Econ Lesson One ALL HW QUESTIONS

Consider the following scenario to answer the questions that follow: 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 loaf of bread?

1 pie

Greater investment in capital goods today leads to

Greater investment in capital goods today leads to

Which of the following is a positive statement?

Increases in the minimum wage cause unemployment

Which of the following is a positive statement?

On average, people save 15% when they switch to GEICO

Which of the following is NOT an assumption that economists make when developing a production possibilities frontier (PPF)?

Society will always be producing somewhere on the PPF

The important act of holding all other variables constant while examining a particular variable is known as:

The important act of holding all other variables constant while examining a particular variable is known as:

A change in which of the following will cause a change in the quantity demanded of coffee?

The price of coffe

Which of the following is a positive statement?

The unemployment rate is 8%.

Which of the following is a normative statement?

Winters in Arkansas are too cold

Which of the following would NOT lead to an outward shift of a future production possibilities frontier (PPF)?

a decline in life expectancy

Where would you plot unemployment on a production possibilities frontier?

a point inside the PPF

A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

a production possibilities frontier (PPF)

What would we have to assume before constructing a society's production possibilities frontier?

a. That the quantity of resources remains constant. b. That the technology available for use in production remains constant. Correct c. Both answer choices are true.

Economists use the scientific method and the tools of economics to study:

anything around them; the world is the economist's laboratory.

Opportunity cost is evident on the production possibilities frontier (PPF) graph

as you move from one point on the frontier to another point on the frontier

Which of the following is necessary to build a good economic model?

assumptions

What is chosen over all other alternatives is the opportunity ____________.

benefit

Goods that are produced now so that they can be used to produce other goods in the future are called

capital goods

Goods that are produced for current consumption are called:

consumer goods.

The best alternative foregone is called the opportunity ___________.

cost

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:

decreasing the production of the second good.

If Mr. Waldon decides to ride the bus to school instead of driving his Ferrari, the opportunity cost of his decision is:

driving the Ferrari

Think of the production possibilities frontier (PPF) model. When society is producing the largest possible output from its resources, it is operating:

efficiently

Variables that are controlled for in a model are called

endogenous factors.

Greater investment in capital goods today leads to:

greater growth in the production possibilities frontier (PPF) in the future.

The area inside (within) the production possibilities frontier (PPF) contains

inefficient points.

Over the last 20 years, countries such as India and China have:

invested heavily and enjoyed significant economic growth

The process of using current resources to create new capital is:

investment

Forgoing current consumption so that those resources can be used to produce new capital is called:

investment.

At full employment, a society produces:

on its PPF.

Economists use the concept of ceteris paribus to examine a change in ____________ in a model, while assuming that all other variables remain constant.

one variable

As you move from one efficient point on the production possibilities frontier (PPF) to another efficient point on the PPF, you experience

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

Economic growth can be depicted on a production possibilities frontier (PPF) as an:

outward shift of the PPF.

"The unemployment rate is 5%" is a _________________ statement

positive

Economic growth is represented on a production possibilities frontier (PPF) by the PPF:

shifting outward.

Believe it or not...Staples was selling the iPhone 5S for $0.01 last year. My wife needed a phone and ended up buying one for me and one for my daughter and another one for my son. This is an example of:

the income effect

:An economist's use of experiments and real-world data to test a theory is an example of:

the scientific method in economics

A normative statement cannot be proven with facts, it is largely opinion.

true