Econ 211 Unit 1 Ch1 review

Assume that a consumer purchases only two products and there is an increase in the consumer's income. The prices of the two products stay the same. The change in income will result in a

Shift outward in the budget line

If a production possibilities boundary is a concave curve and not a straight line, then:

Resources are not equally suited to producing alternative products

Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to another city to attend the concert of her favorite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50. The opportunity cost of Tammie's trip to the concert is:

$600

Which would not be considered as capital (or an economic resource) by an economist? A share of corporate stock issued by General Motors Answers: A crane used by a building contractor An automobile used by General Electric A razor used by a barber A share of corporate stock issued by General Motors

A share of corporate stock issued by General Motors

On a production possibilities curve, the single optimal or best combination of output for any society:

Depends upon the preferences of society

As a consequence of the condition of scarcity:

Individuals have to make choices from among alternatives

A reduction in the level of unemployment would have which effect with respect to the nation's production possibilities curve?

It would not shift the curve; it would be represented by moving from a point inside the curve toward the curve

When society overallocates resources to the production of a product it means that the:

Marginal benefit is less than the marginal cost

Which is not considered to be an economic resource?

Money Answers: Tools and machinery Labor Money Land (or natural resources)

The term scarcity in economics refers to the fact that:

No country can produce enough products to satisfy everybody's economic wants

Which is one of the four simplifying assumptions made in the chapter about the construction of the production possibilities model?

The economy is fully employed and is using least-cost methods of production

When an economist says that there is "too much of a good thing," the economist is suggesting that:

The marginal benefit of the thing is less than the marginal cost

Which question is an example of a microeconomic question? Will the merger of two airlines likely lead to higher airline ticket prices? Answers: What factors are contributing to the rise of unemployment in the economy? Will the merger of two airlines likely lead to higher airline ticket prices? Will the inflation rate remain relatively stable this year? What should the Federal government do to reduce the trade deficit with Japan?

Will the merger of two airlines likely lead to higher airline ticket prices?