Micro Practice
d. An increase in investment will lead to a higher rate of economic growth.
Which of the following is a positive economic statement? a. Economics is twice as interesting to study as philosophy. b. The United States spends too much on anti-terrorism efforts. c. The federal minimum wage should be raised to $6.50 per hour. d. An increase in investment will lead to a higher rate of economic growth.
b. $20 per hour.
An airline ticket from Seattle to Miami costs $760. A bus ticket costs $360. Traveling by plane will take 6 hours, compared with 26 hours by bus. Other things constant, the minimum value of one's time that would induce a rational individual to fly rather than drive would be Answers: a. $38 per hour. b. $20 per hour. c. $44 per hour. d. $18 per hour.
c. both parties receive something they value more than what they gave up.
In an informed and voluntary exchange, a. neither party can gain more than the other. b. one trader can gain only at the expense of the other. c. both parties receive something they value more than what they gave up. d. both parties place an less value on what they received and what they gave up.
b. unintended consequences of a change that are not immediately identifiable but are felt only with time.
In economics, secondary effects refer to the a. impact of the scarcity of resources on the scarcity of the goods that are produced with those resources. b. unintended consequences of a change that are not immediately identifiable but are felt only with time. c. best alternative that must be forgone as the result of a choice. d. immediate and visible intended consequences of a change.
d. bowed outward.
Increasing opportunity costs of producing goods imply that the production possibilities curve will be a. upward sloping. b. bowed inward. c. downward sloping.d. bowed outward.
a. making a rational choice. Answers: Correcta.
Jim enjoys the feeling of wind in his hair enough to ride his motorcycle without a helmet, even though he fully realizes the potential for injury it creates by not wearing one in the unlikely event he is in an accident. To an economist, Jim is a. making a rational choice. b. making an irrational choice. c. not responding to the incentives he faces. d. not fully considering the personal costs and benefits of his decision.
c. 20 toasters.
Refer to Figure 2-9. If the economy moves from point A to point D, the opportunity cost is Answers: a. 30 toasters. b. 30 toothbrushes. c. 20 toasters. d. 10 toasters.
b. what is true for the individual will also be true for the group.
The fallacy of composition is the fallacious view that a. it is possible for the whole to be greater than the sum of the individual parts. b. what is true for the individual will also be true for the group. c. association does not necessarily indicate causation. d. economic activity will benefit everyone.