilities Schedule I. If the economy produces two units of consumer goods per period, it also can produce at most _____ units of capital goods per period. a. 30 b. 18 c. 24 d. 28

24

(Table: Supply of Lemonade) Look at the table Supply of Lemonade. If the price of lemonade is $1 per cup, the total quantity of lemonade supplied will be: a. 25 cups. b. 50 cups. c. 80cups. d. 90 cups.

90

An announcement that smoking will harm your ability to think clearly will most likely result in: a. a decrease in the demand for cigarettes. b. no change in smoking habits. c. anincreaseinthepriceofcigarettes. d. an increase in the quantity of cigarettes demanded.

a decrease in the demand for cigarettes

The demand curve for videos has shifted to the right. What could have caused it? a. a fall in the price of videos b. an increase in the price of videos c. anincreaseinthesupplyofvideos d. an increase in the incomes of buyers

an increase in the income of buyers

An economy is said to have a comparative advantage in the production of a good if it can produce that good: a. outside its production possibilities curve. b. with a higher opportunity cost than another economy. c. ataloweropportunitycostthananothereconomy. d. with more resources than another economy.

at a lower opportunity cost than another economy

A tariff imposed on Japanese imports into the United States tends to _____ U.S. producers and _____ Japanese producers. a. benefit; penalize b. benefit; benefit c. penalize;penalize d. penalize; benefit.

benefits penalize

When an economy moves from autarky to free international trade, in the export sector: a. consumer surplus rises, producer surplus falls, and the economy as a whole gains. b. consumer surplus falls, producer surplus rises, and the economy as a whole gains. c. consumerandproducersurplusbothriseandtheeconomyasawholegains. d. the decrease in either consumer surplus or producer surplus is sufficiently large to cause net losses for the economy.

consumer surplus falls, producer surplus rise, and the economy as a whole gains

The importance of an economic model is that it allows us to: a. avoid opportunity costs. b. build a complex and accurate model of the economy. c. buildanaccuratemathematicalmodeloftheeconomy. d. focus on the effects of only one change at a time.

d focus on the effects on only one change at a time

18. If the opportunity cost of manufacturing automobiles is lower in the United States than in Britain and the opportunity cost of manufacturing airplanes is higher in the United States than in Britain, then the United States will: a. import both airplanes and automobiles from Britain. b. export both airplanes and automobiles to Britain. c. importairplanesfromBritainandexportautomobilestoBritain. d. export airplanes to Britain and import automobiles from Britain.

export airplanes to britain and import automobiles from britain

An economy is said to have a comparative advantage in the production of one good if it: a. can produce more of all goods than another economy. b. has the lowest opportunity cost of producing a particular good. c. hasthehighestopportunitycostofproducingaparticulargood. d. can produce less of all goods than another economy.

has the lowest opportunity cost of producing a particular good

The production possibility frontier illustrates that: a. an economy's productive capacity increases one-for-one with its population. b. economic production possibilities have no limit. c. theeconomywillautomaticallyendupatfullemployment. d. if all resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced.

if all resources of an economy are being used efficiently more of one good can be produced only if less of another good is produced

A binding price floor is a _____ set _____ the equilibrium price. a. minimum price; at b. maximum price; below c. minimumprice;above d. maximum price; above

minimum price above

As long as people have different _____, everyone has a comparative advantage in something. a. benefits b. utility c. opportunitycosts d. direct costs

opportunity cost

The typical supply curve illustrates that: a. other things equal, the quantity supplied for a good is inversely related to the price of a good. b. other things equal, the quantity supplied for a good is positively related to the price of a good. c. priceandquantitysuppliedareunrelated. d. other things equal, the supply of the good creates its own demand for the good.

other things equal, the quantity supplied for a good is positively related to the price of a good

If labor is abundant in South Africa but capital is scarce, when South Africa opens to trade, the price of labor will _____ and the price of capital will _____. a. rise; rise b. fall; rise c. rise;fall d. fall; fall

rise fall

An economy moves from autarky to free international trade. In the import sector consumer surplus _____, producer surplus _____, and the economy as a whole _____. a. rises; falls; gains b. falls; rises; gains c. rises;falls;loses d. rises; rises; gains

rises, falls, gains

If steak and potatoes are complements, when the price of steak goes up, the demand curve for potatoes: a. shifts to the right and then moves back. b. stays the same. c. shiftstotheleft. d. shifts to the right.

shifts to the right and then moves back

Bangladesh exports shirts, the making of which is labor-intensive, to the United States. The likely source of Bangladesh's comparative advantage in shirts is: a. that in comparison with the United States, Bangladesh is a labor-abundant country. b. the higher labor productivity in Bangladesh. c. ahotterclimate,whichmakesitpossibletoproduceshirtsoutdoors,eliminatingtheneedfor factory buildings and hence reducing costs. d. superior production technology.

that in comparison with the us, bang is a labor abundant country

Economists generally believe that a country should specialize in the production of a good or service if: a. the production possibility frontier is further from the origin than that of any other country. b. the production possibility frontier is closer to the origin than that of any other country. c. thecountrycanproducetheproductwhileforgoingfeweralternativeproductsthananyother country. d. the country can produce the product using more resources than any other country.

the country can produce the product while for going fewer alternative products than any other country

Which of the following is a normative statement? a. A higher minimum wage is expected to increase the price of a fast-food cheeseburger. b. The minimum wage has not kept pace with inflation. c. Theminimumwageisanimportanttoolinfightingpovertyandshouldbeincreased. d. The minimum wage can cause higher unemployment for teens and unskilled workers.

the minimum wage can cause higher unemployment for teens and unskilled workers

A shift of the demand curve for thin-crust pizza would NOT be caused by a change in: a. buyers' incomes. b. the price of thick-crust pizza. c. thepopularityofthin-crustpizza. d. the price of thin-crust pizza.

the price of thin crust pizza

If an economy has to sacrifice increasing amounts of good X for each additional unit of good Y produced, then its production possibility frontier is: a. a vertical line. b. bowed in. c. astraightline. d. bowed out.

bowed out from the origin

Because of trade, a country may: a. avoid opportunity costs. b. consume inside its production possibility frontier. c. finditsproductionpossibilityfrontiershiftingoutward. d. consume outside its production possibility frontier.

consume inside its production possibility frontier

Consider the supply curve for cotton shirts. An increase in the price of cotton will: a. increase the quantity supplied of cotton shirts. b. decrease the supply of cotton shirts. c. decreasethedemandforcottonshirts. d. increase the supply of cotton shirts.

decrease the supply of cotton shirts

Which of the following is a positive statement? a. The rate of unemployment is 4%. b. Baseball players should not be paid higher salaries than the president of the United States. c. Everyoneinthecountryshouldbecoveredbynationalhealthinsurance. d. A high rate of economic growth is the most important economic goal for the country.

the rate of unemployment is 4%