mid term 2

Kasey has 8 hours to work each day. It takes him 2 hours to carve a wooden toy and 1 hour for him to build a guitar. What is his opportunity cost for 1 guitar. 1 hour 1/2 a wooden toys 2 hours 2 wooden toys

1/2 a wooden toys

Hayley has 40 hours to work each week. It takes her 4 hours to mow one lawn and 5 hours for her to trim a tree. What is the opportunity cost for 1 tree? 5/4 of a lawn 5 hours 4 hours 4/5 of a lawn

5/4 of a lawn

n 30 minutes, Adway can either make minestrone soup or he can clean the kitchen. In 15 minutes, Brianna can make minestrone soup; however, it takes Brianna an hour to clean the kitchen.In each of the cases below, who has the absolute advantage at each task, and who has the comparative advantage? (Select all which are true) Brianna has a comparative advantage in cleaning the kitchen. Adway has an absolute advantage in making soup Adway has a comparative advantage in cleaning the kitchen. Brianna has a comparative advantage in making soup Brianna has an absolute advantage in making soup Adway has an absolute advantage in cleaning the kitchen Adway has a comparative advantage in making soup Brianna has an absolute advantage in cleaning the ktichen

Adway has an absolute advantage in cleaning the kitchen, Adway has a comparative advantage in cleaning the kitchen, Brianna has an absolute advantage in making soup, Brianna has a comparative advantage in making soup

In one hour, Emily can bake 20 cookies or lay the drywall for two rooms. In one hour, Sean can bake 99 cookies or lay the drywall for three rooms.In each of the cases below, who has the absolute advantage at each task, and who has the comparative advantage? (Select all which are true) Emily has an absolute advantage in cookies. Emily has an absolute advantage in drywall. Emily has an comparative advantage in cookies. Emily has an comparative advantage in drywall. Sean has an absolute advantage in cookies. Sean has an absolute advantage in drywall. Sean has an comparative advantage in cookies. Sean has an comparative advantage in drywall.

Emily has an comparative advantage in drywall, Sean has an absolute advantage in cookies, Sean has an absolute advantage in drywall, Sean has an comparative advantage in cookies

Which of the following is usually true about government-provided goods? People do not have to pay a fee to enjoy these goods. These goods have a zero opportunity cost. These goods are not scarce. The invisible hand is at work to ensure these goods are provided in the market

People do not have to pay a fee to enjoy these goods

England and Portugal can make either wine or textiles. For England, it takes them 100 hours to make 4 barrels of wine and 20 hours to produce 10 pieces of textiles. Portugal takes 100 hours to make 5 barrels of wine and 15 hours to produce 30 pieces of textiles. Which of the following is true? Portugal has an absolute advantage in wine. Portugal has an absolute advantage in textiles. England has an absolute advantage in wine. England has an absolute advantage in textiles.

Portugal has an absolute advantage in wine, Portugal has an absolute advantage in textiles

An optimal tax on pollution would result in which of the following? Producers will maximize production. The value to consumers at market equilibrium will exceed the social cost of production. Producers will choose not to produce any pollution. Producers will internalize the cost of the pollution.

Producers will internalize the cost of the pollution

Sam is a woodworker. In 15 minutes, he can make 1 chair. On the other hand, in 45 minutes he can make 1 table. Stephanie is also a woodworker but an apprentice. She can make a chair, but in 30 minutes and a table in 2 hours. Which of the following is true? Stephanie has an absolute advantage in making chairs. Sam has an absolute advantage in making chairs. Sam has an absolute advantage in making tables. Stephanie has an absolute advantage in making tables.

Sam has an absolute advantage in making chairs, Sam has an absolute advantage in making tables

If Shawn can produce donuts at a lower opportunity cost than Sue, then Shawn should not produce donuts. Shawn has a comparative advantage in the production of donuts. Sue has a comparative advantage in the production of donuts. Shawn is capable of producing more donuts than Sue in a given amount of time.

Shawn has a comparative advantage in the production of donuts

Which of the following statements is not correct? Government policies may improve the market's allocation of resources when negative externalities are present. Government policies may improve the market's allocation of resources when positive externalities are present. A positive externality is an example of a market failure. Without government intervention, the market will tend to undersupply products that produce negative externalities.

Without government intervention, the market will tend to undersupply products that produce negative externalities

Which of the following goods is rival in consumption and excludable? a DVD a movie shown on cable television. an outdoor movie shown at a public park a movie in an empty theater

a DVD

A positive externality arises when a person engages in an activity that has having a well-funded animal control department. encouraging people to adopt cats. subsidizing local animal shelters. making it illegal to "disturb the peace."

a beneficial effect on a bystander who does not pay the person who causes the effect

Which of the following goods is rival in consumption and excludable? a parade national defense a box of sparklers a fireworks display

a box of sparklers

A city street is always a common resource, whether or not it is congested. a common resource when it is congested, but it is a public good when it is not congested. always a public good, whether or not it is congested. a public good when it is congested, but it is a common resource when it is not congested.

a common resource when it is congested, but it is a public good when it is not congested

Indifference curves illustrate a consumer's preferences. a firm's profits. a consumer's budget. the prices of two goods.

a consumer's preferences

An externality is an example of a corrective tax. a tradable pollution permit. a market failure. Both a and b are correct.

a market failure

When the social cost curve is above a product's supply curve a negative externality exists in the market. the government has intervened in the market. the distribution of resources is unfair. a positive externality exists in the market.

a negative externality exists in the market

A budget constraint shows the maximum utility that a consumer can achieve for a given level of income. a series of bundles that cost the consumer the same amount of money. a series of bundles that give the consumer the same level of utility. All of the above are correct.

a series of bundles that cost the consumer the same amount of money

Which of the following would be considered a private good? a public beach a ferry boat ride to an island with open seating fish in the ocean a swimming suit

a swimming suit

Trade between countries allows each country to consume at a point outside its production possibilities frontier. can best be understood by examining the countries' absolute advantages. must benefit both countries equally; otherwise, trade is not mutually beneficial. limits a country's ability to produce goods and services on its own.

allows each country to consume at a point outside its production possibilities frontier

A negative externality arises when a person engages in an activity that has an adverse effect on a bystander who is not compensated by the person who causes the effect. a beneficial effect on a bystander who pays the person who causes the effect. a beneficial effect on a bystander who does not pay the person who causes the effect. an adverse effect on a bystander who is compensated by the person who causes the effect.

an adverse effect on a bystander who is not compensated by the person who causes the effect

The impact of one person's actions on the well-being of a bystander is called an economic dilemma. deadweight loss. a multi-party problem. an externality.

an externality

Resources tend to be allocated inefficiently when goods are available only at very high prices. are rival in consumption and excludable. are available free of charge. are private goods.

are available free of charge

Governments can improve market outcomes for common resources but not public goods. public goods but not common resources. neither public goods nor common resources. both public goods and common resources.

both public goods and common resources

Bob owns 5 acres of land. Bob sells the land to a real estate developer who builds a subdivision with 10 houses. The land is an example of a good that is excludable, but not rival in consumption. rival in consumption, but not excludable. both rival in consumption and excludable. neither rival in consumption nor excludable.

both rival in consumption and excludable

Which of the following would not be considered a private good? a pair of scissors an SUV cable TV service a pair of shoes

cable TV service

Which of the following does not represent a tradeoff facing a consumer? choosing to purchase more of all goods choosing to spend more now and consume less in the future choosing to purchase less of one good in order to purchase more of another good choosing to spend more time on leisure and less time on work

choosing to purchase more of all goods

Goods that are not rival in consumption include both common resources and public goods. club goods and public goods. private goods and club goods. private goods and common resources.

club goods and public goods

The Great Lakes are club goods. common resources. public goods. private goods.

common resources

Goods that are rival in consumption include both private goods and club goods. common resources and private goods. public goods and common resources. club goods and public goods.

common resources and private goods

The theory of consumer choice provides the foundation for understanding the profitability of a firm. supply of a firm's product. structure of a firm. demand for a firm's product.

demand for a firm's product

Neither public goods nor common resources are excludable, but only public goods are not rival in consumption. rival in consumption, but only public goods are not excludable. excludable, but only common resources are not rival in consumption. rival in consumption, but only common resources are not excludable.

excludable, but only public goods are not rival in consumption

Market failure can be caused by externalities. scarcity. too much competition. low consumer demand.

externalities

Which of the following goods is excludable but not rival in consumption? a congested toll road a tornado siren fire protection in a small town whales in the ocean

fire protection in a small town

Goods that are not excludable are usually higher priced than rival goods. in short supply. higher priced than excludable goods. free of charge.

free of charge

By definition, exports are goods in which a country has an absolute advantage. limits placed on the quantity of goods brought into a country. goods produced domestically and sold abroad. people who work in foreign countries.

goods produced domestically and sold abroad

If an externality is present in a market, economic efficiency may be enhanced by government intervention. weakening property rights. increased competition. better informed market participants.

government intervention

Negative externalities lead markets to produce greater than efficient output levels and positive externalities lead markets to produce efficient output levels. smaller than efficient output levels and positive externalities lead markets to produce greater than efficient output levels. greater than efficient output levels and positive externalities lead markets to produce smaller than efficient output levels. efficient output levels and positive externalities lead markets to produce greater than efficient output levels.

greater than efficient output levels and positive externalities lead markets to produce smaller than efficient output levels

Externalities tend to cause markets to be overwhelmed. unnecessary. unequal. inefficient.

inefficient

A positive externality will cause a market to produce the socially optimal equilibrium amount. more than is socially desirable. more than the same market would produce in the presence of a negative externality. less than is socially desirable.

less than is socially desirable

One way to eliminate the Tragedy of the Commons is to increase access to the commons. limit access to the commons. decrease taxes. increase law enforcement in public areas.

limit access to the commons

Dog owners do not bear the full cost of the noise their barking dogs create and often take too few precautions to prevent their dogs from barking. Local governments address this problem by an adverse effect on a bystander who is compensated by the person who causes the effect. a beneficial effect on a bystander who does not pay the person who causes the effect. a beneficial effect on a bystander who pays the person who causes the effect. an adverse effect on a bystander who is not compensated by the person who causes the effect.

making it illegal to "disturb the peace."

An externality is the impact of society's decisions on the poorest person in the society. society's decisions on the well-being of society. one person's actions on the well-being of a bystander. a person's actions on that person's well-being.

one person's actions on the well-being of a bystander

When a good is rival in consumption, an unlimited number of people can use the good at the same time. everyone will be excluded from obtaining the good. people can be prevented from using the good. one person's use of the good diminishes another person's ability to use it.

one person's use of the good diminishes another person's ability to use it

When a good is excludable, one person's use of the good diminishes another person's ability to use it. everyone will be excluded from using the good. no more than one person can use the good at the same time. people can be prevented from using the good.

people can be prevented from using the good

In the Tragedy of the Commons parable, if the medieval townspeople had foreseen the tragedy, then they could have dealt with the problem in much the same way that modern society deals with pollution. fire protection. national defense. poverty.

pollution

For private goods allocated in markets, prices guide the decisions of buyers and sellers and these decisions lead to an inefficient allocation of resources. the government guides the decisions of buyers and sellers and these decisions lead to an efficient allocation of resources. prices guide the decisions of buyers and sellers and these decisions lead to an efficient allocation of resources. the government guides the decisions of buyers and sellers and these decisions lead to an inefficient allocation of resources.

prices guide the decisions of buyers and sellers and these decisions lead to an efficient allocation of resources

Goods that are excludable include both club goods and public goods. public goods and common resources. common resources and private goods. private goods and club goods.

private goods and club goods

A streetlight is a private good. public good. common resource. club good.

public good

An externality causes demand to exceed supply. strengthens the role of the "invisible hand" in the marketplace. results in an equilibrium that does not maximize the total benefits to society. affects buyers but not sellers.

results in an equilibrium that does not maximize the total benefits to society

As long as a consumer remains on the same indifference curve, she is indifferent to all points that lie on any other indifference curve. her preferences will not affect the marginal rate of substitution. she is unable to decide which bundle of goods to choose. she is indifferent among the points on that curve.

she is indifferent among the points on that curve

Internalizing a positive externality will cause the demand curve to shift to the right. shift to the left. remain unchanged. become more elastic.

shift to the right

One of the least regulated common resources today is forest preserves. the ocean. state parks. the Great Lakes.

the ocean

The theory of consumer choice examines the determination of prices in competitive markets. the tradeoffs inherent in decisions made by consumers. the determination of output in competitive markets. how consumers select inputs into manufacturing production processes.

the tradeoffs inherent in decisions made by consumers

An externality is the costs that parties incur in the process of agreeing and following through on a bargain. the uncompensated impact of one person's actions on the well-being of a bystander. a market equilibrium tax. the proposition that private parties can bargain without cost over the allocation of resources.

the uncompensated impact of one person's actions on the well-being of a bystander

Which of the following is a common resource? fish raised on a farm a tornado siren timber in a public forest a traffic light

timber in a public forest

Which of the following is an example of an externality? cigarette smoke that permeates an entire restaurant a flu shot that prevents a student from transmitting the virus to her roommate a beautiful flower garden outside of the local post office All of the above are correct.

All of the above are correct

Canada and the United States both produce lumber and corn. In terms of labor hours, it takes Canadians 10 hours to provide 1 ton of lumber. It then takes 120 hours to produce 1 ton of corn . For the United States, it takes them 12 hours to produce 1 ton of lumber but 200 hours to produce 2 tons of corn . Which of the following is true? Canada has an absolute advantage in making corn. United States has an absolute advantage in lumber. Canada has an absolute advantage in lumber. United States has an absolute advantage in making corn.

Canada has an absolute advantage in lumber, United States has an absolute advantage in making corn

Which of the following goods is nonrival in consumption and excludable? White Mountain ski resort on a sunny, mild day a crowded public beach on a sunny, warm day Grand Canyon National Park on a rainy, cool day Disney World on a rainy, cool day

Disney World on a rainy, cool day

If Iowa's opportunity cost of corn is lower than Oklahoma's opportunity cost of corn, then Oklahoma should produce just enough corn to satisfy its own residents' demands. Iowa should import corn from Oklahoma. Iowa has a comparative advantage in the production of corn. Iowa has an absolute advantage in the production of corn.

Iowa has a comparative advantage in the production of corn

Kylie can build two glass sculptures per day or she can design two full-page newspaper advertisements per day. Seymour can build one glass sculpture per day or design four full-page newspaper ads per day.In each of the cases below, who has the absolute advantage at each task, and who has the comparative advantage? (Select all that are true) Seymour has a comparative advantage in glass sculpting. Seymour has an absolute advantage in designing newspapers. Kylie has an absolute advantage in glass sculpting. Kylie has a comparative advantage in glass sculpting. Seymour has an absolute advantage in glass sculpting. Kylie has an absolute advantage in designing newspapers. Seymour has a comparative advantage in designing newspapers. Kylie has a comparative advantage in designing newspapers.

Kylie has an absolute advantage in glass sculpting, Seymour has a comparative advantage in designing newspapers, Kylie has a comparative advantage in glass sculpting, Seymour has an absolute advantage in designing newspapers

In what sense do externalities cause the "invisible hand" of the marketplace to fail? Externalities result in prices that are too high for many consumers to pay. Externalities lead to government intervention in markets, which exacerbates the problems associated with externalities. Markets produce too little of a good when positive or negative externalities are present. Markets fail to produce the maximum total benefit to society when positive or negative externalities are present.

Markets fail to produce the maximum total benefit to society when positive or negative externalities are present

Which of the following goods is both excludable and rival in consumption? a wristwatch fire protection in a small town fish in the ocean efforts to fight poverty

a wristwatch

The Tragedy of the Commons occurs because government does not efficiently allocate society's scarce resources. people consider the value of resources in the future more than in the present. markets do not account for the presence of property rights. common resources are rival in consumption.

common resources are rival in consumption

The difference between social cost and private cost is a measure of the cost reduction when the negative externality is eliminated. cost of an externality. loss in profit to the seller as the result of a negative externality. cost incurred by the government when it intervenes in the market.

cost of an externality

The supply curve for a product reflects the cost to sellers of producing the product. willingness to pay of the marginal buyer. seller's profit from producing the product. quantity buyers will ultimately purchase of the product.

cost to sellers of producing the product

By definition, imports are goods produced abroad and sold domestically. people who work in foreign countries. goods in which a country has an absolute advantage. limits placed on the quantity of goods leaving a country.

goods produced abroad and sold domestically

When a consumer spends less time enjoying leisure and more time working, she has lower income and therefore cannot afford more consumption. higher income and therefore can afford more consumption. higher income and therefore cannot afford more consumption. lower income and therefore can afford more consumption.

higher income and therefore can afford more consumption

Josiah installed a metal sculpture in his front yard. A positive externality arises if the sculpture ​creates a safety hazard for neighborhood children. ​increases the value of Josiah's home. ​is visually unappealing to Josiah's neighbors. ​increases the value of other properties in the neighborhood.

increases the value of other properties in the neighborhood

Absolute advantage is found by comparing different producers' profits per unit of output inputs per unit of output. payments to land, labor, and capital. opportunity costs.

inputs per unit of output

A positive externality is a benefit to someone other than the producer and consumer of the good. is a benefit to the producer of the good. results in an optimal level of output. is a benefit to the consumer of the good.

is a benefit to someone other than the producer and consumer of the good

All remedies for externalities share the goal of decreasing the allocation of resources. moving the allocation of resources toward the market equilibrium. moving the allocation of resources toward the socially optimal equilibrium. increasing the allocation of resources.

moving the allocation of resources toward the socially optimal equilibrium

When externalities exist, buyers and sellers do not neglect the external effects of their actions, and the market equilibrium is efficient. do not neglect the external effects of their actions, and the market equilibrium is not efficient. neglect the external effects of their actions, but the market equilibrium is still efficient. neglect the external effects of their actions, and the market equilibrium is not efficient.

neglect the external effects of their actions, and the market equilibrium is not efficient

A local park filled with picnickers is excludable and not rival in consumption. excludable and rival in consumption. not excludable and rival in consumption. not excludable and not rival in consumption.

not excludable and rival in consumption

The slope of an indifference curve is the marginal rate of preference. the marginal rate of substitution. always equal to the slope of the budget constraint. the rate of change of consumer's preferences.

the marginal rate of substitution

The provision of public goods gives rise to no externalities. rivalries in consumption. negative externalities. positive externalities.

positive externalities

Technology spillover is one type of subsidy. negative externality. producer surplus. positive externality.

positive externality

The provision of a public good generates a positive externality and the use of a common resource generates a negative externality. negative externality and the use of a common resource generates a positive externality. negative externality, as does the use of a common resource. positive externality, as does the use of a common resource.

positive externality and the use of a common resource generates a negative externality

Research into new technologies provides a positive externality, and too many resources are devoted to research as a result. negative externality, and too few resources are devoted to research as a result. negative externality, and too many resources are devoted to research as a result. positive externality, and too few resources are devoted to research as a result.

positive externality, and too few resources are devoted to research as a result

For most goods in an economy, the primary signal that guides the decisions of buyers and sellers is reputation. price. quality. advertising.

price

To enhance the well-being of society, a social planner will encourage firms to increase production when the firms are producing basic goods. negative externalities "spill over" into production. technology spillovers are associated with production. there is a shortage in the market.

technology spillovers are associated with production

In the absence of externalities, the "invisible hand" leads a market to maximize both equality and efficiency in that market. producer profit from that market. total benefit to society from that market. output of goods or services in that market.

total benefit to society from that market

The opportunity cost of an item is always less than the dollar value of the item. always greater than the cost of producing the item. the number of hours that one must work in order to buy one unit of the item. what you give up to get that item.

what you give up to get that item