ECON 101 CH 2, econ first test, Economics Chapter 1 and 2 Quiz, Economics 101 - Chapter 2, Kokol Unit 4 review
The term ________ means "additional."
"marginal"
Using the table, what is the total federal income tax bill for someone who makes $67,000 per year
$12,780
Suppose that Sheldon and Leonard can either run errands or wash dishes. Their maximum output per hour is listed in the following table. Given the same quantity of resources, at what terms of trade (relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontiers (PPFs)?
1 errand run per 30 dishes washed
If Jim and Pam were to specialize and trade, at what exchange rate would they find some quantity of trade to be mutually beneficial?
1 pizza for 1 stromboli
The Five Foundations of Economics are:
1. Incentives 2. Trade-offs 3. Opportunity Cost 4. Marginal Thinking 5. Trade Creates Value
What is Angelo's opportunity cost of a sculpture?
1/3 painting
What is Gibbs's opportunity cost of making a wooden boat?
10 solved crimes
Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake one loaf of bread and one hour to make one pie. Joey takes four hours to bake one loaf of bread and four hours to make one pie.What is Rachel's opportunity cost of baking a loaf of bread?
2 pies
What is Michael's opportunity cost of a painting?
2 sculptures
What is Jim's opportunity cost of making a pizza?
2 stromboli
Suppose that Dwight and Jim can either make salads or grill steaks. Their maximum output per hour is listed in the following table. Given the same quantity of resources, at what terms of trade (relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontiers (PPFs)?
2.5 salads per 1 steak
What is DiNozzo's opportunity cost of making a wooden boat?
20 solved crimes
What is Angelo's opportunity cost of a painting?
3 sculptures
The opportunity cost of increasing the production of apple pies from 12 to 14 pies is:
4 blueberry pies.
Given the same quantity of resources, what is Alicia Keys's opportunity cost of producing a New York pizza?
5/2 Philly cheesesteaks
At what terms of trade (relative price ratio) could Zuckerberg and Gates specialize and trade with one another so that both have more trees planted and mulch spread than they could accomplish on their own?
7 trees planted per 12 cubic yards of mulch spread
<img src="https://clarkcollege.instructure.com/assessment_questions/115579198/files/69254110/download?verifier=gvU4eYEBtga8WLy3tROsj5L1otxiQD80YYLSxPfy" alt="nar001-1.jpg"/> Which point in the above figure shows that productive resources are NOT fully employed?
A
Actions and activities are encouraged with which type of incentive? a. positive b. negative c. neutral d. complementary e. unintended
A
For both parties to benefit from specialization and trade, the trading parties must agree on: a. a price somewhere between their opportunity costs of production. b. a plan not to trade with other parties. c. who has the absolute advantage in production. d. the appropriate level of investment for the future. e. the source of comparative advantage.
A
Goods that are produced now so that they can be used to produce other goods in the future are called: a. capital goods. b. consumer goods. c. investment goods. d. normal goods. e. opportunity goods.
A
Graph: Unemployed resources are evident at: a. point A. b. point B. c. point C. d. point D. e. points B, C, and E.
A
Graph: Which of the following represents an inefficient point? a. point A b. point B c. point C d. point D e. point E
A
Greater investment in capital goods today leads to: a. greater growth in the production possibilities frontier (PPF) in the future. b. greater consumption today. c. the end of scarcity. d. less opportunity cost. e. scarcity.
A
Is there an opportunity cost to increased investment in capital goods today? a. Yes, increased production of capital goods means fewer consumer goods today. b. Yes, increased production of capital goods today means less economic growth in the future. c. No, increased production of capital goods today does not mean fewer consumer goods today. d. No, increased production of capital goods today guarantees more consumption today. e. No, if society is producing at an efficient point on the production possibilities frontier (PPF), then there is no opportunity cost to investment in capital goods.
A
Michael and Angelo are both artists who can create sculptures or paint paintings each day. The following table describes their maximum outputs per day. Does either person have an absolute advantage? a. Yes, Michael has an absolute advantage in both sculptures and paintings. b. Yes, Angelo has an absolute advantage in both sculptures and paintings. c. Yes, Michael has an absolute advantage in paintings, and Angelo has an absolute advantage in sculptures. d. Yes, Michael has an absolute advantage in sculptures, and Angelo has an absolute advantage in paintings. e. No, neither has an absolute advantage.
A
Opportunity cost is evident on the production possibilities frontier (PPF) graph: a. as you move from one point on the frontier to another point on the frontier. b. as you move from the origin to any inefficient point. c. as you move from one unattainable point to an efficient point on the frontier. d. as you move from an inefficient point to the origin. e. at any one single point on the graph.
A
See Graph: Given current resources and technology, the unattainable range is best described as: a. only area O: points outside the PPF. b. points on the PPF only. c. only area I: points inside the PPF. d. area I: inside the PPF and points on the PPF. e. Area O: outside the PPF and points on the PPF.
A
See Graph: The inefficient point(s) is (are): a. point A. b. points C and D. c. point C. d. point D. e. points B, C, and E.
A
See Graph: Which point in the corresponding figure shows that productive resources are not fully employed? a. point A b. point B c. point C d. point D e. point E
A
Specialization and trade allow individuals to: a. consume outside their own production possibilities frontier (PPF). b. shift their PPF outward. c. produce more goods with less technology. d. eliminate scarcity. e. produce fewer goods with less technology.
A
Suppose a new generation of baby boomers is entering the workforce. Which graph best depicts how this would affect the PPF? a. Graph A b. Graph B c. Graph C d. Graph D e. Graph E
A
The _________ states that the opportunity cost of producing a good always rises as you produce more of it. a. law of increasing relative cost b. law of positive economics c. law of demand d. production possibilities frontier (PPF) model e. zero-sum game
A
The opportunity cost of every investment in capital goods is: a. current consumption (consumer goods). b. future consumption (capital goods today). c. absolute advantage. d. comparative advantage. e. scarcity.
A
The production possibilities frontier (PPF) shows: a. the trade-off between the efficient production of two different goods. b. the difference between micro analysis and macro analysis. c. the difference between normative and positive analysis. d. how a firm should price a new product. e. how price and quantity are related for a single good.
A
The term ________ means "additional." a. "marginal" b. "comparative" c. "incentive" d. "opportunity cost" e. "trade-off"
A
Which allocation point in the short-run production possibilities frontier (PPF) will lead to NO GROWTH in the long-run PPF? a. point A b. point B c. point C d. point D e. point E
A
_______ would be hurt by unexpected inflation
A worker who signed a two-year wage contract
Refer to the following table to answer the five questions that follow. Given the same quantity of resources, what is Alicia Keys's opportunity cost of producing a New York pizza? A. 5/2 Philly cheesesteaks B. 3 Philly cheesesteaks C. 4/5 New York pizza D. 2/5 Philly cheesesteak E. 1/3 New York pizza
A. 5/2 Philly cheesesteaks
Consider the production possibilities frontier (PPF) shown in the figure below to answer the three questions that follow. Given current resources and technology, the unattainable range is best described as which places on the figures? A. only area O: points outside the PPF. B. area O: outside the PPF and points on the PPF. C. area I: inside the PPF and points on the PPF. D. only area I: points inside the PPF. E. points on the PPF only.
A. only area O: points outside the PPF.
Refer to the accompanying figure to answer the four questions that follow. The inefficient point(s) on the figure is/are: A. point A. B. point C. C. point D. D. points B, C, and E. E. points C and D.
A. point A.
Refer to the following figure to answer the four questions that follow. Based on the graph, what is the most preferred consumption point for a pie-appreciating society? A. point E B. point A C. point D D. point C E. point B
A. point E
Because of scarcity: a. individuals and societies are allowed no choice about which wants and needs to satisfy. b. individuals and societies must choose which wants and needs to satisfy. c. all choices about wants and using resources must be made by the government. d. choices can be made about which wants to satisfy, but not about which resources to use. e.choices must be made about which resources to use, but not about which wants to satisfy
ANS: B
Given an eight-hour workday, which statement best describes the absolute advantage evident in the table?
Alicia Keys has an absolute advantage in the production of both foods.
Loans and deposits within a banks are:
Assets and liabilities, respectively, on a banks balance sheet
The government withdraws social insurance taxes from the paychecks of workers to:
Assists the elderly retired who previously paid their payroll taxes
A person has a comparative advantage in the production of a good when she or he can produce the product at a(n) ________ opportunity cost compared to another person. a. higher b. lower c. equal d. diminishing e. increasing
B
As you move from one efficient point on the production possibilities frontier (PPF) to another efficient point on the PPF, you experience: a. decreasing relative cost. b. opportunity cost. c. macroeconomics. d. unlimited resources. e.unattainable combinations
B
Comparative advantage emerges because of the presence of: a. trade. b. differing opportunity costs. c. marginal benefits equaling marginal costs. d. scarcity. e. incentives.
B
Consider the following scenario. Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake one loaf of bread and one hour to make one pie. Joey takes four hours to bake one loaf of bread and four hours to make one pie. If Rachel and Joey decide to specialize in order to maximize their combined output, who should produce what? a. Joey should specialize in making pies because he has an absolute advantage. b. Rachel should specialize in making pies and Joey should specialize in making bread. c. Joey should specialize in making pies and Rachel should specialize in making bread. d. Rachel should specialize in making bread and pies because she has a comparative advantage in both. e. Rachel should not specialize because she is better at producing both.
B
Goods that are produced for current consumption are called: a. capital goods. b. consumer goods. c. investment goods. d. normal goods. e. opportunity goods.
B
Graph: An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an: a. inward shift of the PPF. b. outward shift of the PPF. c. outward rotation along the x axis. d. outward rotation along the y axis. e. increase in opportunity cost.
B
Graph: As you move from points N to M to L, the opportunity cost of additional apple pie: a. decreases due to the law of increasing relative cost. b. increases due to the law of increasing relative cost. c. decreases due to the law of normative economics. d. increases due to the law of marginal analysis. e. decreases due to enhancements in technology.
B
Graph: What is Angelo's opportunity cost of a sculpture? a. 1/2 painting b. 1/3 painting c. 3 paintings d. 1/3 sculpture e. 6/10 sculpture
B
Graph: What is Michael's opportunity cost of a sculpture? a. 2 paintings b. 1/2 painting c. 3 paintings d. 1/3 sculpture e. 1/2 sculpture
B
If a society is producing at a point on the production possibilities frontier (PPF), it can only increase the production of one good by: a. also increasing the production of the second good. b. decreasing the production of the second good. c. increasing the price of the second good. d. decreasing the price of the second good. e.reducing the resources available for production
B
Microeconomics is the study of: a. how government activities affect the economy. b. individual decision-making units. c. collective decision-making. d. the operation of the economy as a whole. e. the interaction between the government and businesses.
B
Opportunity cost is the ________ alternative forfeited when a choice is made. a. least-valued b. highest-valued c. most recently considered d. most convenient e. first
B
See Graph: In the figure, point E is: a. an efficient point. b. unattainable with current resources. c. an inefficient point. d. the equilibrium. e. evidence that trade does not enrich society.
B
See Graph: The set of efficient points is best described as: a. only area O: points outside the PPF. b. points on the PPF only. c. only area I: points inside the PPF. d. area I: inside the PPF and points on the PPF. e.area O: outside the PPF and points on the PPF
B
Suppose that Sheldon and Leonard can either run errands or wash dishes. Their maximum output per hour is listed in the following table. Given the same quantity of resources, at what terms of trade (relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontier (PPF)? a. 1 errand run per 75 dishes washed b. 1 errand run per 30 dishes washed c. 1 errand run per 12 dishes washed d. 1 errand run per 10 dishes washed e. 1 errand run per 6 dishes washed
B
Suppose the printing press is invented. Which graph best depicts how this would affect the PPF? a. Graph A b. Graph B c. Graph C d. Graph D e. Graph E
B
Suppose you are studying a production possibilities frontier (PPF) that has a bowed-out shape relative to the origin. What causes this shape? a. economic growth b. the law of increasing relative cost c. absolute advantage d. normative economics e. more resources
B
To determine which of two producers has a comparative advantage, you would need to know their: a. increasing relative costs. b. opportunity costs of production for both goods. c. normative beliefs. d. zero-sum games. e. level of investment.
B
Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie.What is Rachel's opportunity cost of baking 1 loaf of bread? a. 4 pies b. 2 pies c. 1 pie d. 1 loaf of bread e. 1/2 loaf of bread
B
When one producer has a comparative advantage in production, she: a. can produce more output than someone else using the same quantity of resources. b. can produce a good at a lower opportunity cost than someone else. c. does not benefit from trade with other producers. d. is unable to reach her production possibilities frontier (PPF). e. trades only with others who have the same comparative advantage.
B
When the opportunity cost of producing a good rises as you produce more of it, you experience: a. normative economics. b. increasing relative costs. c. downward-sloping demand. d. inferior goods. e. increasing marginal utility.
B
You can see that the opportunity cost of moving from point B to point D is different from the opportunity cost of moving from point D to point C because: a. apples are bigger than blueberries. b. the slope of the production possibilities frontier (PPF) is different in each of the two segments. c. they are all efficient points. d. they are all attainable points. e. the opportunity cost is constant along the PPF.
B
You have an absolute advantage in producing something whenever: a. you enjoy producing that good. b. you can produce more of it than someone else can using the same quantity of resources. c. your opportunity cost is constant. d. your opportunity cost is lower than that of other producers. e. you have specific training in the production of that good.
B
Economics is the study of: A. How to make money B. How to allocate resources to satisfy wants and needs C. Capitalism D. How to make workers more productive and firms more profitable E. Markets
B. How to allocate resources to satisfy wants and needs
Which of the following is a positive statement? A. We should forgo some current consumption in order to invest in the future. B. Increases in the minimum wage cause unemployment. C. We ought to deregulate the mortgage market. D. An economist should test every theory at least twice. E. The government must provide unlimited health care to citizens.
B. Increases in the minimum wage cause unemployment.
Why do economists use models? A. Models allow us to examine more factors than what actually exists in our world. B. Models allow us to study a simplified version of a complex world. C. Models are used to add complexity to a simple world. D. Models allow us to control external factors. E. Models make the world harder to understand.
B. Models allow us to study a simplified version of a complex world.
Which of the following is a normative statement? A. A unicycle has five wheels. B. You should wear a helmet when cycling. C. The sky is blue. D. A bicycle has two wheels. E. Electricity follows the path of least resistance.
B. You should wear a helmet when cycling.
When one producer can create more of a good than another producer using the same quantity of resources, the first producer has: A. a zero-sum game. B. an absolute advantage. C. increasing relative costs. D. gains from trade. E. a comparative advantage.
B. an absolute advantage.
Refer to the following figure to answer the five questions that follow.In the figure, point A is: A. unattainable with current resources. B. an inefficient point. C. the point where society would prefer to consume. D. an efficient point. E. the equilibrium.
B. an inefficient point.
Ceteris paribus, if a society is producing at a point on the production possibilities frontier (PPF), it can only increase the production of one good by: A. increasing the price of the second good. B. decreasing the production of the second good. C. also increasing the production of the second good. D. reducing the resources available for production. E. decreasing the price of the second good.
B. decreasing the production of the second good.
Refer to the following figure to answer the five questions that follow. Which point in the corresponding figure shows that productive resources are NOT fully employed? A. point C B. point A C. point E D. point D E. point B
B. point A
Refer to the following figures to answer the two questions that follow.Which allocation point in the short-run production possibilities frontier (PPF) will lead to NO growth in the long-run PPF? A. point B B. point A C. point D D. point C E. point E
B. point A
Refer to the accompanying figure to answer the four questions that follow. Which point(s) on the figure show inefficient use of resources? A. point D. B. point A. C. points B, C, and E. D. point B. E. point C.
B. point A.
A society that is producing its maximum combination of goods and using all available resources for production: a. has minimized its opportunity cost. b. has maximized its opportunity cost. c. is operating on its production possibilities frontier (PPF). d. is operating outside its production possibilities frontier (PPF). e. has eliminated scarcity.
C
An increase in the labor force would be reflected in a society's production possibilities frontier (PPF) by an: a. increase in opportunity cost. b. inward shift of the PPF. c. outward shift of the PPF. d. outward rotation along the x axis. e. outward rotation along the y axis.
C
Economics is concerned with the trade-offs that emerge because of scarcity. The term "trade-offs" refers to: a. the decision about whether households or businesses should bear the entire burden of the scarcity problem. b. the buying and selling that occur as unwanted goods are exchanged for goods that are desired. c. the alternatives given up when making choices. d. recycling and transforming old goods into new goods to reduce scarcity problems. e.forcing businesses to produce some goods and services and not others.
C
Forgoing current consumption so that those resources can be used to produce new capital is called: a. absolute advantage. b. comparative advantage. c. investment. d. scarcity. e. saving.
C
Graph: According to the figure, a new technology that makes it easier to peel, core, and prepare apples will cause: a. the entire production possibilities frontier (PPF) to shift outward. b. the entire PPF to shift inward. c. the PPF to rotate outward to a larger maximum quantity of apple pies with no change in maximum blueberry pies. d. the PPF to rotate outward to a larger maximum quantity of blueberry pies with no change in maximum apple pies. e. the PPF to stay exactly the same because there is no change in resources.
C
Graph: The opportunity cost of increasing production of apple pies from 14 to 16 pies is: a. 2 blueberry pies. b. 14 apple pies. c. 7 blueberry pies. d. 4 blueberry pies. e. 16 blueberry pies.
C
Graph: Which statement best describes the opportunity cost evident in the production possibilities frontier (PPF) for the accompanying figure?a. The law of increasing relative cost applies because the PPF is a straight line. b. The law of increasing relative cost applies because the PPF is bowed outward. c. The opportunity cost is constant because the PPF is a straight line. d. The opportunity cost is constant because the PPF is bowed outward. e. The opportunity cost decreases because the line has negative slope.
C
If Elaine can produce more output from a set amount of resources than Jerry can, you know that: a. Elaine has a comparative advantage. b. Jerry has a comparative advantage. c. Elaine has an absolute advantage. d. Jerry has an absolute advantage. e. Elaine has a normative advantage.
C
On a production possibilities frontier (PPF) that shows the trade-off between consumer goods and capital goods given a fixed amount of labor, unemployment is illustrated by: a. movement from a point within the frontier to a point on the frontier. b. a point outside the frontier. c. a point within the frontier. d. movement from a point on the frontier to another point on the frontier. e. a point on the frontier.
C
Refer to the graph below. This society could reach point F when there is a(n):a. increase in the monetary price of apple pie. b. credible new study that shows blueberries reduce the risk of heart attack. c. increase in technology that makes pie bakers more efficient. d. new regulation that makes pie baking more costly. e. increase in the monetary price of blueberry pie.
C
See Graph: In the figure, point A is: a. an efficient point. b. unattainable with current resources. c. an inefficient point. d. the equilibrium. e.the point where society would prefer to consume
C
Suppose that Dwight and Jim can either make salads or grill steaks. Their maximum output per hour is listed in the following table. Given the same quantity of resources, at what terms of trade (relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontier (PPF)? a. 1 salad per 1 steak b. 2 salads per 1 steak c. 2.5 salads per 1 steak d. 3 salads per 1 steak e. 3.5 salads per 1 steak
C
Suppose the plow is invented and agricultural productivity greatly increases. Which of the following graphs best depicts how this would affect the PPF? a. Graph A b. Graph B c. Graph C d. Graph D e. Graph E
C
Suppose you find a production possibilities frontier (PPF) that is shaped like a straight line. What can you determine about the production of the two goods? a. Production of the two goods is subject to decreasing relative cost. b. Production of the two goods is subject to increasing relative cost. c. Production of the two goods is subject to constant opportunity cost anywhere along the PPF. d. One producer must have an absolute advantage in production. e. More resources will not cause the PPF to shift.
C
The cost of a trade-off is known as the ________ of that decision. a. marginal cost b. net cost c. opportunity cost d. comparative cost e. explicit cost
C
The process of using current resources to create or buy new capital is called: a. absolute advantage. b. comparative advantage. c. investment. d. the law of increasing relative cost. e. economic growth.
C
Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie. 67. What is Joey's opportunity cost of baking 1 loaf of bread? a. 4 pies b. 2 pies c. 1 pie d. 1 loaf of bread e. 1/2 loaf of bread
C
What creates comparative advantage? a. lower costs b. higher opportunity costs c. specialization d. scarcity e. population growth
C
When one producer can create more of a good than another producer using the same quantity of resources, the first producer has: a. a zero-sum game. b. gains from trade. c. an absolute advantage. d. a comparative advantage. e. increasing relative costs.
C
Which of the following is not a type of incentive? a. positive b. negative c. complementary d. indirect e. direct
C
Consider the following scenario to answer the five questions that follow. Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake one loaf of bread and one hour to make one pie. Joey takes four hours to bake one loaf of bread and four hours to make one pie. What is Joey's opportunity cost of baking a loaf of bread? A. 2 pies B. 4 pies C. 1 pie D. 1 loaf of bread E. 1/2 loaf of bread
C. 1 pie
The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the six questions that follow. What is Jim's opportunity cost of making a stromboli? A. 2 pizzas B. 2 stromboli C. 1/2 pizza D. 2/3 pizza E. 25 pizzas
C. 1/2 pizza
The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the five questions that follow. What is DiNozzo's opportunity cost for solving a crime? A. 1/10 of a boat B. 30 solved crimes C. 1/20 of a boat D. 20 solved crimes E. 5 solved crimes
C. 1/20 of a boat
If Elaine can produce more output from a set amount of resources than Jerry can, you know that ________ has a(n) ________ advantage. A. Jerry; comparative B. Elaine; normative C. Elaine; absolute D. Jerry; absolute E. Elaine; comparative
C. Elaine; absolute
Refer to the following figure for the five questions that follow. According to the figure, a new technology that makes it easier to peel, core, and prepare apples will cause the: A. entire PPF to shift inward. B. PPF to rotate outward to a larger maximum quantity of blueberry pies with no change in maximum apple pies. C. PPF to rotate outward to a larger maximum quantity of apple pies with no change in maximum blueberry pies. D. entire production possibilities frontier (PPF) to shift outward. E. PPF to stay exactly the same because there is no change in resources.
C. PPF to rotate outward to a larger maximum quantity of apple pies with no change in maximum blueberry pies.
Suppose you find a production possibilities frontier (PPF) that is shaped like a straight line. What can you determine about the production of the two goods? A. One producer must have an absolute advantage in production. B. Production of the two goods is subject to increasing relative cost. C. Production of the two goods is subject to constant opportunity cost anywhere along the PPF. D. Production of the two goods is subject to decreasing relative cost. E. More resources will not cause the PPF to shift.
C. Production of the two goods is subject to constant opportunity cost anywhere along the PPF.
Which of the following would NOT lead to an outward shift of a future production possibilities frontier (PPF)? A. the discovery of new resources B. population growth C. a decline in life expectancy D. an increase in technology E. increased investment today
C. a decline in life expectancy
Opportunity cost is evident on the production possibilities frontier (PPF) graph: A. at any one single point on the graph. B. as you move from one unattainable point to an efficient point on the frontier. C. as you move from one point on the frontier to another point on the frontier. D. as you move from the origin to any inefficient point. E. as you move from an inefficient point to the origin.
C. as you move from one point on the frontier to another point on the frontier.
Specialization and trade allow individuals to: A. produce more goods with less technology. B. produce fewer goods with less technology. C. consume outside their own production possibilities frontiers (PPFs). D. eliminate scarcity. E. shift their PPF outward.
C. consume outside their own production possibilities frontiers (PPFs).
One reason that economists make assumptions when designing models is to: A. increase internal factors. B. make models more complex. C. exclude variables that do not add predictive power to the model. D. ensure that all possible factors are included. E. make models more like the real world.
C. exclude variables that do not add predictive power to the model.
The area inside (within) the production possibilities frontier (PPF) contains ________ points. A. positive B. efficient C. inefficient D. normative E. high opportunity cost
C. inefficient
A positive statement: A. is a declaration of opinion. B. cannot be evaluated using the scientific method. C. is a claim that can be tested. D. is a statement about what ought to be. E. is a claim that cannot be tested.
C. is a claim that can be tested.
A society that is producing its maximum combination of goods and using all available resources for production: A. has minimized its opportunity cost. B. has eliminated scarcity. C. is operating on its production possibilities frontier (PPF). D. has maximized its opportunity cost. E. is operating outside its production possibilities frontier (PPF).
C. is operating on its production possibilities frontier (PPF).
The production possibilities frontier (PPF) shows: A. the difference between normative and positive analysis. B. how price and quantity are related for a single good. C. the trade-off between the efficient production of two different goods. D. the difference between micro analysis and macro analysis. E. how a firm should price a new product.
C. the trade-off between the efficient production of two different goods.
You have an absolute advantage in producing something whenever: A. you enjoy producing that good. B. you have specific training in the production of that good. C. you can produce more of it than someone else can using the same quantity of resources. D. your opportunity cost is lower than that of other producers. E. your opportunity cost is constant.
C. you can produce more of it than someone else can using the same quantity of resources.
The use of government spending and taxes to influence the economy is:
Called fiscal policy
: Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie.What is Joey's opportunity cost of baking 1 pie? a. 4 pies b. 2 pies c. 1 pie d. 1 loaf of bread e. 1/2 loaf of bread
D
An activity's marginal benefit is ________ at the optimal quantity. a. zero b. greater than zero c. less than zero d. equal to the marginal cost e. greater than the marginal cost
D
An example of a direct positive incentive is: a. a prison sentence for committing a crime. b. unemployment insurance for those who are laid off. c. providing a workplace safety program. d. providing a commission for sales. e. threatening to fire those who do not perform well.
D
An opportunity cost is the: a. lowest possible cost. b. highest possible cost. c. monetary price paid for a good or service. d. cost of a purchase or decision as measured by what is given up. e. cost of finding the lowest price for a product.
D
At full employment, a society produces: a. somewhere within its production possibilities frontier (PPF). b. somewhere outside its PPF. c. at the origin on its PPF graph. d. on its PPF. e. only one good.
D
Consumer goods: a. are produced today to be used to produce more goods in the future. b. are produced today to be consumed at some point in the future. c. are invested today in order to consume more today. d. are produced today to be consumed today. e. generate economic growth.
D
Goods that are produced today in order to make other valuable goods and services in the future are called: a. normal goods. b. inferior goods. c. consumer goods. d. capital goods. e. personal goods.
D
Graph: Economic growth is represented on a production possibilities frontier (PPF) by the PPF: a. getting steeper. b. getting flatter. c. shifting inward. d. shifting outward. e. rotating downward.
D
Graph: Given your current resources, you would need even more hours in each day in order to attain: a. point A. b. point B. c. point C. d. point D. e. point E.
D
Graph: The opportunity cost of increasing the production of apple pies from 12 to 14 pies is: a. 2 blueberry pies. b. 14 apple pies. c. 7 blueberry pies. d. 4 blueberry pies. e. 2 apple pies.
D
Graph: What is Michael's opportunity cost of a painting? a. 1/2 painting b. 1/2 sculpture c. 3 paintings d. 2 sculptures e. 2 paintings
D
If the government wanted to give people a negative direct incentive not to save money, what would be the appropriate policy? a. providing individuals a subsidy to save their money b. providing funding for an advertising campaign encouraging people to spend more money c. informing individuals that saving money causes people not to spend money, which will cause them to lose their jobs d. imposing a tax on individuals for saving their money e. informing consumers about all that they could buy with their money with the hope that they spend more
D
Rational decision-making under conditions of scarcity requires individuals to: a. place a monetary value on everything. b. know the prices of all goods they might buy. c. be alert to price reductions on desired products. d. understand that trade-offs are necessary. e. earn as much income as possible.
D
See Graph: Given current resources and technology, the attainable range is best described as: a. only area O: points outside the PPF. b. points on the PPF only. c. only area I: points inside the PPF. d. area I: points inside the PPF and points on the PPF. e. Area O: points outside the PPF and points on the PPF.
D
See Graph: How is opportunity cost illustrated? a. a move from point A to point B b. a move from point A to point C c. a move from point C to point D d. a move from point B to point C e. a move from point D to point E
D
Suppose a great plague wipes out half of the society's population. Which of the following graphs best depicts how this would affect the PPF? a. Graph A b. Graph B c. Graph C d. Graph D e. Graph E
D
Suppose that, on a particular Saturday, Mark Zuckerberg and Bill Gates can either plant trees or spread mulch in their gardens. Their maximum output per day is listed in the following table, along with spaces where you can calculate the opportunity cost. Who has an absolute advantage in spreading mulch? a. Zuckerberg has the advantage because he gives up fewer trees each time he spreads 1 cubic yard of mulch. b. Gates has the advantage because he gives up fewer trees each time he spreads 1 cubic yard of mulch. c. Zuckerberg has the advantage because he gives up more trees each time he spreads 1 cubic yard of mulch. d. Neither has an absolute advantage in spreading mulch. e. Both parties have an absolute advantage in planting trees.
D
The ability of one producer to produce a good at a lower opportunity cost than another producer is called: a. a normative statement. b. a zero-sum game. c. absolute advantage. d. comparative advantage. e. the law of increasing relative cost.
D
The area inside (within) the production possibilities frontier (PPF) contains: a. normative points. b. positive points. c. efficient points. d. inefficient points. e. high opportunity cost points.
D
The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next two questions. What is DiNozzo's opportunity cost for solving a crime? a. 20 solved crimes b. 30 solved crimes c. 5 solved crimes d. 1/20 of a boat e. 1/10 of a boat
D
The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next two questions. Which statement best describes absolute advantage? a. DiNozzo has an absolute advantage in the production of wooden boats. b. DiNozzo has an absolute advantage in both. c. Gibbs has an absolute advantage in solving crimes, whereas DiNozzo has an absolute advantage in making wooden boats. d. Gibbs has an absolute advantage in both. e.Gibbs has an absolute advantage in making wooden boats, whereas DiNozzo has an absolute advantage in solving crimes
D
The process of using current resources to create new capital is: a. absolute advantage. b. comparative advantage. c. specialization. d. investment. e. free.
D
Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake 1 loaf of bread and one hour to make 1 pie. Joey takes four hours to bake 1 loaf of bread and four hours to make 1 pie.What is Rachel's opportunity cost of baking 1 pie? a. 2 pies b. 1 pie c. 1 loaf of bread d. 1/2 loaf of bread e. 2 loaves of bread
D
Who benefits from voluntary trade? a. buyers b. sellers c. the government d. buyers and sellers e. buyers and the government
D
You have a comparative advantage in producing a good whenever: a. you enjoy producing that good. b. you can produce more of the good than someone else can using the same resources. c. your opportunity cost is constant. d. your opportunity cost of producing that good is lower than that of other producers. e. you have specific training in the production of that good.
D
Consider the following scenario to answer the five questions that follow. Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake one loaf of bread and one hour to make one pie. Joey takes four hours to bake one loaf of bread and four hours to make one pie. What is Joey's opportunity cost of baking a pie? A. 4 pies B. 1/2 loaf of bread C. 1 pie D. 1 loaf of bread E. 2 pies
D. 1 loaf of bread
Refer to the following figure for the five questions that follow.The opportunity cost of increasing production of blueberry pies from 7 to 11 pies is: A. 2 blueberry pies. B. 4 apple pies. C. 14 apple pies. D. 2 apple pies. E. 7 blueberry pies.
D. 2 apple pies.
Refer to the following figure for the five questions that follow.The opportunity cost of increasing production of apple pies from 14 to 16 pies is: A. 14 apple pies. B. 2 blueberry pies. C. 16 blueberry pies. D. 7 blueberry pies. E. 4 blueberry pies.
D. 7 blueberry pies.
Consider the following scenario to answer the two questions that follow. On a particular Saturday, Mark Zuckerberg and Bill Gates can either plant trees or spread mulch in their gardens. Their maximum output per day is listed in the following table, along with blanks where you can calculate the opportunity cost. At what terms of trade (relative price ratio) could Zuckerberg and Gates specialize and trade with one another so that both have more trees planted and mulch spread than they could accomplish on their own? A. 12 trees planted per 12 cubic yards of mulch spread B. 5 trees planted per 12 cubic yards of mulch spread C. 10 trees planted per 12 cubic yards of mulch spread D. 7 trees planted per 12 cubic yards of mulch spread E. 9 trees planted per 12 cubic yards of mulch spread
D. 7 trees planted per 12 cubic yards of mulch spread
Use these production possibilities frontier (PPF) curves, which compare the ancient production of agricultural products to art and literature, to answer the four questions that follow. Suppose a great plague wipes out half of the society's population. Which of the following graphs best depicts how this would affect the PPF? A. Graph C B. Graph E C. Graph A D. Graph D E. Graph B
D. Graph D
How will a reduction in the national unemployment rate affect a nation's production possibilities frontier (PPF)? A. It will cause the PPF to shift inward. B. It will cause the PPF to shift outward. C. It will move society to a point farther inside the PPF. D. It will move society outward to a point closer to or on the PPF. E. It will push society to a point outside its PPF.
D. It will move society outward to a point closer to or on the PPF.
Suppose Jason is a brilliant attorney who can draft especially persuasive legal briefs. He also happens to possess some excellent administrative skills such as typing, filing, assembling binders and notes, and making reservations. Which best describes whether Jason should hire an administrative assistant to help him? A. Jason should not hire an administrative assistant because he has an absolute advantage in performing administrative functions. B. Jason should hire an administrative assistant because the assistant would likely have an absolute advantage in writing legal briefs. C. Jason should not hire an administrative assistant because he likely has a comparative advantage in performing administrative functions. D. Jason should hire an administrative assistant because the assistant would likely have a comparative advantage in performing administrative functions. E. Jason should hire an administrative assistant because the assistant would likely have a comparative advantage in writing legal briefs.
D. Jason should hire an administrative assistant because the assistant would likely have a comparative advantage in performing administrative functions.
In economics, choices are necessary because of the presence of: A. Luxuries B. Inefficiency C. Needs D. Scarcity E. Incentives
D. Scarcity
Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the six questions that follow. Does either Michael or Angelo have a comparative advantage? A. No, neither has a comparative advantage. B. Yes, Angelo has a comparative advantage in both sculptures and paintings. C. Yes, Michael has a comparative advantage in sculptures, and Angelo has a comparative advantage in paintings. D. Yes, Michael has a comparative advantage in paintings, and Angelo has a comparative advantage in sculptures. E. Yes, Michael has a comparative advantage in both sculptures and paintings.
D. Yes, Michael has a comparative advantage in paintings, and Angelo has a comparative advantage in sculptures.
The ability of one producer to produce a good at a lower opportunity cost than another producer is called: A. a zero-sum game. B. the law of increasing relative cost. C. a normative statement. D. comparative advantage. E. absolute advantage.
D. comparative advantage.
A model without any simplifying assumptions: A. does not look like the real-world problem it is meant to address. B. excludes important predictive variables. C. provides simplified solutions to complex problems. D. is highly complex and likely unworkable. E. is very helpful for solving tough, real-world problems.
D. is highly complex and likely unworkable.
Refer to the following figures to answer the two questions that follow. Which allocation point in the short-run production possibilities frontier (PPF) will lead to the most significant growth in the long-run PPF? A. point B B. point A C. point C D. point E E. point D
D. point E
Refer to the following figure to answer the five questions that follow.In the figure, point E is: A. evidence that trade does not enrich society. B. the equilibrium. C. an efficient point. D. unattainable with current resources. E. an inefficient point.
D. unattainable with current resources.
Economists believe that optimal decisions are made up to the point where: a. marginal benefit is zero. b. marginal cost is zero. c. marginal benefits are greater than marginal costs. d. marginal costs are greater than marginal benefits. e. marginal benefits are equal to marginal costs.
E
Graph: The opportunity cost of increasing production of blueberry pies from 7 to 11 pies is: a. 2 blueberry pies. b. 14 apple pies. c. 7 blueberry pies. d. 4 apple pies. e. 2 apple pies.
E
Graph: What is Angelo's opportunity cost of a painting? a. 1/3 painting b. 1/3 sculpture c. 2/5 sculpture d. 3 paintings e. 3 sculptures
E
Graph: Which of the following represents a point that is unattainable with current resources and technology? a. point A b. point B c. point C d. point D e. point E
E
Indirect incentives create: a. positive consequences. b. negative consequences. c. indirect consequences. d. direct consequences. e. unintended consequences.
E
See Graph: Which point in the corresponding figure represents a combination of smoothies and milk shakes that society cannot currently produce? a. point A b. point B c. point C d. point D e. point E
E
The trade-offs that are made because of scarcity: a. are important in developing economies, but they do not apply to developed economies. b. are important in developed economies, but they do not apply to developing economies. c. are different when they involve the wants of people, but they are similar when they involve the needs of people. d. can be accurately made to the extent that they can be quantified. e. depend on the decision-maker's value judgments about the relative importance of the alternatives.
E
Which allocation point in the short-run production possibilities frontier (PPF) will lead to the most significant growth in the long-run PPF? a. point A b. point B c. point C d. point D e. point E
E
Which of the following would NOT lead to an outward shift of a future production possibilities frontier (PPF)? a. population growth b. increased investment today c. an increase in technology d. the discovery of new resources e. a decline in life expectancy
E
https://clarkcollege.instructure.com/assessment_questions/115579197/files/69254109/download?verifier=bItuMAw1S18xO3mn0grcH1JZSqqWOfN2I5VyyBgm Which point in the above figure represents a combination of smoothies and milk shakes that society cannot currently produce?
E
The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the five questions that follow. What is Gibbs's opportunity cost of making a wooden boat? A. 1/20 of a boat B. 30 solved crimes C. 20 solved crimes D. 1/10 of a boat E. 10 solved crimes
E. 10 solved crimes
Consider the following scenario to answer the five questions that follow. Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake one loaf of bread and one hour to make one pie. Joey takes four hours to bake one loaf of bread and four hours to make one pie. What is Rachel's opportunity cost of baking a loaf of bread? A. 1/2 loaf of bread B. 1 pie C. 1 loaf of bread D. 4 pies E. 2 pies
E. 2 pies
Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the six questions that follow. What is Michael's opportunity cost of a painting? A. 3 paintings B. 2 paintings C. 1/2 sculpture D. 1/2 painting E. 2 sculptures
E. 2 sculptures
Refer to the following figure for the five questions that follow. The opportunity cost of increasing the production of apple pies from 12 to 14 pies is: A. 14 apple pies. B. 2 apple pies. C. 7 blueberry pies. D. 2 blueberry pies. E. 4 blueberry pies.
E. 4 blueberry pies.
Refer to the following table to answer the five questions that follow. Given an eight-hour workday, which statement best describes the absolute advantage evident in the table? A. Alicia Keys has an absolute advantage in making pizzas, and Jay-Z has an absolute advantage in making cheesesteaks. B. Neither party has an absolute advantage. C. Jay-Z has an absolute advantage in the production of both foods. D. Jay-Z has an absolute advantage in making pizzas, and Alicia Keys has an absolute advantage in making E. Alicia Keys has an absolute advantage in the production of both foods.
E. Alicia Keys has an absolute advantage in the production of both foods.
Use these production possibilities frontier (PPF) curves, which compare the ancient production of agricultural products to art and literature, to answer the four questions that follow. Suppose a new generation of baby boomers is entering the workforce. Which graph best depicts how this would affect the PPF? A. Graph C B. Graph D C. Graph E D. Graph B E. Graph A
E. Graph A
Use these production possibilities frontier (PPF) curves, which compare the ancient production of agricultural products to art and literature, to answer the four questions that follow. Suppose the printing press is invented. Which graph best depicts how this would affect the PPF? A. Graph A B. Graph E C. Graph C D. Graph D E. Graph B
E. Graph B
Refer to the following figure to answer the five questions that follow. Which statement best describes the opportunity cost evident in the production possibilities frontier (PPF) for the corresponding figure? A. The law of increasing relative cost applies because the PPF is a straight line. B. The opportunity cost is constant because the PPF is bowed outward. C. The opportunity cost decreases because the line has a negative slope. D. The law of increasing relative cost applies because the PPF is bowed outward. E. The opportunity cost is constant because the PPF is a straight line.
E. The opportunity cost is constant because the PPF is a straight line.
Money eliminated the need for the double coincidence of wants through its role as: A. an accounting unit. B. a hard currency. C. fiat, or declared, money. D. something to store value. E. a medium of exchange.
E. a medium of exchange.
On a production possibilities frontier (PPF) that shows the trade-off between consumer goods and capital goods given a fixed amount of labor, unemployment is illustrated by: A. movement from a point on the frontier to another point on the frontier. B. a point outside the frontier. C. a point on the frontier. D. movement from a point within the frontier to a point on the frontier. E. a point within the frontier.
E. a point within the frontier.
The ________ illustrates the various combinations of output that a society can produce if all of its resources are being used efficiently. A. law of demand B. principle of comparative advantage C. concept of absolute advantage D. law of positive statements E. production possibilities frontier (PPF)
E. production possibilities frontier (PPF)
Which of the following would be a consequence in an economy where there is no money?
Exchanges would take longer.
Suppose a great plague wipes out half of the society's population. Which of the following graphs best depicts how this would affect the PPF?
Graph D
If Heather can sell paper at a lower opportunity cost than Eitan can, then ________ has a(n) ________ advantage in paper sales.
Heather; comparative
The purchase of existing government bonds by the Federal Reserve will:
Increase the money supply
Which of the following is a positive statement?
Increases in the minimum wage cause unemployment.
When the Fed buys bonds from financial institutions, new money move directly:
Into the loanable funds market
Which of the following is NOT a characteristic of fiat money?
It is always backed by something of high intrinsic value
How will a reduction in the national unemployment rate affect a nation's production possibilities frontier (PPF)?
It will move society outward to a point closer to or on the PPF.
Money does NOT function as a(n):
Item to barter
Suppose Jason is a brilliant attorney who can draft especially persuasive legal briefs. He also happens to possess some excellent administrative skills such as typing, filing, assembling binders and notes, and making reservations. Which best describes whether Jason should hire an administrative assistant to help him?
Jason should hire an administrative assistant because the assistant would likely have a comparative advantage in performing administrative functions.
Which of the following is a positive statement?
Legally requiring dogs to have rabies shots will reduce the number of rabid dogs.
According to the U.S. Federal Tax Rates chart from the textbook (Table 17.1), a person earning $100,000 in a given year is in the 28% tax bracket. How much will this individual owe in taxes for that year?
Less than $28,000 but greater than $15,000
When money is acting as a unit of account, it allows one to:
Measure the value of goods
In which of the following situations does money serve as a store of value?
Money can be used to purchase approximately the same amount of goods over time
Who has an absolute advantage in spreading mulch?
Neither has an absolute advantage in spreading mulch.
Which of the following is a positive statement?
On average, people save 15% when they switch to GEICO.
The Federal Reserve generally uses _____ to implement monetary policy
Open market operations
According to the figure, a new technology that makes it easier to peel, core, and prepare apples will cause the:
PPF to rotate outward to a larger maximum quantity of apple pies with no change in maximum blueberry pies.
Which statement best describes the absolute advantage shown in the figures?
Pam has an absolute advantage in the production of pizzas, and Jim has an absolute advantage in the production of stromboli.
Suppose you find a production possibilities frontier (PPF) that is shaped like a straight line. What can you determine about the production of the two goods?
Production of the two goods is subject to constant opportunity cost anywhere along the PPF.
Which of the following figures illustrate the feet's of expansionary monetary policy on the loanable funds market?
S part of the graph move to the right
In economic terms, how would you state what has happened when your neighbor says he is unwilling to help you mow your lawn because you are unwilling to help him teach his kids how to speak with a British accent?
The double coincidence of wants was not satisfied.
Which of the following is a normative statement?
We should strive to push the PPF outward.
Which of the following is a normative statement?
Winters in Arkansas are too cold.
Does either Michael or Angelo have a comparative advantage?
Yes, Michael has a comparative advantage in paintings, and Angelo has a comparative advantage in sculptures.
Which of the following would NOT lead to an outward shift of a future production possibilities frontier (PPF)?
a decline in life expectancy
Money eliminated the need for the double coincidence of wants through its role as:
a medium of exchange.
How is opportunity cost illustrated in the figure?
a move from point B to point C
On a production possibilities frontier (PPF) that shows the trade-off between consumer goods and capital goods given a fixed amount of labor, unemployment is illustrated by:
a point within the frontier.
For both parties to benefit from specialization and trade, the trading parties must agree on:
a price somewhere between their opportunity costs of production.
Which of the following could cause the supply curve for the market for oranges to shift to the left?
a severe hurricane in Florida
The ability of one producer to create more of a good than another producer using the same quantity of resources is called:
absolute advantage.
When money is acting as a medium of exchange, it:
allows you to make exchanges more efficiently.
When one producer can create more of a good than another producer using the same quantity of resources, the first producer has:
an absolute advantage.
When trade is voluntary, who benefits?
both the buyer and the seller
The use of the money supply to influence the economy is:
called monetary policy.
Which of the following CANNOT be found on a banks balance sheet
cash held by individuals
In a fiat money economy, M1 includes currency as well as:
checkable deposits
Which of the following is most liquid
checking deposits
Specialization and trade allow individuals to:
consume outside their own production possibilities frontiers (PPFs).
When the price of ground beef increases and all else is held constant, we would expect the supply of hamburgers to ________, causing the price to ________.
decrease; increase
As the prices of goods and services increase, the value of money:
decreases
During a financial crisis hit hard by bank failures, the money supply:
decreases because people start withdrawing their money from banks.
When supply shifts to the right and demand stays constant, the equilibrium price ________ and the equilibrium quantity ________.
decreases; increases
if a society is producing at a point on the production possibilities frontier (PPF), it can only increase the production of one good by:
decreasing the production of the second good.
Comparative advantage emerges because of the presence of:
differing opportunity costs.
In a growing number of cities, stores are required either not to make available plastic or paper bags or to do so only for an additional fee. What kind of incentive is this fee?
direct
One reason that economists make assumptions when designing models is to:
exclude variables that do not add predictive power to the model.
The two types of monetary policy are:
expansionary and contractionary
When the demand curve shifts to the left and all else is held constant, the equilibrium price ________ and the equilibrium quantity ________.
falls; falls
A cost-of-living adjustment clause:
forces an employer to increase wages at the same rate of inflation.
Opportunity cost is the ________ alternative forfeited when a choice is made.
highest-valued
Goods that are necessities are very likely to have:
highly inelastic demand.
Economics is the study of:
how to best allocate scarce resources to satisfy wants and needs.
Which of the following is the primary concept that economists use to explain how humans make decisions?
incentives
A progressive income tax system is one in which:
income tax rates increase as earned income increases.
Refer to the graph below. This society could reach point F when there is a(n):
increase in technology that makes pie bakers more efficient.
something is a normal good if the demand for the good:
increases as the consumer's income increases.
When the opportunity cost of producing a good rises as you produce more of it, you experience:
increasing relative costs.
Microeconomics is the study of:
individual decision-making units.
The area inside (within) the production possibilities frontier (PPF) contains ________ points.
inefficient
When the price increases by 30% and the quantity demanded drops by 10%, the price elasticity of demand is:
inelastic.
Nita is a devoted Coca-Cola consumer, whereas Becky can drink either Coca-Cola or Pepsi products. Nita's demand for Coca-Cola will be relatively more ________, while Becky's demand will be relatively more ________.
inelastic; elastic
A town on the Gulf Coast is battered by a massive hurricane that destroys most of its productive resources. The community's production possibilities frontier (PPF) would show an:
inward shift of the PPF.
A positive statement:
is a claim that can be tested.
A demand schedule:
is a table representing the relationship between the price of a good or service and the quantity demanded.
A model without any simplifying assumptions:
is highly complex and likely unworkable.
A society that is producing its maximum combination of goods and using all available resources for production:
is operating on its production possibilities frontier (PPF).
The ________ states that the opportunity cost of producing a good always rises as you produce more of it.
law of increasing relative cost
The government controls for many indirect incentives in safety net social programs by:
limiting payment to a specified time period.
When the economy falters, people often look to the government to help push the economy forward again. In fact, the government uses many different tools to try to affect the economy. Economists classify these tools on the basis of two different types of policy:
monetary policy and fiscal policy
Demand is almost always more price elastic in the long run because:
more options become available and people can make different choices.
The cost of a trade-off is known as the ________ cost of that decision.
opportunity
As you move from one efficient point on the production possibilities frontier (PPF) to another efficient point on the PPF, you experience:
opportunity cost.
The movie Saving Private Ryan is about a military mission to find and recover a particular soldier—Private Ryan. The movie is predominantly about how much was given up in an effort to save this one particular soldier. The main economic theme of the movie is:
opportunity cost.
Ceteris paribus means:
other things being equal.
An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an:
outward shift of the PPF.
An increase in the labor force would be reflected in a society's production possibilities frontier (PPF) by an:
outward shift of the PPF.
Economic growth can be depicted on a production possibilities frontier (PPF) as an:
outward shift of the PPF.
Which of the following is considered discretionary government spending?
payments to government employees
Which point in the corresponding figure shows that productive resources are NOT fully employed?
point A
Which point on the figure shows inefficient use of resources?
point A
Which allocation point in the short-run production possibilities frontier (PPF) will lead to the most significant growth in the long-run PPF?
point E
Which point in the corresponding figure represents a combination of smoothies and milk shakes that society cannot currently produce?
point E
Price elasticity of demand measures the change in:
quantity demanded due to the change in price.
hen the price of an hour of tutoring increases, the:
quantity demanded for tutoring decreases.
Economists believe that individuals compare the benefits and costs of various options when making a decision and in so doing act:
rationally.
Mandatory outlays:
require changes in existing laws if those outlays are to be altered.
Inputs are:
resources that firms use in the production of final goods and services.
A decrease in demand is represented by a:
shift of the demand curve to the left.
If the cost of flour increases from $3 to $5 a bag, you could predict the supply curve for bagels to:
shift to the left.
The opportunity cost to free trade is:
some domestic jobs.
Suppose that Alicia Keys and Jay-Z could each make either New York-style pizza or Philly cheesesteaks. Given an eight-hour workday, which of the following would permit them to consume outside their respective production possibilities frontiers (PPFs)?
specialization and trade
Excise taxes are levied on:
specific goods or commodities.
To determine the total impact on spending from an initial change of a given amount, you could use:
spending multiplier
According to the law of demand, all other things being equal:
the quantity demanded falls when the price rises, and the quantity demanded rises when the price falls.
The law of supply states that, all other things being equal:
the quantity supplied falls when the price falls, and the quantity supplied rises when the price rises.
On the television show MythBusters, the hosts design experiments, collect data, and test theories based on popular myths. This is an example of:
the scientific method as used in economics.
In the figure, point E is:
unattainable with current resources.
You have an absolute advantage in producing something whenever:
you can produce more of it than someone else can using the same quantity of resources.