Econ ~ Ch. 1

There are limited resources to satisfy all of society's wants. ....(1) Comparing the benefits and costs of engaging in an activity....(2)

(1)Scarcity (2)trade-off

The seaport town of New Monopoly has become extremely popular with shipping companies due to its superior location. The port has become so congested that ships must wait hours every day just to dock. This is an example of ....(1) The mayor of New monopoly realizes that the congestion at the port costs the shipping companies and his town money. Which decision would NOT move him towards a command economy? .....(2)

(1) market failure (2) The mayor decides to let individual firms and consumers find a solution for the excessive wait time.

Suppose you are a freshmen in college and you have not declared a major. One reason you enrolled at your respective college was the school's vibrant social life. At the same time, you want to balance your academic life because you know that your grades will matter for graduate school or job applications. You decide to forgo partying for two hours to study for an upcoming economics exam. In your first semester's Principles of Economics class, you learn that the enjoyment you would have received from partying is an example of a(n)(1) While in class, you realize that there are more people in the classroom than there are seats. Across the hall, you notice a large, empty lecture hall and wonder why the university is not operating at (2) Your economics professor is attempting to recruit more students to major in economics. She presents data showing that economics majors develop skills valuable in private industry, government, and research. She also argues that they earn a relatively higher income than other majors. Your professor is presenting you with to major in economics.(3) You are assigned a final group project for your economics course. One member of your group is really good at finding resources for the project, one is really good at proofreading and editing, and you are really good at making a presentation. Based on this, you know that via [Answer] you can complete the project more efficiently than if you all did each part together. (4)

(1) opportunity cost (2) efficiency (3) incentive (4) specialization

Suppose that Georgiania was a thriving empire in its golden age. Business was booming and it was the center of international trade under the leadership of Emperor Raphael III. His empire's pride and joy was the trading of green and black tea, and he decreed that their entire economy should be built around it. However, in the mid 1800s, Georgiania experienced a severe economic downturn when the other nations of the world created an embargo on tea from Georgiania, which led to civil strife due to thousands of workers being laid off. A downward fluctuation in the economy like this is known as a ........(1) The correct term is a key component ......(2)

(1) recession (2) Macroeconomics

The day-to-day living conditions of modern Americans are very different from what they were in the 20th century. While doing research for an economics project, Charlie discovers that more households today, as compared to households 100 years ago, have electricity, air conditioning, and a car. Which of the following explains why modern Americans enjoy a higher standard of living than Americans 100 years ago? (1) n which field do researchers focus on investigating the phenomena described?(2)

(1)There has been economic growth in our society. (2) Economics

Which statement describes the equity‑efficiency trade‑off?

Actions intended to make economic outcomes fairer can cause efficiency to decrease.

Which demonstrates a scenario with no opportunity cost?

All of these scenarios have an opportunity cost.

Thom, Jewel, Les, and Danny are trying to form a band. They each have some basic skills on most instruments, so their current plan is for each of them to rotate among vocals, guitar, bass, and drums. After a year of practice and rehearsals the band still sounds awful. Thom cannot keep a steady beat when on bass or drums, Les sounds terrible on everything except the bass, nobody except Jewel can remember all the chords on guitar, and even Danny's own mother thinks his singing sounds like a dying cow. At their current rate, they expect it will be several years before they are good enough to land their first paid performance. None of them have enough money saved up to last that long. They all know you are taking economics and ask your advice. What would you say to them?

Have each member specialize in the role that they are best in, to take advantage of benefits from specialization.

An Economy is

The system society uses to coordinate productive activities

The five-dollar Burger Joint gift card that your friend gave you for your birthday expires today. You can either use the gift card to buy yourself dinner at Burger Joint, or you can stay home and eat a delicious home-cooked meal. What is the opportunity cost of eating the home-cooked meal?

The value of the ingredients that go into the home-cooked meal, and the value of a five-dollar dinner at Burger Joint.

In a market-oriented economy, individuals' economic lives are said to be

interrelated with many other individuals and firms.

Economics is the

study of the consumption, production, and distribution of goods and services.

Daniel has decided to open his own bakery using locally sourced ingredients and supplies. He provides income and jobs to local suppliers. He also provides his community with a place to buy delicious baked goods. This is an example of

the invisible hand

Which is NOT an example of a resource?

firms

For each scenario, determine whether or not government intervention will improve society's well-being. Government intervention will improve society's well-being. (1) Government intervention will not improve society's well-being.(2)

(1) (a). a local energy company releases pollutants into the regional water reservoir (d). the coastal town of Willowby could prevent many shipwrecks by building a lighthouse. However, no individual resident is willing to pay for the lighthouse because they could never recoup the cost from ships benefiting from the lighthouse. (2) (b). conumers are beginning to demand more smartphones than traditional cell phones (c). a manufacturing company in Texas is switching from producing coats to t-shirts in anticipation of warmer weather

Determine which economic principle is illustrated by each scenario. 1. the owner of a snow cone trailer realizes that the demand for snow cones is low during the winter, and thus, closes shop until the temperature warms back up near summertime 2. the local river has so much pollution that three-eyed fish are forming. the government responds by regulating the amount of chemicals that can be dumped into the river 3. at a high end restaurant, the restaurant owner has one chef at a meat station, one chef at a vegetable station and one chef, who has an artistic eye, plate the food they are given. The result is increased speed, as more custoers get services during an evening 4. during the summer, a bumper crop of oranges in Florida causes a surplus in the supply of oranges nationwide. As a result, prices fall to copensate for the surplus and civilians enjoy the fruits of the farmers labor.

(1) market efficiency (2)government intervention (3)specialization (4)equilibrium

You and other college students are deciding whether to major in music or engineering. You learn that there is a shortage of engineers, making it easy for engineering graduates to find employment, while there is a glut of musicians for whom finding a job is difficult. As a result, you and many other college students decide to major in engineering. Which economic principle does this illustrate?

Markets tend to move towards equilibrium as individuals respond to incentives.

What is NOT an example of a behavior exhibited in a market economy?

The president of the European country of Semolina decrees that pasta must be consumed at all meals in an effort to help domestic pasta makers.

Which decision is least likely to be well explained by marginal analysis?

deciding which college to attend