ECON 1 HOMEWORK 1

It is not possible for this economy to produce at point

C

When society gets the most it can from its scarce resources, then the outcome is called

efficient

Which of the following is not a factor of production

money

The production possibilities frontier provides an illustration of the principle that

people face trade-offs

fundamentally, economics deals with

scarcity

in a market economy, economic activity is guided by

self-interest and prices

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

sell the ticket because the marginal benefit exceeds the marginal cost

If a nation has high and persistent inflation, the most likely explanation is

the central bank creating excessive amounts of money

Which of the following combinations of corn and wheat is notcurrently attainable but would be attainable if there was an improvement in overall production technology?

1,000 bushels of corn and 2,200 bushels of wheat

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

Money

Which of the following conclusions should not be drawn from observing this graph?

No other factors besides the frequency of service affect the number of passengers

Which is the most accurate statement about trade?

Trade can make every nation better off

Suppose two economists are arguing about policies that deal with unemployment. One economist says, "The government could lower unemployment by one percentage point if it would just increase government spending by 50 billion dollars." The other economist responds, "That's ridiculous. If the government spent an additional 50 billion dollars, it would reduce unemployment by only one-tenth of 1 percent, and that effect would only be temporary!" These economists

disagree because they have different scientific judgements

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

efficiency and equality

Emily and Betsey are economists. Emily thinks that the wealthiest 10 percent of the U.S. population should be taxed a rate higher than the rest of society because they can better afford it. Betsey thinks that everyone should be taxed at the same rate because that is the fairest scenario and the wealthy should not be penalized for their success. In this example, Emily and Betsey

have different normative views about tax policy

Which of the following claims is consistent with the views of mainstream economists?

if we increase the rate of inflation from 3 percent to 6 percent, then the rate of unemployment will temporarily fall

In a particular country in 1998, the average worker needed to work 25 hours to produce 40 units of output. In that same country in 2008, the average worker needed to work 40 hours to produce 68 units of output. In that country, the productivity of the average worker

increased by 6.25 percent between 1998 and 2008

An economy's production of two goods is efficient if

it is impossible to produce more of one good without producing less of the other

Production at point K is

possible but inefficient

your opportunity cost of going to a movie is

the total cash expenditure needed to go to the movie plus the value of your time

In the ordered pair (20, 30), 20 is the

the x-coordinate the horizontal location of the point

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.)

yes

Which of the following statements best represents the principle represented by the adage, "There ain't no such thing as a free lunch"?

Dani must decide between going to Florida or Brazil for spring break

sometimes economists disagree because their scientific judgments differ. Which of the following instances best reflects this source of disagreement?

One economist believes the government should tax a household's income; another economist believes the government should tax a household's consumption because it will cause households to save more.

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

coordinate system