Chapter 1 Assignment- Limits, Alternatives, and Choices

Refer to the above graph. The total opportunity cost of nine drill presses is:

3 Units of Bread

Use the table to complete the following question(s).The following economy produces two products. Refer to the above table. The total opportunity cost of the three units of tanks is:

350 Units of Auto

Refer to the above graph. The marginal opportunity cost of the fourth unit of bread is:

4 Drill Presses

If a consumer has an income of $200, the price of X is $5, and the price of Y is $10, the maximum quantity of X the consumer is able to purchase is:

40

Refer to the above table. The total opportunity cost of the three units of steel is:

45 Units of Wheat

Suppose a consumer has an income of $16, the price of A is $2, and the price of B is $1. Which combination is on the consumer's budget line?

5A and 6B

Use the table below to complete the following questions.The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Refer to the table above. What is the opportunity cost of producing the third unit of capital goods?

6 Units of Consumer Goods

The production possibilities curve represents which of the following?

maximum combinations of goods attainable with fixed resources

The primary focus of the study of economics is with:

making the most efficient use of scarce productive resources.

The overallocation of resources by society to the production of a product means that the:

marginal cost is greater than the marginal benefit.

The production possibilities curve bows outward from the origin because:

opportunity costs increase as the production of a good increases.

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

resources are not equally suited to producing alternative products.

The purpose of the ceteris paribus assumption used in economic analysis is to:

restrict the analysis to the effect of a single economic factor.

Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to:

shift outward or to the right.

The price ratio of the two products is the:

slope of the budget line

Microeconomics focuses on:

the individual units that make up the whole of the economy.

The process of developing hypotheses, testing them against facts, and using the results to construct theories is called:

the scientific method.

Macroeconomics focuses on:

total output and the general level of prices in the economy.

An "aggregate:"

treats a collection of specific units as one unit.

The utility of a specific product:

varies from person to person using the product.

Use the table below to complete the following questions.The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Refer to the table above. What is the opportunity cost of producing the first two units of capital goods?

9 Units of Consumer Goods

The alternative combinations of two goods which a consumer can purchase with a given money income is:

A Budget Line

Decreases in the price of a product causes the consumer's:

Budget line to shift outward from the origin

Refer to the above graph. Assume that before the Persian Gulf War, Iraq's production possibilities were represented by AB. Which line on the above graph would represent the change in Iraq's production possibilities after the war?

AB to EF

Which expression is another way of saying "marginal cost"?

Additional Cost

Which is a factor of production?

Capital

Refer to the above graphs. Pizza and beer are the only two goods Jon consumes. The price of beer is $2.00 per pitcher and pizza is $1.25 per slice. If Jon has only $10 to spend for the evening, which graph represents the set of possible combinations of beer and pizza he can consume?

Graph A

When a state government chooses to build more roads, the required resources are no longer available for spending on public education. This dilemma illustrates the concept of:

Opportunity Costs

Microeconomics focuses on:

The individual units that make up the whole of the economy

Economic models do not reflect the full complexity of reality and instead are based on:

Purposeful Simplifications

The satisfaction or pleasure one gets from consuming a good or service is:

Utility

The statement that "the unemployment rate will increase as the economy moves into a recession" is an example of:

a generalization

From an economic perspective, when a student decides to attend another year of college, the student has concluded that the marginal:

benefits of attending college are greater than the marginal costs.

Refer to the above graph. The shift of the budget line from AB to CD is consistent with:

an increase in money income.

Money is not considered to be an economic resource because:

as such it is not productive.

A point inside the production possibilities curve is:

attainable, but the economy is inefficient.

When an economy is at full employment and full production, more of any one product:

can be produced only if there is less production of some other products.

Economics is the study of:

how people, institutions, and society make choices under conditions of scarcity.