Chapter 1 ASSES Homework

1) Suppose your New Year resolution is to get back in shape. How would you evaluate your options and choose an optimal​ one? A. Do a​ cost-benefit analysis to compare the alternatives. B. You should choose an activity randomly to avoid regretting your decision later. C. You should do the activity that gives you the greatest personal​ benefit, regardless of the cost. D. It makes the most sense to do the action that costs the least amount of money. When making your decision about which activity to​ choose, you should consider the monetary cost _________ the opportunity cost of the activities. The goal is to choose the option that offers the greatest _______ benefit.

1) A. Do a​ cost-benefit analysis to compare the alternatives. 2) as well as; net

Suppose that you allocate​ $20 each week for your entertainment budget. This money is spent on two​ items: either renting movies for​ $1 each at Redbox or downloading songs from iTunes at​ $1 each. 1) Given this​ information, which of the following would represent your budget constraint for​ entertainment? A. Amount spent on iTunes − Amount spent at Redbox​ = $20. B. Amount spent on iTunes​ + Amount spent at Redbox​ = $20. C. Amount spent on iTunes − Amount spent at Redbox − ​$1 =​ $20. D. Amount spent on iTunes​ + Amount spent at Redbox​ = $1. 2) Your budget constraint for entertainment illustrates the concept of _________, since as you increase your purchases of one​ item, you ____________.

1) B. Amount spent on iTunes​ + Amount spent at Redbox​ = $20. 2) trade-offs; must decrease your purchases of the other item

1) During the process of optimization economists believe that people are considering​ _________. A. what they would do if they had no money or time constraints of any kind. B. the feasibility of a​ choice, given the information available at the time. C. the benefits of their choices for others more than the benefits to themselves. D. only the decisions that will result in the least cost to the individual. 2) The goal of optimization for an individual is to maximize ______

1) B. the feasibility of a​ choice, given the information available at the time. 2) overall well-being

Identify the cause and effect in the following​ examples: 1) Lower infant mortality is _____ and an improvement in nutrition is ______ 2) A surge in cocoa prices is _____ and a pest attack on the cocoa crop is __________.

1) an effect; the cause 2) an effect; the cause

For a market to be in​ equilibrium, three conditions must hold (less than, greater than, equal to) 1) The amount produced by sellers must be _____ the amount purchased by buyers. 2) The costs of making a product must be _______ the final price at which the product sells. 3) Buyers must place a value on the uses of the product that is ______ the cost of buying the product.

1) equal to 2) less than 3) greater than

The three principles of economics include​ optimization, equilibrium, and empiricism. 1) Optimization describes a situation where_________ 2) Equilibrium describes a situation where_________ 3) Empiricism describes a situation where______ Options for blanks: -no one would benefit from changing his or her behavior. -people weigh costs and benefits when making a decision. -no one would benefit from changing his or her behavior.

1) people weigh costs and benefits when making a decision. 2) no one would benefit from changing his or her behavior. 3) no one would benefit from changing his or her behavior.

1) Free riding occurs when _________ are out of sync with __________ 2) Which of the following is subject to the​ free-rider problem? A. National security. B. Public libraries. C. A neighborhood watch. D. All of the above. 3) Which of the following is more susceptible to the​ free-rider problem: fishing in public lakes or street lights​? A. Use of street lights is more susceptible since even those who​ don't pay taxes still​ benefit, while fishing in public lakes can charge for a fishing license​, so that everyone who goes pays their share. B. Fishing in public lakes​, since a fishing license cannot be denied to anyone so everyone​ benefits, while street lights only benefit a small number of people at any given time. C. Both are equally susceptible to the​ free-rider problem. D. Neither are susceptible to the​ free-rider problem.

1) people's private benefits; the public interest. 2) D. All of the above 3) A. Use of street lights is more susceptible since even those who​ don't pay taxes still​ benefit, while fishing in public lakes can charge for a fishing license​, so that everyone who goes pays their share.

​Economics, anthropology,​ psychology, sociology, and political science all study human behavior. Economics differs from these other social sciences because it also addresses these three key​ concepts: _________. A. ​Optimization, equilibrium, and empiricism. B. ​Equilibrium, government​ actions, and incentives. C. ​Culture, optimization, and trade. D. ​Empiricism, ideology, and social responsibility.

A. ​Optimization, equilibrium, and empiricism.

When deciding whether to install visible countdown timers for pedestrians at​ crosswalks, which of the following would be considered in the​ cost-benefit analysis? ​(Check all that apply.​) A. The value of the lives lost by drivers who watch the countdown timers and try to make it through a light. Your answer is correct. B. The value of the​ pedestrians' lives saved by having the timers to assist in crossing the street. Your answer is correct. C. The higher maintenance bill associated with fixing these more complex signals when they break down. Your answer is correct. D. The cost in terms of dollars of installing these new timers all over the city.

ALL ARE CORRECT

Which of the following is not an example of a causal​ claim? A. Exercising daily will lead to weight loss. B. It rains more often on days you wash your car. C. Heavy drinking will lead to liver disease. D. All of the above are examples of causal claims.

B. It rains more often on days you wash your car.

​Let's say that you are trying to decide what to do on Friday at 11 a.m. You rank your possible options from the one you value the most to the one that you value the least in the following​ order: going to​ class, sleeping in​ late, going to work​ early, getting​ lunch, going to the gym to​ exercise, and watching television. If you decide to go to​ class, then what do we know about the opportunity cost of your​ decision? A. The opportunity cost would include sleeping in​ late, going to work​ early, getting​ lunch, going to the gym to​ exercise, and watching television. B. The opportunity cost would be sleeping in​ late, since it was your​ next-best option. C. The opportunity cost would be​ working, since it is the only option that can be put in a dollar amount. D. There would be no opportunity cost in this example.

B. The opportunity cost would be sleeping in​ late, since it was your​ next-best option.

The definition of economics states that it is the study of how​ _________. A. money influences the economy in the short run and the long run. B. agents choose to allocate scarce resources and the impact of those choices on society. C. businesses make decisions and how those decisions impact other​ firms, the​ government, and consumers. D. the government determines​ policies, businesses set​ prices, and consumers choose how much to buy.

B. agents choose to allocate scarce resources and the impact of those choices on society.

Economics is divided into two broad fields of​ study: microeconomics and macroeconomics. Microeconomics studies​ _________, while macroeconomics studies​ _________. A. ​money; policy. B. ​economy-wide phenomena; decisions made by the government. C. a small piece of the overall​ economy; the economy as a whole. D. issues relating to​ businesses; choices made by individuals and consumers.

C. a small piece of the overall​ economy; the economy as a whole.

The ethical implications of a hotly debated government policy would best be considered a​ _________. A. positive​ question, since it deals with a subjective issue based on personal preferences. B. normative​ question, since it deals with an objective issue based on factual evidence. C. normative​ question, since it deals with a subjective issue based on personal preferences. D. positive​ question, since it deals with an objective issue based on factual evidence.

C. normative​ question, since it deals with a subjective issue based on personal preferences.

Which of the following is true regarding the concept of​ causation? A. It states that if event A causes event​ B, then event B cannot have a causal effect on event A. B. It states that if event A causes event​ B, then event B must also cause event A. C. It describes how one event can bring about change in another. D. For any two events that​ occur, economists state that the first must have caused the​ second, since it came first.

C. It describes how one event can bring about change in another.

In which of the following areas will taking an economics course help benefit you throughout your​ life? A. It will help you analyze and predict human behavior in a variety of situations. B. It will give you the logic behind using​ cost-benefit analysis when evaluating decisions. C. It will instill the concept that what activity is given up by a decision plays an important role when making choices. D. All of the above.

D. All of the above.

Economics is divided into two broad fields of​ study: microeconomics and macroeconomics. Policy decisions made by the government are analyzed by​ _________. A. neither microeconomics nor macroeconomics. B. only macroeconomics. C. only microeconomics. D. both microeconomics and macroeconomics.

D. both microeconomics and macroeconomics.

Comparing a set of feasible alternatives and picking the best one is an optimization process called​ _________. A. statistical inference. B. likelihood estimation. C. normative analysis. D. ​cost-benefit analysis.

D. ​cost-benefit analysis.

A policy such as those limiting a firm's monopoly powers would be studied under ______​, since it deals with__________.

microeconomics; a small part of the economy

The statement that the United States has too many illegal immigrants is a ______ statement since it describes what people ______.

normative; ought to do

The statement that the United States has an average annual inflation rate of 2.1 percent is a _____ statement since it describes what people_______.

positive; actually do

The opportunity cost of an activity is a measure of _________ when you do that activity.

what is given up