Microeconomics Chap 1 - 5

42 An example of a U.S. export is

a washing machine made in Indiana sold to a buyer in France.

46 Production efficiency is represented by ________ a production possibilities frontier.

all points on

56 In the table above, how many jackets must Mary forgo for every dress she makes?

1 1/2 jackets

58 In the above table, for Mary the opportunity cost of producing a dress is ________ and the opportunity cost for Mark of producing a dress is ________.

1 1/2 jackets; 2/3 of a jacket

34 Most of the world's population lives in

developing economies.

2 Economics is the social science that studies

how people make choices to cope with scarcity.

26 Jan is attending college and studying to be an investment broker. To improve her chances of employment following college, she has interned at a top brokerage firm during the last two summers. Jan's internship has increased her

human capital.

25 The concept of human capital describes

human skills, that is, the quality of labor.

1 Scarcity exists because

human wants exceed the resources available to satisfy them.

9 The statement that "increases in the tax on gasoline increase the price of gasoline" is an example of a

positive statement.

30 Payments to the factors of production are

rent, wages, interest, and profit or loss.

48 The figure above shows the production possibilities frontier for a country. If the country is producing at point D, then the

resources are not being used efficiently and/or are unemployed.

45 Assume that an association of young workers has lobbied Congress to require that all workers retire once they reach the age of fifty. What impact would this law have on the nation's production possibilities frontier?

The production possibilities frontier would shift inward.

55 If Wendy can produce more of all goods than Tommy in an hour, then

Wendy has an absolute advantage in all goods.

11 A graph of the value of one variable against the value of another variable is known as a

scatter diagram.

4 Choices that are best for the individuals that make them are choices in pursuit of

self interest

12 A time series graph

shows how a variable changes over time.

28 Which of the following is NOT considered capital?

stocks and bonds that are sold by Pepsico

23 Which of the following is NOT considered one of the factors of production?

technology

44 When drawing a production possibilities frontier, which of the following is held constant?

the available factors of production and the state of technology

39 The total amount the federal government has borrowed to make expenditures that exceed tax revenue is called

the national debt.

24 As a factor of production, oil reserves are counted as

land

37 In the circular flow model, the factor markets are the markets in which

land, labor, capital, and entrepreneurship are bought and sold.

15 If x increases and as a result y decreases, then x and y are

negatively related.

49 The negative slope of the production possibilities frontier represents the idea

of tradeoffs, that in order to produce more of one good, the nation must produce less of another.

20 The Latin term "ceteris paribus" means

"other things remaining the same."

17 If the quantity of the variable on the y-axis increases by 10 when the quantity of the variable on the x-axis decreases by 2, then the slope of the curve equals

- 5.

18 The slope of the line shown in the above figure is

-1.25

22 What would be an example of capital good?

Antonio, the manager of the local Taco Hut, purchases a new deep fryer.

62 Deb and Pete have volunteered to help their favorite charity mail out fundraiser information. The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes. If Deb and Pete specialize and trade, how many packets will be assembled?

160

57 In the table above, how many jackets must Mark forgo for every dress he makes?

2/3 of a jacket

33 Approximately ________ people live in the United States and ________ people live in the world.

310 million; 7 billion

60 Deb and Pete have volunteered to help their favorite charity mail out fundraiser information. The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes. What is Deb's opportunity cost of assembling 1 packet?

4 envelopes

59 Deb and Pete have volunteered to help their favorite charity mail out fundraiser information. The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes. If Deb spends all her time assembling packets, how many can she assemble?

40

61 Deb and Pete have volunteered to help their favorite charity mail out fundraiser information. The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes. Which of the following statements is correct?

Deb has a comparative advantage in stuffing envelopes.

54 Incorrect Suppose India and France have the same PPF, shown in the figure above. Based on their current production points, which is India's most likely future PPF?

PPF2

10 A statement that "All children should receive free health care" is an example of what kind of statement?

a normative statement

21 Which of the following is a consumption good or service?

a personal computer purchased in order to play games at home

19 The figure above shows the relationship between the time a student spends studying and the student's GPA that semester. This figure shows ________ relationship between the time spent studying and the GPA

a positive but not linear

14 If the change in y = 10 and the change in x = 3, there is

a positive relationship between y and x.

8 An incentive is

a reward or a penalty that encourages or discourages an action.

43 The production possibilities frontier is the boundary between the

attainable and unattainable combinations of goods and services.

52 If the production possibilities frontier between two goods were a straight line, then the opportunity cost of one good in terms of another would be

constant.

47 The figure above shows the production possibilities frontier for a country. In order for it to produce at point E, the

country would need to acquire more resources and/or more advanced technology.

50 The opportunity cost of producing one more unit of a good is calculated by dividing the

decrease in the quantity of the other good by the increase in the quantity of the good whose opportunity cost we're calculating.

53 The sustained expansion of production possibilities is called

economic growth.

29 The productive resource that organizes labor, land, and capital is

entrepreneurship.

38 In the circular flow model with the government sector, transfers

flow in the opposite direction as do taxes.

35 The circular flow model is used to show the

flow of expenditures and incomes in the economy.

36 In the circular flow model, consumption goods are bought and sold in the

goods market.

41 Households and firms in the U.S. economy interact with those in the rest of the world in the ________ market and in the ________ market.

goods; financial

16 If a curve falls and then rises, it

has a minimum.

40 Which of the following are sources of revenue for state and local governments?i. property taxesii. sales taxes iii. transfers from the federal government

i, ii and iii

7 Mothers Against Drunk Drivers (MADD) campaigned to increase the legal penalties of drunk driving. This successful campaign ________ of drunk driving.

increased the marginal cost

51 A bowed out production possibilities frontier shows

increasing opportunity cost. and that resources are not equally productive in all uses.

32 The personal distribution of income in the United States shows that

the richest 20 percent of individuals receive approximately 50 percent of total income.

5 Choices that are best for the society as a whole are choices in pursuit of

the social interest.

27 Capital, as a factor of production, refers to

the tools and instruments used to produce other goods and services.

6 Opportunity Cost is best defined as

the value of the highest-valued alternative that is forgone in making a choice.

13 A steep slope in a time series graph means

the variable is rising or falling quickly.

31 The majority of the income earned in the United States is paid in

wages.

3 When Ford decides to increase production of hybrid cars, it directly answers the ________ question.

what