Homework 1 Macro (Chpt 1-4)

True

International trade may make some individuals in a nation better off, while other individuals are made worse off.

False

Price cannot fall so low that some sellers choose to supply a quantity of zero.

Alice produces more lemonade and Betty produces more pizzas.

Refer to Figure 3-4. If point A represents Alice's current production and point B represents Betty's current production, under what circumstances can both Alice and Betty benefit from specialization and trade?

Point A to Point B

Refer to Figure 4-10. Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time?

1 radio for 4 coolers

Refer to Table 3-11. At which of the following prices would both Jamaica and Norway gain from trade with each other?

5 toothbrushes and 11 hairbrushes

Refer to Table 3-4. Which of the following combinations of toothbrushes and hairbrushes could Zimbabwe not produce in 120 minutes?

500

Refer to Table 3-8. If the production possibilities frontier is bowed outward, then which of the following could represent the number of coats produced when 12 blankets are produced?

decreases by 7 units

Refer to Table 4-2 . If these are the only four buyers in the market, then when the price increases from $1.00 to $1.50, the market quantity demanded

Benefit both Celia and Ryan

Ryan produces hair clips and earrings. Celia also produces hair clips and earrings, but Ryan is better at producing both goods. In this case, trade could

Students would purchase more than 750 cups per day.

Suppose that when the price of a 16 oz. to-go cup of gourmet coffee is $4.25, students purchase 750 cups per day. If the price decreases to $3.75 per cup, which of the following is the most likely outcome?

sell the ticket because the marginal benefit exceeds the marginal cost.

Suppose the cost of flying a 200-seat plane for an airline is $100,000 and there are 10 empty seats on a flight. If the marginal cost of flying a passenger is $200 and a standby passenger is willing to pay $300, the airline should

True

The cost of an action is measured in terms of foregone opportunities.

Efficiency and Equality

A typical society strives to get the most it can from its scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of the society in a fair manner. However, redistributing income from rich to poor reduces the reward for working hard. Therefore, society faces a tradeoff between

coordinate system

Eva wants to create a graph containing the prices of concert tickets and the corresponding quantities of concert tickets demanded by customers. She should use a

Scarcity

Fundamentally, economics deals with

False

Goods produced abroad and sold domestically are called exports and goods produced domestically and sold abroad are called imports.

the supply curve shifts

If something happens to alter the quantity supplied at any given price, then

the quantity demanded is equal to the quantity supplied and the price remains unchanged.

If the price of a good is equal to the equilibrium price,

self-interest and price

In a market economy, economic activity is guided by

Money

In the circular-flow diagram, which of the following is not a factor of production?

opportunity cost

What must be given up to obtain an item is called

False

When a production possibilities frontier is bowed outward, the opportunity cost of the first good in terms of the second good increases as more of the second good is produced.

people work less and produce fewer goods and services.

When the government redistributes income from the wealthy to the poor,

Australia has an absolute advantage in the production of both food and electronics.

Which of the following statements about absolute advantage is true?

Yes

You have spent $1,000 building a hot-dog stand based on estimates of sales of $2,000. The hot-dog stand is nearly completed, but now you estimate total sales to be only $800. You can complete the hot-dog stand for another $300. Should you complete the hot-dog stand? (Assume that the hot dogs cost you nothing.)