Econ HW multiple choice
gains from trade
people can get more of what they want through trade than they could if they tried to be self-sufficient number 8- chpt 2
Choose the correct statement.
A. Entrepreneurship includes the tools and instruments that we work with. B. Entrepreneurship is a service. C. Entrepreneurship decreases over time. D. Entrepreneurs make business decisions. Correct: D
By remaining in school, you are paying an opportunity cost that includes
A.the time you spend shopping for groceries B.the money you spend on clothes C.the free time you could have every evening to watch movies D.the money you spend on late- night snacks correct: c
Explain how the following headlines concern self-interest and the social interest: 1. Harrod's, a London department store, is opening branches in airports, and Taco Bell is expanding throughout Canada 2. Lottery tickets must state the odds of winning.
Harrod's and Taco Bell make decisions in their self-interest. Information on the odds of winning is in the social interest, but people decide whether to pay attention to them in their self-interest.
What makes the demand for some goods elastic and the demand for other goods inelastic? The fewer the substitutes for a good or service, the more ______ is the demand for it. The smaller the proportion of income spent on a good, the more ______ is the demand for it.
Inelastic; inelastic
If, as Johnny's income increases, his demand for filet mignon increases, then for Johnny, filet mignon is _______.
a normal good
Kim can produce 40 pies per hour or 400 cakes per hour. Liam can produce 100 pies per hour or 200 cakes per hour.
Kim's opportunity cost of producing a pie is 10 cakes. Liam's opportunity cost of producing a pie is 22 cakes. Liam has the comparative advantage in producing pies. Kim has the comparative advantage in producing cakes Kim spends 30 minutes producing pies and 30 minutes producing cakes, Kim produces 20 pies and 200 cakes. If Liam spends 30 minutes producing pies and 30 minutes producing cakes, Liam produces 50 pies and 100 cakes.
indicate whether each of the following news items is a positive or a normative statement. 1. The poor pay too much 2. Teenagers shouldn't be permitted to buy cigarettes 3. The United States should spend more on the environment and less on space exploration 4. More police on inner- city streets will lower the crime rate
Statement 1 is a normative statement, and statement 2 is a normative statement. Statement 3 is a normative statement, and statement 4 is a positive statement
Think about the following news items. Which items involve a microeconomic issue and which involve a macroeconomic issue? A. U.S. inflation expectations at highest level since 2015 B. WHO recommends tax of at least 20 % on sugary drinks C. U.S. economy adds 227,000 jobs in January D. The U.S. is borrowing less from China, more from everybody else
Statement A involves a macro issue. Statement B involves a micro issue Statement C involves a macro issue. Statement D involves a macro issue.
The night before an economicsan economics test, you decide to go to a club with friends instead of studying for your test You get 85 %on your test compared with the 90 % that you normally score.
You ______, and the opportunity cost of your evening at the clubat the club was ______. faced a tradeoff between a higher test score and an evening at the clubat the club; the 55 percent fall in your grade
The demand for plums is unit elastic if _____.
a 5 percent rise in the price of plums results in a 5 percent decrease in the quantity of plums demanded
Whether California Orchards Inc. gets a larger profit or its workers get higher wages is _______ question.
a for whom
When StarbucksStarbucks decides to produce coffee by using more capital and less labour, it is answering ______ question. When California Orchards Inc. decides to produce organic fruit rather than non- organic fruit, it is answering ______ question
a how; a what
What does the sign (positive/negative) of the income elasticity tell us about a good? A good with an income elasticity greater than one is ______. A good with an income elasticity that is positive and less than 1 is ______.
a normal good that is income elastic; a normal good that is income inelastic
An incentive is
a reward that encourages an action or a penalty that discourages an action
When your university chooses to spend more on football equipment and less on computer equipment, its choice illustrates
a tradeoff
Which of the following statements is a positive microeconomic statement?
a. Interest rates will rise as the economy expands. b. The price of an iPad will fall over the next year. c. Apple should lower the price of its iPad to discourage competitors from entering the market. d. Lower taxes might increase employment. correct: B
Which of the following is the opportunity cost of attending a ball game?
a. Only the things you would alternatively have done with your time if you had been working. b. Only the ticket price and bus fare. c. Only the things you would alternatively have done with your time. d. The things you would have bought with what you spent on the ticket and bus fare getting to the game plus the things you would alternatively have done with your time correct: d
Which of the following statements is a normative macroeconomic statement?
a. The U.S. government should increase unemployment benefits. b. More generous unemployment benefits will increase the unemployment rate. c. State governments should lower taxes on cigarettes. d. A decrease in cigarette taxes will encourage more people to smoke. Correct A
A rational choice is
a. achieves the greatest benefit over cost for the person making the choice b. will turn out to have been the best choice after the event C. is always the best choice for society D. has the lowest opportunity cost correct: a
SpaceX CEO Elon Musk announced that SpaceX plans to send two citizens on a one-week 350,000 mile trip around the moon in 2018. What is the opportunity cost of creating the technology for trips around the moon? The opportunity cost of creating the technology for trips around the moon is _______.
a. zero B. more trips to the moon in 2019 C. the decrease in the current production of other goods and services d. technological advances that can be used by other firms attempting similar space journeys correct: C
The production possibilities frontier is the boundary between the combinations of goods and services that _____, given the available factors of production and the state of technology.
an be produced and the combinations that cannot be produced
A good with an income elasticity that is negative is _______.
an inferior good
Points on the PPF
are attainable and efficient
Points outside the PPF
are unattainable
The marginal benefit of a good or service is the _____.
benefit received from consuming one more unit of it
Interest is the income paid for the use of _____.
capital
If the quantity demanded of meat pies decreases by 33 percent when the price of a meat pie rises by 100 percent, what is the price elasticity of demand for meat pies?
chpt 4 homework 3/100 = .03 inelastic
If the cross elasticity of demand for computers with respect to the price of a DVD is negative, then computers and DVDs are ______.
complements
An increase in the price of wood planks, a complement in production of saw dust, will ______ the equilibrium price of saw dust and ______ the equilibrium quantity of saw dust.
decrease; increase
Dairies make low-fat milk from full-cream milk, and in the process they produce cream, which is made into ice cream. Explain the effect of the following events on the supply of low-fat milk. If the wage rate of dairy workers rises, the supply of low-fat milk _______
decreases because the cost of producing low-fat milk increases
An increase in the price of pasta _______.
decreases the quantity of pasta demanded and results in a movement up along the demand curve for pasta
If the price of low-fat milk rises, the supply of low-fat milk _______. (Note this question asks about "supply" not "quantity supplied.")
does not change because the relationship between price and quantity supplied does not change
Capital accumulation and technological change bring economic growth: Production that was unattainable yesterday becomes attainable today; production that is unattainable today will become attainable tomorrow. Why doesn't economic growth bring an end to scarcity one day? This process of economic growth _______.
does not eliminate scarcity because we still must give up production of one good to increase production of a second good and remain on the new production possibilities frontier
How does the price elasticity of demand influence total revenue when a price cut occurs? If a price cut increases total revenue, demand is ______. If a price cut decreases total revenue, demand is ______
elastic; inelastic
When a surplus arises, the price ______ to its equilibrium, which _______.
falls; increases the quantity demanded and decreases the quantity supplied
land is the _____ that we use to produce goods and services.
gifts of nature or natural resources
Capital accumulation is the _____, including _____ capital.
growth of capital resources; human
Profit (or loss) is the _____ earned by an entrepreneur for running a business.
income
If the price of cream rises, the supply of low-fat milk ______
increases because cream and low-fat milk are complements in production
Why does the PPF bow outward and what does that imply about the relationship between opportunity cost and the quantity produced? The PPF bows outward because as we move from point A to point B to point C, the opportunity cost of producing a pair of cargo pantspair of cargo pants....
increases. Resources are not equally productive in all activities (look at number 3 on chpt 2 hw)
Human capital _____ that people obtain from education, on-the-job training, and work experience. _____ that have been produced in the past and that businesses now use to produce goods and services is capital.
is the knowledge and skill; Tools, instruments, machines, buildings, and other items
Resource use is efficient when
it is not possible to make someone better off without making someone else worse off
Wages are income paid for the services of _____.
labor
Rent is the income paid for the use of _____.
land
The resources that are used to produce goods and services - _____ are factors of production.
land, labor, capital, entrepreneurship
The supply of apples in the short run will be ______ than the supply in the long run and ______ than the momentary supply today.
less elastic; more elastic
A competitive market is a market that has _____, so _____ can influence the price.
many buyers and sellers; no single buyer or seller
the marginal benefit curve is a curve that shows the relationship between the _____.
marginal benefit from a good and the quantity consumed of that good
The marginal cost of a good or service is the _____
opportunity cost of producing one more unit of it
Preferences are _____
people's likes and dislikes and the intensity of those feelings
the price elasticity of demand is calculated by dividing the _______ by the _______.
percentage change in the quantity demanded; percentage change in the price
William loves candy bars. As the price of a candy bar increases from $1.00 to $1.25 to $1.50, William continues to buy a dozen candy bars every week. William's demand for candy bars is _______.
perfectly inelastic
What does the cross elasticity of demand measure? The cross elasticity of demand is a measure of the responsiveness of the demand for a good to a change in the ______, other things remaining the same.
price of a substitute or complement
An increase in the demand for computers together with a decrease in the supply of computers brings a ______ of computers at the original price and a ______ in their price.
shortage; rise
If the cross elasticity of demand for a donut with respect to the price of a chocolate chip cookie is positive, then donuts and chocolate chip cookies are ______
substitutes
Economic growth is defined as the _____ .
sustained expansion of production possibilities
comparative advantage
the ability to produce a good at a lower opportunity cost than another producer look at number 7 on chpt 2 hw
Technological change is _____ new goods and of _____ of producing goods and services.
the development of; of better ways
Why does demand not change when the price of a good changes with no change in the other influences on buying plans? Consider the demand for pasta The demand for pastapasta does not change when a change in _______ occurs.
the price of pasta
The price elasticity of demand is a units-free measure of the responsiveness of ______
the quantity demanded of a good to a change in its price when all other influences on buying plans remain the same
Demand is _____, when all other influences on buying plans remain the same.
the relationship between the quantity demanded of a good and the price of the good
If a price cut leaves total revenue unchanged, demand is _______.
unit elastic
If the quantity of dental services demanded increases by 10 percent when the price of dental services falls by 10 percent, is the demand for dental services inelastic, elastic, or unit elastic?
unit elastic
Allocative efficiency is a situation in which the quantities of goods and services produced are those that people _____ - it is not possible to produce more of a good or service _____ some of another good that people _____.
value most highly; without giving up; value more highly
We can't avoid having to make choices because
we don't have enough time to do all the things we'd like to do
All of the following are consequences of scarcity faced by people in the United States except deciding
whether or not Pluto should be classified a planet
The _____ that people devote to produce goods and services is labor.
work time, and work effort
Production efficiency is a situation in which the economy is getting all that it can from its resources and _____ produce more of one good or service without producing _____ of something else
cannot; less
When a shortage arises, the price ______ to its equilibrium, which _______.
rises; decreases the quantity demanded and increases the quantity supplied
