ECO210 CH1

A line that rises at a 45 degree angle has a slope of

1

Abstraction can be thought of as

omitting unimportant details in order to understand complex phenomena.

An "opportunity cost" may be described as: ​

the value of what must be gtiven up

The opportunity cost to you of an action is

the value to you of the next best action you could have taken.

Suppose that a curve has a slope equal to zero at some point A. To the right of A, the curve may

All of the above are correct

You have just bought a used car, and drive away satisfied that you've made a good deal on the purchase. What would an economist say about your "gain" on the deal?

Both you and the seller have gained something.

Suppose Tammy grew up on a farm and is very good at plowing. In addition suppose she is a popular country singer who earns $4,000 per performance. If her husband Bob can plow (but not as well as Tammy) but he can't carry a tune, then it would be most efficient if

Tammy specialized in singing and Bob in plowing.

Which of the following is an example of a fiscal policy initiative?

Reduction in taxes

If trade between two countries is voluntary, one can expect that

both countries expect to gain something.

Economics is a social science rather than a "hard" science like physics because

economists study human behavior, which is affected by an unpredictable and vast range of influences.

The dramatic increase in the standard of living since the Industrial Revolution

has not meant unlimited abundance for societies or persons.

A useful economic model

may make some unrealistic assumptions in order to simplify a complex reality.

The law of comparative advantages explains why

nations trade with each other, regardless of their relative levels of economic development.

The United States produces both automobiles and computers more efficiently than Mexico. Nevertheless, it is possible that both nations would benefit from trade in these items. The reason for this is

the law of comparative advantage.

The principle of comparative advantage explains how

two nations may engage in mutually beneficial trade, even though one of them is more productive than the other.

The opportunity cost of any good or service is the

value of the next best alternative.

The term opportunity cost refers to the

value of what is forgone when a choice is made

Opportunity cost can best be defined as the

value of what must be given up in order to acquire an item.