econ hw 1
published in 1776, ___ was written by Adam Smith
"An inquiry into the nature and causes of the wealth of nations"
suppose your expenses for this tern are as follows: tuition: $5000, r&b: $3000, books: $500. Further, during the term, you can only work part time and earn $4000 instead of full time salary of $10000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you didn't go to college?
$11,500
a production possibilities frontier with a ____ shape indicates increasing opportunity costs as more and more of one good is produced
bowed outward
individuals who have never been the best at doing anything
can still have a comparative advantage in producing some product
specializing in the production of a good or service in which one has a comparative advantage enables a country to do which of the following?
consume a combination of goods that lies outside its own production possibilities frontier
T/F: to increase gas mileage, auto manufacturers make cars small and light. Large cars absorb more of the impact of an accident than small cars but yield lower gas mileage. These facts suggest that a positive relationship exists between safety and gas mileage.
false
comparative advantage means
the ability to produce a good or service at a lower opportunity cost than any other producer
without technological advancement, how can a nation achieve economic growth?
through an increase in supplies of factors of production
T/F: a decrease in the unemployment rate may be represented as a movement from a point inside the production possibilities frontier to a point on the frontier
true
Carmelita can perform either a combination of 35 manicures and 70 pedicures or a combination of 50 manicures and 45 pedicures. If she now performs 35 manicures and 70 pedicures, what is the opportunity cost of performing an additional 15 manicures
25 pedicures
___ behavioral assumption about humans was that people usually act in a rational, self-interested way
Adam Smith's
the recession of 2007-2009 would most likely be represented in a production possibilities frontier graph by
a point inside the frontier
if property rights are not well enforced, all of the following are likely to occur except
a significant number of people will be willing to risk their funds by investing them in local businesses
which of the following is a factor of production?
an acre of forested land
an outward shift of a nation's production possibilities frontier can occur due to
an increase in the labor force
___ a nation's production possibilities frontier represents economic growth
an outward shift of
the opportunity cost of taking an online history class is
equal to the highest value of an alternative use of time and money spent on the class
as job opportunities for women and the wages those jobs pay have increased, the opportunity cost of doing housework has ___, so many families have chosen to hire specialists in household chores, such as cleaning services and lawn care services, because the cost of these specialists is ___ than the cost of the wife or husband performing those chores
increased; lower
Adam Smith's ____ refers to the process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole
invisible hand
For each bottle of wine that Italy produces, it gives up the opportunity to make 10 pounds of cheese. France can produce 1 bottle of wine for every 25 pounds of cheese it produces. Which of the following is true about the comparative advantage between the two countries?
italy has the comparative advantage in wine
the slope of a production possibilities frontier measures the ___ of producing one more unit of a good
opportunity cost
if the production possibilities frontier is linear, then
opportunity costs are constant as more of one good is produced
a critical function of the government in facilitating the operation of a market economy is
setting up and enforcing private property rights
economic growth is represented on a production possibilities frontier model by the production possibility frontier
shifting outward
if the best lawyer in town is also the best at operating a word processor, then according to economic reasoning, this person should
specialize in being a lawyer because its opportunity cost is lower