Econ Chp 1

Refer to the above table. The unemployment rate in 2012 was:

11% 200/1800 x 100

Refer to the table above. What is the opportunity cost of producing the first three units of capital goods?

15 units of consumer goods.

Which of the following statements correctly distinguishes capitalism from socialism?

Under capitalism, "how to produce" is determined by business people's desires to minimize cost and maximize profits; in socialism, it is determined to a much greater degree by government.

When an economy is at full employment and full production, more of any one product:

can be produced only if there is less production of some other products.

Which is a factor of production?

capital

The term scarcity in economics refers to the fact that:

no country can produce enough products to satisfy everybody's economic wants.

The process of developing hypotheses, testing them against facts, and using the results to construct theories is called:

the scientific method.

An "aggregate:"

treats a collection of specific units as one unit.

The marginal cost curve for a product slopes upward as more units are produced because of the law of increasing cost.

true

The utility of a specific product:

varies from person to person using the product.

The price ratio of the two products is the:

slope of the budget line.

Microeconomics focuses on:

the individual units that make up the whole of the economy.

Refer to the above table. The marginal opportunity cost of the third unit of steel is:

20 units of wheat

Refer to the above table. The marginal opportunity cost of the fourth unit of tanks is:

300

Refer to the above table. The total opportunity cost of the three units of tanks is:

350 units of autos.

If a consumer has an income of $200, the price of X is $5, and the price of Y is $10, the maximum quantity of X the consumer is able to purchase is:

40

Refer to the above table. The total opportunity cost of the three units of steel is:

45 units of wheat.

Refer to the table above. What is the opportunity cost of producing the third unit of capital goods?

6 units of consumer goods

Refer to the table above. What is the opportunity cost of producing the first two units of capital goods?

9 units of consumer goods

Refer to the above graph. Assume that before the Persian Gulf War, Iraq's production possibilities were represented by AB. Which line on the above graph would represent the change in Iraq's production possibilities after the war?

AB to EF

The following are important problems associated with the public debt, except:

Government borrowing to finance the debt may lead to too much private investment.

In the graph above, A is the initial budget line and B is the new budget line. Which of the following changes might have occurred?

P1 decreased, P2 increased, income was unchanged

Which of the following is a correct statement?

The laboratory for economists is the real world (people) making it difficult to develop generalizations and laws that apply to all in every situation.

The alternative combinations of two goods which a consumer can purchase with a given money income is:

a budget line.

Which would not be considered as capital (or an economic resource) by an economist?

a share of corporate stock issued by General Motors

Money is not considered to be an economic resource because:

as such it is not productive.

Refer to the above production possibilities curve. Curve (a) is the current curve for the economy. Given production possibilities curve (a), point N suggests that the economy is:

attaining both full employment and full production.

From an economic perspective, when a student decides to attend another year of college, the student has concluded that the marginal:

benefits of attending college are greater than the marginal costs.

In the diagram above, Cheri's budget line shifts outward from AB to CD. Which statement below is consistent with this shift?

both prices are reduced by 5o percent; her income is reduced by less than 50 percent.

Decreases in the price of a product causes the consumer's:

budget line to shift outward from the origin.

To fight a recession, Congress and the President could:

decrease taxes to increase aggregate demand

Economic resources in the capitalist system are brought together by:

entrepreneurs

By using the same ceteris paribus assumptions, economic principles are just as certain and precise as those of the laboratory sciences

false

As a result of a new free trade agreement that shifts comparative advantages, Company A closes its plant in the U.S., lays off 500 workers and opens a new plant in Myanmar where wages are very low. This decision:

has nothing to do with ethics since this is purely business decision.

If the Fed raises the interest rate, this will ________ inflation and ________ real GDP in the short run.

increase; lower

Given the production possibilities schedule above, a combination of three tanks and 35o autos:

is attainable but involves the unemployment or inefficient use of some of society's resources.

A reduction in the level of unemployment would have which effect with respect to the nation's production possibilities curve?

it would not shift the curve; it would be represented by moving from a point inside the curve toward the curve.

When society overallocates resources to the production of a product it means that the:

marginal benefit is less than the marginal cost

The overallocation of resources by society to the production of a product means that the:

marginal cost is greater than the marginal benefit.

The study of how one business firm sets its prices would fall under the study of:

microeconomics

When a state government chooses to build more roads, the required resources are no longer available for spending on public education. This dilemma illustrates the concept of:

opportunity cost.

Economic models do not reflect the full complexity of reality and instead are based on:

purposeful simplifications.

If an economy is producing at a point inside a production possibilities curve:

resources are unemployed

The purpose of the ceteris paribus assumption used in economic analysis is to:

restrict the analysis to the effect of a single economic factor.

Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to:

shift outward or to the right.