Econ 2301 Final

What do economists mean when they use the Latin expression ceteris paribus​? A. All else equal. B. Prior to an event C. The whole is just the sum of the parts. D. The thing speaks for itself.

A. All else equal.

Every society faces​ trade-offs because we live in a world of scarcity. Suppose a​ student-athlete has the opportunity to earn ​$800,000 next year playing for a minor league baseball​ team, ​$700,000 next year playing for a European professional football​ team, or​ $0 returning to college for another year. Part 2 The opportunity cost of the​ student-athlete returning to college next year is ​$__________________ ​(Enter your response as an​ integer.)

800,000

In a paper written by Bentley College economists Patricia M. Flynn and Michael A.​ Quinn, the authors​ state: ​"We find evidence that EconomicsLOADING... is a good choice of major for those aspiring to become a CEO​ [chief executive​ officer]. When adjusting for size of the pool of​ graduates, those with undergraduate degrees in Economics are shown to have had a greater likelihood of becoming an​ S&P 500 CEO than any other​ major." A list of famous economics majors published by Marietta College includes business leaders Warren​ Buffet, Donald​ Trump, Ted​ Turner, and Sam​ Walton, as well as former presidents George H.W.​ Bush, Gerald​ Ford, and Ronald Reagan. ​Sources: Patricia M. Flynn and Michael A.​ Quinn, "Economics: A Good Choice of Major for Future​ CEOs," Social Science Research Network​, November​ 28, 2006; and Famous Economics Majors​, Marietta​ College, Marietta​ Ohio, May​ 15, 2012. Why might studying economics be particularly good preparation for being the top manager of a corporation or a leader in​ government? Part 2 A. Economics teaches us how to look at the tradeoffs involved in every decision. B. Economics is less of an issue as you climb the corporate ladder because you usually hire accountants to handle your money. C. Management and politics have more to do with public relations than economics. D. Economics is just as valuable to a cashier as it is for a CEO.

A. Economics teaches us how to look at the tradeoffs involved in every decision.

Which of the following statements is​ correct? A. The relationship between two variables is linear when it is represented by a straight line and nonlinear when it is represented by a curved line. B. The relationship between two variables is nonlinear whether it is represented by a straight line or by a curved line. C. The relationship between two variables is linear whether it is represented by a straight line or by a curved line. D. The relationship between two variables is linear when it is represented by a curved line and nonlinear when it is represented by a straight line.

A. The relationship between two variables is linear when it is represented by a straight line and nonlinear when it is represented by a curved line.

Market price is determined by A. both supply and demand. B. supply only. C. demand only. D. neither supply nor demand.

A. both supply and demand.

In economic​ terminology, the inputs used to make goods and services are referred to as A. factors of production. B. real output. C. durables and nondurables. D. intangibles.

A. factors of production.

Equity is A. the fair distribution of economic benefits. B. when poorer​ people's income is growing more rapidly than more wealthy​ people's income. C. always achieved by the market. D. an exactly equal distribution of income.

A. the fair distribution of economic benefits.

Property rights are A. the rights individuals or firms have to the exclusive use of their​ property, including the right to buy or sell it. B. the rights government has to the exclusive use of all​ property, including the right to buy or sell it. C. the rights individuals or firms have to the exclusive use of their​ property, excluding the right to buy or sell it. D. the rights individuals or firms have to the exclusive use of their property within individual culturally defined norms which are inconsistent in each area of the United States.

A. the rights individuals or firms have to the exclusive use of their​ property, including the right to buy or sell it.

We can show economic​ efficiency: A. with points on the production possibilities frontier. B. with points inside and on the production possibilities frontier. C. with points outside the production possibilities frontier. D. with points on and outside the production possibilities frontier. E. with points inside the production possibilities frontier.

A. with points on the production possibilities frontier.

A perfectly competitive market is a market that meets the conditions of A. ​(1) many buyers and​ sellers, (2) all firms selling identical​ products, and​ (3) no barriers to new firms entering the market. B. ​(1) many buyers and​ sellers, (2) all firms selling differentiated​ products, and​ (3) no barriers to new firms entering the market. C. ​(1) few buyers and​ sellers, (2) all firms selling identical​ products, and​ (3) no barriers to new firms entering the market. D. ​(1) many buyers and​ sellers, (2) all firms selling identical​ products, and​ (3) significant barriers to new firms entering the market.

A. ​(1) many buyers and​ sellers, (2) all firms selling identical​ products, and​ (3) no barriers to new firms entering the market.

The Toyota Prius is a​ gasoline-electric hybrid car that gets 54 miles to the gallon. An article in the Wall Street Journal notes that sales of the Prius have been hurt by low gasoline prices and​ that: "Americans are now more likely to trade in a hybrid or an electric vehicle for an​ SUV...." Does the article indicate that​ gasoline-powered cars and gasoline are substitutes or​ complements? Briefly explain. A. ​Complements, because they are used together. B. ​Substitutes, because the more consumers buy of one​ good, the more they will buy of the other good. C. ​Complements, because they are used for the same purpose. D. ​Substitutes, because the more consumers buy of one​ good, the less they will buy of the other good.

A. ​Complements, because they are used together.

Which of the following best describes​ scarcity? A. Prices of goods are very high. B. Unlimited wants exceed the limited resources available. C. Wants cannot be fulfilled and thus all goods must be rationed. D. Markets cannot properly allocate resources.

B. Unlimited wants exceed the limited resources available.

Allocative efficiency means that A. every good or service is distributed fairly. B. every good or service is produced up to the point where marginal benefit is equal to marginal cost. C. a good or service is produced as quickly as possible. D. a good or service is produced at the lowest possible cost.

B. every good or service is produced up to the point where marginal benefit is equal to marginal cost.

In​ economics, the term capital refers to A. the process of raising funds from venture capitalists. B. physical capital, such as machinery, that is used to produce other goods. C. financial resources used by businesses to hire resources. D. the difference between a​ firm's assets and its liabilities.

B. physical capital, such as machinery, that is used to produce other goods.

A production possibilities​ frontier: A. shows the act of buying and selling. B. shows the maximum attainable combinations of two goods that may be produced with available resources. C. shows how participants in the market are linked. D. shows how unlimited wants exceed the limited resources available to fulfill those wants. E. shows the market for a good or service.

B. shows the maximum attainable combinations of two goods that may be produced with available resources.

Opportunity cost is A. the idea that because of​ scarcity, producing more of one good or service means producing less of another good or service. B. the highest valued alternative that must be given up to engage in an activity. C. when unlimited wants exceed the limited resources available to fulfill those wants. D. when consumers and firms use all available information as they act to achieve their goals.

B. the highest valued alternative that must be given up to engage in an activity.

The law of demand is the assertion that A. the quantity demanded of a product is directly related to its price. B. the quantity demanded of a product is inversely related to its price. C. changes in price and changes in quantity demanded move in the same direction. D. the demand for a product is negatively related to its price.

B. the quantity demanded of a product is inversely related to its price.

What are private property​ rights? Private property rights​ are: A. the rights individuals but not firms have to the exclusive use of​ tangible, physical property and intellectual property. B. the rights individuals and firms have to the exclusive use of​ tangible, physical property and intellectual property. C. the rights individuals and firms have to the exclusive use of​ tangible, physical property but not intellectual property. D. the rights individuals have to the exclusive use of intellectual property and firms have to the exclusive use of​ tangible, physical property. E. the rights individuals and firms have to the exclusive use of intellectual property but not​ tangible, physical property.

B. the rights individuals and firms have to the exclusive use of​ tangible, physical property and intellectual property.

An increase in the price of a product causes a decrease in quantity demanded because of the income and substitution effects. More​ specifically, A. the substitution effect is the decrease in quantity demanded because the​ consumers' purchasing power is reduced and the income effect is the decrease in quantity demanded owing to the fact that the product is more expensive relative to other goods. B. the substitution effect is the decrease in quantity demanded because the product is more expensive relative to other goods and the income effect is the decrease in quantity demanded owing to the decline in​ consumers' purchasing power. C. the substitution effect is the decrease in quantity demanded because consumer tastes have changed and the income effect is the decrease in quantity demanded because consumer incomes have fallen. D. the substitution effect is the decrease in quantity demanded because there are fewer consumers and the income effect is the decrease in quantity demanded because consumer incomes failed to increase.

B. the substitution effect is the decrease in quantity demanded because the product is more expensive relative to other goods and the income effect is the decrease in quantity demanded owing to the decline in​ consumers' purchasing power.

Does it indicate that​ gasoline-powered cars and hybrids are substitutes or​ complements? A. ​Complements, because they are used together. B. ​Substitutes, because the more consumers buy of one​ good, the less they will buy of the other good. C. ​Substitutes, because the more consumers buy of one​ good, the more they will buy of the other good. D. ​Complements, because they are used for the same purpose.

B. ​Substitutes, because the more consumers buy of one​ good, the less they will buy of the other good.

What do economists mean when they use the Latin expression ceteris paribus​? A. Prior to an event B. The whole is just the sum of the parts. C. All else equal. D. The thing speaks for itself.

C. All else equal.

A primary difference between macroeconomics and microeconomics is A. Microeconomics is concerned with present decisions while macroeconomics is concerned with future decisions. B. Microeconomics is concerned with market economies while macroeconomics is concerned with​ centrally-planned economies. C. Microeconomics examines individual markets while macroeconomics examines the economy as a whole. D. There are no true differences between microeconomics and macroeconomics.

C. Microeconomics examines individual markets while macroeconomics examines the economy as a whole.

Scarcity is central to the study of economics because it implies that A. wants are unlimited. B. society must make decisions at the margin. C. economic agents are rational. D. every choice involves an opportunity cost.

D. every choice involves an opportunity cost.

What is comparative​ advantage? Part 4 A. The gain from selling a product for more than it costs to produce that product. B. The ability to produce more of a good or service than competitors using the same amount of resources. C. The ability to produce a good or service at a lower opportunity cost than other producers. D. The ability to use all available resources to produce output. E. The gain from consuming a product whose benefit is greater than its cost.

C. The ability to produce a good or service at a lower opportunity cost than other producers.

The three economic questions that every society must answer are A. What kind of government will the society​ have, how will it be​ run, and who will run​ it? B. What are the prices of​ goods, how are they​ determined, and who will pay for​ them? C. What goods will be​ produced, how will they be​ produced, and who will receive the​ goods? D. What economic system will be​ used, how will it be​ implemented, and who will make market​ decisions?

C. What goods will be​ produced, how will they be​ produced, and who will receive the​ goods?

Productive efficiency means that A. a good or service is produced as quickly as possible. B. every good or service is distributed fairly. C. a good or service is produced at the lowest possible cost. D. every good or service is produced up to the point where marginal benefit is equal to marginal cost.

C. a good or service is produced at the lowest possible cost.

The production possibilities frontier will shift outward Part 8 A. if resources are used to produce consumption goods. B. if production occurs outside the production possibilities frontier. C. if resources are used to produce capital goods. D. if resources are not used in production. E. if technology declines.

C. if resources are used to produce capital goods.

Whether carried out by an individual or a​ country, production beyond the production possibilities frontier A. is possible only through trade. B. happens as a result of forced saving. C. is not physically possible. D. can occur by acquiring more productive resources.

C. is not physically possible.

The distinction between substitutes and complements is A. when income​ increases, demand for a substitute good increases while demand for a complementary good falls. B. when income​ increases, demand for a complementary good decreases while demand for a substitute good increases. C. substitute goods are used for the same purposes while complementary goods are used together. D. substitute goods are used together while complementary goods are used for the same purposes.

C. substitute goods are used for the same purposes while complementary goods are used together.

We can show economic​ inefficiency: A. with points on the production possibilities frontier. B. with points outside the production possibilities frontier. C. with points inside the production possibilities frontier. D. with points inside and on the production possibilities frontier. E. with points on and outside the production possibilities frontier.

C. with points inside the production possibilities frontier.

With respect to​ consumption, individuals and countries A. ​can, by choosing not to save for the​ future, consume beyond their production possibilities frontiers. B. are contrained to consume on or inside their production possibilities frontiers. C. ​can, through​ trade, consume beyond their production possibilities frontiers. D. can consume beyond their production possibilities frontiers only during periods of economic prosperity.

C. ​can, through​ trade, consume beyond their production possibilities frontiers.

From the list​ below, select the variable that will cause the demand curve to​ shift: A. The cost of raw materials B. The number of firms in the market C. Technology and productivity D. Consumer income

D. Consumer income

What does increasing marginal opportunity costs​ mean? A. Increasing the production of a good requires decreases in the production of another good. B. The economy is unable to produce increasing quantities of goods and services. C. Production is not occurring on the production possibilities frontier. D. Increasing the production of a good requires larger and larger decreases in the production of another good. E. Increasing the production of a good requires smaller and smaller decreases in the production of another good.

D. Increasing the production of a good requires larger and larger decreases in the production of another good.

What is absolute​ advantage? A. The gain from selling a product for more than it costs to produce that product. B. The ability to produce a good or service at a lower opportunity cost than other producers. C. The ability to use all available resources to produce output. D. The ability to produce more of a good or service than competitors using the same amount of resources. E. The gain from consuming a product whose benefit is greater than its cost.

D. The ability to produce more of a good or service than competitors using the same amount of resources.

From the list​ below, select the variable that will cause the supply curve to​ shift: A. Consumer income B. Population and demographics C. Prices of related goods D. The cost of raw materials

D. The cost of raw materials

When economists speak of a surplus​, they mean a situation in which A. the quantity supplied exceeds quantity demanded. B. the market price is above the equilibrium price. C.firms have unsold goods piling up. nothing nothing firms have unsold goods piling up. D. all of the above. E. A and B only.

D. all of the above.

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when A. marginal benefit is maximized. B. marginal benefit is greater than marginal cost. C. marginal cost is zero. D. marginal benefit equals marginal cost.

D. marginal benefit equals marginal cost.

The distinction between a normal and an inferior good is A. when income​ increases, demand for a normal good decreases while demand for an inferior good increases. B. normal goods are used together while inferior goods are used for the same purposes. C. normal goods are used for the same purposes while inferior goods are used together. D. when income​ increases, demand for a normal good increases while demand for an inferior good falls.

D. when income​ increases, demand for a normal good increases while demand for an inferior good falls.

Is it possible for a country to have a comparative advantage in producing a good without also having an absolute​ advantage? A country without an absolute advantage in producing a good A. will not have a comparative advantage because it has fewer resources. B. will have a comparative advantage if it devotes more resources toward that​ good's production. C. will have a comparative advantage if it produces more efficiently. D. will have a comparative advantage if it has a lower opportunity cost of producing that good. E. will have a comparative advantage if it is able to produce that good at a low total cost.

D. will have a comparative advantage if it has a lower opportunity cost of producing that good.

What role do they play in the working of a market​ system? Private property​ rights: A. encourage a significant number of people to be willing to risk funds by investing them in business. B. encourage firms to spend money on research and development. C. are the basis for international trade. D. determine what goods and services will be produced. E. both a and b.

E. both a and b.

What are the implications of this idea for the shape of the production possibilities​ frontier? A. The production possibilities frontier will be bowed inward. B. The production possibilities frontier will have a negative slope. C. The production possibilities frontier will have a positive slope. D. The production possibilities frontier will be a straight line. E. The production possibilities frontier will be bowed outward.

E. The production possibilities frontier will be bowed outward.

Why are independent courts important for a​ well-functioning economy? Independence is necessary for​ courts: A. to make their decisions free of influence from other parts of the government. B. to make their decisions free of intimidation by criminal gangs. C. to make their decisions free of influence from people with powerful political connections. D. to make their decisions based on the law. E. all of the above.

E. all of the above.

See Question 38

See Question 38

See Question 39

See Question 39

See Question 40

See Question 40

______________ is the study of the choices people make to attain their​ goals, given their scarce resources.

Economics

Centrally planned economies allocate resources based on decisions by _______________,while market economies answer these questions through decisions made by __________ ____ _______

Government Households and firms

See question 12 on Review

See question 12 on Review

See question 13 on Review

See question 13 on Review

Efficiency means that goods are distributed in a way that _________________ _____________ __ ___________​, while equity means that goods are distributed in a way that ________________

Maximizes benefits to society is fair

See Question 17

See Question 17

See Question 18

See Question 18

See Question 29

See Question 29

See Question 35 On the diagram to the​ right, a movement from A to B represents a A. change in supply. B. change in quantity supplied. C. decrease in supply. D. movement down the supply curve.

See Question 35 B. change in quantity supplied.

See Question 36

See Question 36