ECON 201 Mod 2
For which of the following individuals would the opportunity cost of going to college be highest?
A famous, highly paid actor who wants to take time away from show business to finish college and earn a degree
Refer to Figure 2-3. Efficient production is represented by which point(s)?
C,D
Dale is a guitar teacher and Terrence is a tile layer. If Dale teaches Terrence's daughter to play the guitar in exchange for Terrence tiling Dale's kitchen floor,
both Dale and Terrence are made better off by trade.
Efficiency means that
society is getting the most it can from its scarce resources.
Consider Miray's decision to go to college. If she goes to college, she will spend $24,000 on tuition, $12,000 on room and board, and $1,900 on books. If she does not go to college, she will earn $16,000 working in a store and spend $8,000 on room and board. Miray's cost of going to college is
$45,900.
Refer to Table 3-2. Assume that England and France each has 40 labor hours available. If each country devotes 10 to production of bread and 30 to production of lemonade, then total production is
24 units of bread and 15 units of lemonade.
Table 3-4Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. Refer to Table 3-4.Assume that Zimbabwe and Portugal each has 180 machine minutes available. If each country divides its time equally between the production of toothbrushes and hairbrushes, then total production is
48 toothbrushes and 24 hairbrushes.
Refer to Table 2-2. What is the opportunity cost to Supertown of increasing the production of toys from 200 to 300?
500 glasses
Table 3-3Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. Refer to Table 3-3. Assume that Aruba and Iceland each have 80 labor hours available. If each country divides its time equally between the production of coolers and radios, then total production is
60 coolers and 18 radios.
Refer to Figure 2-5. Which of the following events would explain the shift of the production possibilities frontier from A to B?
A general technological advance
Which of the following statements best represents the principle represented by the adage, "There ain't no such thing as a free lunch"?
Benjamin must decide between going to Florida or Brazil for summer vacation.
Which of the following statements about comparative advantage is not true?
Comparative advantage is determined by which person or group of persons can produce a given quantity of a good using the fewest resources.
Refer to Figure 2-10. It is possible for this economy to produce 45 doghouses and 30 dishwashers.
False
Fossil fuels are considered to be nonrenewable energy sources. Which of the following statements is correct?
Fossil fuels are scarce resources.
The production possibilities frontier illustrates
The production possibilities frontier illustrates
Points inside the production possibilities frontier represent feasible levels of production.
True
Trade between countries
allows each country to consume at a point outside its production possibilities frontier.
Making rational decisions at the margin means that people
compare the marginal costs and marginal benefits of each decision.
When society gets the most it can from its scarce resources, then the outcome is called
efficient
In the markets for goods and services in the circular-flow diagram,
firms provide households with output.
A popular celebrity that is paid highly for her time should probably not mow her own lawn because
her opportunity cost of mowing her lawn is higher than the cost of paying someone to mow it for her.
Absolute advantage is found by comparing different producers'
input requirements per unit of output.
Candice is planning her activities for a hot summer day. She would like to go to the local swimming pool and see the latest blockbuster movie, but because she can only get tickets to the movie for the same time that the pool is open she can only choose one activity. This illustrates the basic principle that
people face tradeoffs.
The adage, "There ain't no such thing as a free lunch," means
people face tradeoffs.
Alana decides to spend 2 hours working overtime rather than going shopping with her friends. She earns $11 per hour for overtime work. Her opportunity cost of working is
the enjoyment she would have received had she gone shopping.
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 Joseph gets from purchasing a fourth pair of shoes is
the total benefit he gets from purchasing four pairs of shoes minus the total benefit he gets from purchasing three pairs of shoes.
Savion's aunt gave him $25 for his birthday with the condition that Savion buys himself something. In deciding how to spend the money, Savion narrows his options down to four choices: Option 1, Option 2, Option 3, and Option 4. Each option costs $25. Finally, he decides on Option 2. The opportunity cost of this decision is
the value to Savion of the option he would have chosen had Option 2 not been available.
Economics is the study of how society manages its
unlimited wants and limited resources.
The opportunity cost of an item is
what you give up to get that item
