Micro Quiz Questions

Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. Refer to Table 3-25. The opportunity cost of 1 toaster for Miguel is

1/2 mixer

Refer to Figure 3-17. Suppose Maxine decides to increase her production of tarts by 5. What is the opportunity cost of this decision?

10 pies

Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point H is

120 blankets

Refer to Table 3-40. Germany should specialize in the production of

cars and import boats

Refer to Table 3-32 The US has a comparative advantage in the production of

cheese

Refer to Figure 3-25. Colombia should specialize in the production of

coffee and import soybeans

Refer to Figure 2-6. The opportunity cost of this economy moving from point K to point H is

zero

Refer to Figure 2-5. The opportunity cost of this economy moving from point A to point B is

20 dryers

Refer to Figure 2-7. What is the opportunity cost of moving from point L to point M?

20 engines

Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day. Refer to Table 3-21. Suppose Jamaica decides to increase its production of radios by 12. What is the opportunity cost of this decision?

24 coolers

Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of increasing the production of corn from 400 bushels to 800 bushels?

400 bushels of wheat

Refer to Figure 2-4. Efficient production is represented by which point(s)?

R,U

Refer to Figure 2-7. Unemployment could cause this economy to produce at which point(s)?

N,O,P

Refer to Figure 2-5. The opportunity cost of obtaining 40 additional dryers by moving from point D to point C is

None of the above; the economy cannot move from point D to point C

economic models are built with

assumptions

Refer to Figure 3-16. Hosne has an absolute advantage in the production of

both goods and Merve has an absolute advantage in the production of neither good

economic models

can be useful, even if they are not particularly realistic

Economics is the study of how society allocates its unlimited resources.

false

Refer to Table 3-32 The opportunity costs for the US and France are as follows:

in the US 1 million gallons of wine costs 2 million pounds of cheese and in France 1 million gallons of wine costs 1/2 pounds of cheese

Economists build economic models by

making assumptions

A rational decision maker takes an action only if the

marginal benefit is greater than the marginal cost

Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. Refer to Table 3-25. Maya should specialize in the production of

mixers and miguel should specialize in the production of toasters

Suppose that you have received $300 as a birthday gift. You can spend it today or you can put the money in a bank account for a year and earn 5 percent interest. The opportunity cost of spending the money today, in terms of what you could have after one year, is

$315

Consider Frank's decision to go to college. If he goes to college, he will spend $21,000 on tuition, $11,000 on room and board, and $1,800 on books. If he does not go to college, he will earn $16,000 working in a store and spend $7,200 on room and board. Frank's total cost of going to college is

$42,600

Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. Refer to Table 3-25. The opportunity cost of 1 mixer for Maya is

1.6 toasters

Refer to Figure 3-16. If Hosne and Merve switch from each person dividing her time equally between the production of purses and wallets to each person spending all of her time producing the good in which she has a comparative advantage, then total production of purses will increase by

3

Refer to Table 3-33 Chris and Tony both produce tomatoes and pasta sauce. The table shows their possible production per month if both work the same number of 8 hour days. Given this information, Chris's opportunity cost of 1 lb. of tomatoes is

30 jars of sauce and Tony's opportunity cost of 1 lb of tomatoes is 20 jars of sauce

Refer to Figure 2-16. The opportunity cost of obtaining 30 additional gadgets by moving from point B to point A is

30 widgets

Refer to Figure 2-16. The opportunity cost of obtaining approximately 10 additional gadgets by moving from point C to point A is

30 widgets

Refer to Table 2-3. What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

300 socks

Refer to Figure 2-7. If this economy devotes all of its resources to the production of engines, then it will produce

40 engines and 0 tvs

Refer to Figure 3-16. Hosne's opportunity cost of one wallet is

5/4 purses and Merve's opportunity cost of one wallet is 2/3 purse

Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day. Refer to Table 3-21. Assume that Jamaica and Norway each has 4 days available for production. Originally, each country divided its time equally between the production of coolers and radios. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output of radios increased by

6

Refer to Figure 3-17. Suppose Daisy is willing to trade 3/4 tart to Maxine for each pie that Maxine makes and sends to Daisy. Which of the following combinations of pies and tarts could Maxine not then consume, assuming Maxine specializes in making pies and Daisy specializes in making tarts?

6 pies and 5 tarts

Refer to Figure 3-17. If Maxine and Daisy switch from each person dividing her time equally between the production of pies and tarts to each person spending all of her time producing the good in which she has a comparative advantage, then total production of tarts will increase by

7

The famous observation that households and firms interacting in markets act as if they are guided by an "invisible hand" that leads them to desirable market outcomes comes from whose 1776 book?

Adam Smith

Refer to Figure 2-4. At which point is this economy producing its maximum possible quantity of doors?

U

If the United States decides to trade with Yemen, we know that

Yemen and the US can both benefit

Rick buys a 1966 Mustang for $3,000, planning to restore and sell the car. He goes on to spend $9,000 restoring the car. At this point he can sell the car for $10,000. As an alternative, he can spend an additional $3,000 replacing the engine. With a new engine the car would sell for $13,000. Rick should

be indifferent between (i) selling the car now and (ii) replacing the engine then selling it

Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Based on the values in the table, the production possibilities frontier is

bowed outward indicating increasing opportunity costs

goods produced abroad and sold domestically are called

imports

Both Dave and Caroline produce sweaters and socks. If Dave's opportunity cost of 1 sweater is 3 socks and Caroline's opportunity cost of 1 sweater is 5 socks, then

dave has a comparative advantage in the production of sweaters

The invisible hand ensures that economic prosperity is distributed equally.

false

DeShawn has spent $600 purchasing and repairing an old fishing boat, which he expects to sell for $900 once the repairs are complete. DeShawn discovers that, in addition to the $600 he has already spent, he needs to make an additional repair, which will cost another $400, in order to make the boat worth $900 to potential buyers. He can sell the boat as it is now for $400. What should he do?

he should complete the repairs and sell the boat for $900

Lawrence is a photographer. He has $230 to spend and wants to buy either a flash for his camera or a new tripod. Both the flash and tripod cost $230, so he can only buy one. This illustrates the principle that

people face trade-offs

The phrase "no such thing as a free lunch" means

people must face tradeoffs

A tax on gasoline encourages people to drive smaller, more fuel-efficient cars. Which principle of economics does this illustrate?

people respond to incentives

The "invisible hand" directs economic activity through

prices

Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day. Refer to Table 3-21. Jamaica should specialize in the production of

radios and Norway should specialize in the production of coolers

Katie is planning to sell her house, and she is considering making two upgrades to the house before listing it for sale. Replacing the carpeting will cost her $2,500 and replacing the roof will cost her $9,000. Katie expects the new carpeting to increase the value of her house by $3,000 and the new roof to increase the value of her house by $7,000.

she should replace the carpeting but not replace the roof.

The production possibilities frontier is a graph that shows the various combinations of output that an economy can possibly produce given the available factors of production and

the available production technology

After much consideration, you have chosen Cancun over Ft. Lauderdale as your Spring Break destination this year. However, Spring Break is still months away, and you may reverse this decision. Which of the following events would prompt you to reverse this decision?

the marginal cost of going to Ft. Lauderdale decreases

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

the nation is not using all available resources or is using inferior technology or both

Refer to Figure 2-16. Suppose this economy is producing at point B. Which of the following statements would best explain this situation?

there is widespread unemployment in the economy

Refer to Table 3-33 Chris and Tony both produce tomatoes and pasta sauce. The table shows their possible production per month if both work the same number of 8 hour days. Which of the following statements is correct

tony has an absolute advantage in the production of tomatoes

A rational decision maker takes an action if and only if the marginal benefit exceeds the marginal cost.

true

Choosing not to attend a concert so that you can study for your exam is an example of a tradeoff.

true

The opportunity cost of working out for one hour is the value of the next-best activity that you could have done in that hour.​

true

A society allocates its scarce resources to various uses. These scarce resources include

water, machines, land