Chapter 1 Homework
Which of the following is subject to the free-rider problem? A.Public libraries. B.National security. C.A neighborhood watch. D.All of the above.
D. All of the above
The three principles of economics includes optimization, equilibrium, and empiricism Equilibrium describes a situation where _________ Empiricism describes a situation where _____ Optimization describes a situation where _______
no one would benefit from changing his or her behavior economists use data to analyze what is happening in the world people weigh costs and benefits when making a decision
The statement that the U.S is too agressive in increasing the money supply is a ______ statement since it describes what people ________.
normative, ought to do
The goal of optimization for an individual is to maximize ________. .
overall well being
Free riding occurs when ___________ are out of sync with the_______
people's private benefits, public interest
The statement that the U.S saw the unemployment rate peak at 10% in 2009 is a ______ statement since it describes what people actually do.
positive, actually do
Identify the cause and effect in the following examples: Lower infant mortality is ____________ and an improvement in nutrition is ____________ .A surge in cocoa prices is ________ and a pest attack on the cocoa crop is ___________ .
an effect, cause an effect, cause
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.
as well as, net benefit
Which of the following is not an example of causation? A.Playing contact sports will lead to knee injuries B. Driving without car insurance will lead to getting into an accident C. Talking on the phone while driving will lead to car accidents D. All of the above are examples of causation
B. Driving without car insurance will lead to getting into an accident
Which of the following is more susceptible to the free-rider problem: state parks or street lights? A. Use of street lights is more susceptible since even those who don't pay taxes still benefit, while state parks can charge for admission, so that everyone who goes pays their share B. State parks, since admission 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
A. Use of street lights is more susceptible since even those who don't pay taxes still benefit, while state parks can charge for admission, so that everyone who goes pays their share
The definition of economics states that it is the study of how _________. A.agents choose to allocate scarce resources and the impact of those choices on society. B. money influences the economy in the short run and the long run. C.the government determines policies, businesses set prices, and consumers choose how much to buy. D.businesses make decisions and how those decisions impact other firms, the government, and consumers.
A.agents choose to allocate scarce resources and the impact of those choices on society.
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 pedestrians' lives saved by having the timers to assist in crossing the street. B. The cost in terms of dollars of installing these new timers all over the city. C.he higher maintenance bill associated with fixing these more complex signals when they break down. D.he value of the lives lost by drivers who watch the countdown timers and try to make it through a light.
All of them
Economics is divided into two broad fields of study: microeconomics and macroeconomics. Microeconomics studies _________, while macroeconomics studies _________. A.economy-wide phenomena; decisions made by the government. B.a small piece of the overall economy; the economy as a whole. C.money; policy. D issues relating to businesses; choices made by individuals and consumers.
B.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 a subjective issue based on personal preferences. C. positive question, since it deals with an objective issue based on factual evidence. D.normative question, since it deals with an objective issue based on factual evidence
B.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.
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 be working, since it is the only option that can be put in a dollar amount. B.The opportunity cost would include sleeping in late, going to work early, getting lunch, going to the gym to exercise, and watching television. C.The opportunity cost would be sleeping in late, since it was your next-best option. D.There would be no opportunity cost in this example.
C.The opportunity cost would be sleeping in late, since it was your next-best option.
In which of the following areas will taking an economics course help benefit you throughout your life? A.It will instill the concept that what activity is given up by a decision plays an important role when making choices. B.It will help you analyze and predict human behavior in a variety of situations. C.It will give you the logic behind using cost-benefit analysis when evaluating decisions. D.All of the above.
D.All of the above.
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. Given this information, which of the following would represent your budget constraint for entertainment? A.Amount spent on iTunes minus− Amount spent at Redbox = $20. B.Amount spent on iTunes minus− Amount spent at Redbox minus− $1 = $20. C.Amount spent on iTunes + Amount spent at Redbox = $1. D.Amount spent on iTunes + Amount spent at Redbox = $20.
D.Amount spent on iTunes + Amount spent at Redbox = $20.
Suppose your New Year resolution is to get back in shape. You are considering various ways of doing this: you can sign up for a gym membership, walk to work, take the stairs instead of the elevator, or watch your diet. How would you evaluate these options and choose an optimal one? A.It makes the most sense to do the action that costs the least amount of money. 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.Do a cost-benefit analysis to compare the alternatives.
D.Do a cost-benefit analysis to compare the alternatives.
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.Empiricism, ideology, and social responsibility. B.Equilibrium, government actions, and incentives. C.Culture, optimization, and trade. D.Optimization, equilibrium, and empiricism.
D.Optimization, equilibrium, and empiricism.
Policy decisions made by the government are analyzed by _________. A.either microeconomics nor macroeconomics. B.only microeconomics. C.only macroeconomics. 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.
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 benefits of their choices for others more than the benefits to themselves. C.only the decisions that will result in the least cost to the individual. D.the feasibility of a choice, given the information available at the time.
D.the feasibility of a choice, given the information available at the time.
For a market to be in equilibrium, three conditions must hold. Fill in the blanks below to complete these conditions. The amount produced by sellers must be ___the amount purchased by buyers. The costs of making a product must be _________the final price at which the product sells. Buyers must place a value on the uses of the product that is ___________the cost of buying the product.
equal to, less than, greater than
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 overall economy
Your budget constraint for entertainment illustrates the concept of __________ , since as you increase your purchases of one item, you must __________.
tradeoffs, decrease your purchases of the other item
The opportunity cost of an activity is a measure of ________ when you do that activity.
what is given up