ECON 2301 - exam 1-- Giant Aryani
The economic way of thinking is best described as
an analytical framework enabling one to reach informed conclusions.
Specialization and comparative advantage
All of the above.
The primary purpose of economics is to understand how people make
Choices
Consider the following statement based on a positive economic analysis that assumes that all other things remain constant: Falling gasoline prices will result in additional vacation travel. Which of the following (initially assumed constant) could occur and thus offset the stated outcome?
An increase in hotel taxes at popular resorts.
Which of the following is a true statement about self-interest as used in the study of economics
Any action can be based on self-interest if the person has some reason for the action.
Which of the following statements concerning economic models is FALSE?
Economic models are based on pure fact and no assumptions.
Elizabeth can make 5 dozen cupcakes or 1 chocolate cake in one hour. Steven can make 3 dozen cupcakes or 1 chocolate cake in one hour. Based on this information, which of the following is a true statement
Elizabeth has a comparative in making cupcakes.
Which of the following statements about economic models is true
Every economic model is based on a set of assumptions.
Which of the following statements is true
Everyone can benefit when people specialize where they have a comparative advantage and then trade with each other.
Which of the following is the best example of scarcity?
Fred only gets a 1-hour lunch break and each day must decide between working out at the gym or socializing with his colleagues.
Suppose a government official is trying to decide whether or not to allow more immigration. Which of the following is not an aspect of the economic way of thinking that would apply in this decision-making process
Flipping a coin.
Why do most people choose to specialize in a narrow set of skills for their work, rather than to learn a little bit about several varied fields of endeavor?
It allows them to earn more income by being more productive.
Which of the following is always true of rational behavior
It always entails pursuing own's own best interest.
What is the type of mechanism that answers the basic economic questions through a decentralized decision making process?Market system
Market system
Steve can wash, fold, and iron a basket of laundry in two hours and prepare a meal in one hour. HisHis roommate MikeMike can wash, fold, and iron a basket of laundry in three hours and prepare a meal in one hour. The absolute advantage in laundry is held by The comparative advantage in meal preparation is held by
Steven mike
Which of the following is a normative economic statement
Teenage unemployment is too high
Which of the following statements about a movement along the production possibilities curve in the figure at right is FALSE
There are no opportunity costs involved in choosing one point on the curve over all other points.
The three fundamental economic questions that a nation addresses in order to allocate society's scarce resources include all of the following except:
Why will the items be produced
The threat of a large fine for failure to pay income taxes is an example of
a negative incentive to get all people to pay taxes.
Which of the following is NOT a factor of production?
a product
The basic economic problem is
a situation of limited resources and unlimited wants.
Consider the following statements, based on a positive economic analysis that assumes that all other things remain constant. For each, list one other thing that might change and thus offset the outcome stated. a. Increased demand for laptop computers will drive up their price. A. An improvement in computer manufacturing technology. Your answer is correct.B. An increase in consumer income. C. A decrease in the supply of laptop computers. b. Falling gasoline prices will result in additional vacation travel. A. The economy enters a recession with increased unemployment. Your answer is correct.B. Consumer incomes increase. C. The airlines engage in a price war that leads to lower airfares. c. A reduction of income tax rates will result in more people working. A. Lower interest rates lead to a boom in housing construction. B. Congress passes a huge appropriations bill leading to increased government spending. C. The foreign exchange value of the dollar increases causing domestic exports to decline.
a-a-c
One major assumption of economics is that people
act as if they systematically pursue selfminus−interest.
"Wants" as an economic concept includes
both material and nonmaterial desires.
Self-interest relates to
both monetary and nonmonetary objectives
Self-interest
can involve any action that makes a person feel better off, such as charitable contributions
Economists assume people behave rationally, which means that people
do not intentionally make decisions that make themselves worse off
According to economists, when two people make exactly the opposite decision
each person evaluates the situation according to his/her individual self-interest.
Economic goods are
goods that are scarce.
The rationality assumption implies that
individuals will not intentionally make decisions that leave them worse off.
A decision made by a rational person
is intended to make the person better off.
Canada goes to considerable lengths to protect its television program and magazine producers from U.S. competitors. The United States often seeks protection from food imports from Canada. From an economywide viewpoint, these efforts are
misguided because the enhanced output from specialization based upon comparative advantage is restricted
Consider the table below. The student's set of opportunities is now as follows Using your graph, does the PPC illustrate the law of increasing additional cost Using the data in the table above, the opportunity cost to this student for the additional amount of study time on economics required to move her grade from 60 to 70 is ........... biology points.
no
The ceteris paribus assumption means
other things equal
It has been noted that when the price of a good increases, people purchase less of the good. This is an example of
positive economic analysis.
To be useful, a model must
predict more accurately than other models that have been developed.
Farmer McDonald has 100 acres of land on which he can grow soybeans or corn. An acre of land yields 200 bushels of soybeans or 100 bushels of corn or some combination of both. The accompanying figure refers to farmer McDonald's
production possibilities curve.
Economists assume people behave
rationally
In economic, the concept that individuals are motivated by self-interest respond predictably to opportunities for gain is known as
rational self-interest.
Opportunity cost exists because of
scarcity.
Economic growth can be pictured in a production possibilities curve diagram by
shifting the production possibilities curve out.
Whenever productive resources are used to make capital goods
society is giving up current consumption.
The division of productive activities among persons and regions so that no one individual or region is totally self-sufficient is known as
specialization
One reason that economists use microeconomics as the basis of macroeconomic analysis is
that all choices are made by individuals and firms.
All of the following are aspects of microeconomics EXCEPT
the average level of prices of all goods and services produced in a country in a year.
An economic model is developed from a set of assumptions about consumer behavior and predicts that people will buy less of a good the higher the price of the good. Empirical testing of this model would involve
the collection of data to evaluate the usefulness of the model.
Some people claim that the "economic way of thinking" does not apply to issues such as health care. All of the following choices clearly demonstrate how economics applies to this issue, except when
the individual decides against health care as it may make him better off.
John and Mary work at a bakery. John can decorate either 10 ice-cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes.
the opportunity cost of decorating an ice-cream cake for John is 2/5 wedding cake.
Which of the following would be a topic of study in Which of the following would be a topic of study in macroeconomics
the output of the United states
People may appear to use rules of thumb, as suggested by the assumption of bounded rationality, even though they may really be behaving in a manner suggested by the rationality assumption if
they face persistently predictable range of choices for a period of time.
To which of the following household-type(s) does the phrase "unlimited wants LOADING... and limited resources LOADING... " apply
I, II, and III.