Microeconomics test 1
the bowed-out shape of the production possibilities frontier can be explained by the fact that
the opportunity cost of one good in terms of the other depends on how much of each good the economy is producing
if an economy is producing efficiently, then
there is no way to produce more of one good without producing less of another good
scarcity means that there is less of a good or resource available than people wish to have
true
opportunity cost of 1 lbs of potatoes for the farmer
1/4 lbs of meat
ref table 2-1 what is the opportunity cost of toyland of increasing the production of dolls from 200 to 300
150 fire trucks (find the diff of the 2 points)
opportunity cost of 1 lbs of meat for the rancher is
4/5 lbs of potatoes
table 3-1 the opportunity cost of 1 pound of meat for the farmers is
4lbs ( meat: ___ potatoes, ________meat/ meat total )
opportunity cost of 1lbs of potatoes for the rancher is
5/4 lbs of meat
ref to figure 2-1 Juan buys a new pair of shoes at a shoe store. To which of the arrows does this purchase directly contribute
A & B - both top rows
ref to figure 2-1 which arrow represents the flow of spending by households
A - top first row
ref 2-3 at which point or points can the economy not currently produce
A, C - the dots outside the line
ref to figure 2-2 the figure represents a circular-flow diagram. If the households are sellers in the markets represented by box d, then
ALL THE ABOVE - box d represents the markets for factors of production, box c represents the markets for goods and services, box c firms are sellers in the markets (all are correct)
ref to figure 2-1 which arrow represents the flow of goods and services
B - top second row
ref fig 2-3 the economy has the ability to produce at which point or points
B, D, E - the dots on the line or inside the line
ref 2-3 efficient production is represented by which point or points
B, E - the dots on the line
ref to figure 2-1 Michelle completes her first week of employment working as a hair dresser at a salon. On Friday of that week she receives her first paycheck. To which of the arrows does this activity contribute directly
C & D - both bottom rows
ref to figure 2-1 which arrow shows the flow of land, labor, and capital
C - bottom second row from bottom
ref to figure 2-1 which arrow shows the flow of income payments
D - bottom row from the bottom
ref 2-3 inefficient production is represented by which point or points
D - dot inside the line
ref 2-3 which point represents the situation in which the economy is producing its maximum possible quantity of tubas
E - the dot on the line that max out tubas
ref 2-2 Andrea regularly buys fruits and vegetables at a grocery store. Michael regularly pays a lawn-care company to mow his lawn. if the flow of fruits and vegetables from the grocery store to Andrea is represented by the arrow from box c to box b, then the money paid by Michael to the lawn-care company is represented by the arrow
box B and box C
ref to figure 2-2 the figure represents a circular-flow diagram. if box a represents firms, then which box represents households
box b, middle right
ref 2-5 the shift of the production possibilities frontier from a to b illustrates
economic growth
if the average cost of transporting a passenger on the train from Chicago to St. Louis is $75, it would be irrational for the railroad to allow ant passenger to ride for less than $75
false
tuition is the single opportunity cost of attending college for most students
false
with careful planning, we can usually get something that we like without having to give up something else that we like
false
ref to figure 2-2 the figure represents a circular-flow diagram Boxes a and d represent
firms and households
ref 2-2 if the owners of land, labor, and capital are represented by box b
firms are represented by box A
ref 2-2 if the households are buyers in the market represented by box c then,
firms are sellers in the markets represented by box C
ref 2-2 if the flow of goods and services is part of what is represented by the inner loop, then
flows of inputs, of which firms are buyers
ref 2-2 if the outer loop represents flows of dollars, then the inner loop includes
flows of inputs, of which firms are buyers
ref 2-2 Marsha works as an attorney for a corporation and is paid a salary in exchange for the legal services she performs. James owns office buildings and rents his buildings to companies in exchange for rent payments. if marsha's income is represented by a flow of dollars from box d to box b, then James income is represented by a flow of dollars
from box D to box B
the overriding reason as to why households and societies face many decisions is that
goods and services are not scarce
economics is the study of
how society manages its scarce resources
the rancher has an absolute advantage in
meat, and the farmer has a comparative advantage in potatoes
ref to figure 2-2 the figure represents a circular-flow diagram. Boxes c and d represent
none of the above
the farmer and the rancher both could benefit if the farmer were to specialize in
potatoes and the rancher were to specialize in meat
the rancher has a comparative advantage in
potatoes, and the farmer has a comparative advantage in meat
the farmer has an absolute advantage in
potatoes, and the rancher has an absolute advantage in meat
the farmer has an absolute advantage in
potatoes, and the rancher has comparative advantage in meat
Resources are
scarce for households and scarce for economies
Economics deals primarily with the concepts of
scarcity
ref 2-5 which of the following events would explain the shift of the production possibilities frontier from a to b
the economy experienced a technological advance in the production of batteries
Russell spends an hour studying instead of playing tennis. the opportunity cost to him of studying is
the enjoyment and exercise he would have received had he played tennis
table 2-1 which of the following statements accurately describes the production possibilities for toyland
the opportunity cost of an additional 100 dolls is 100 fire trucks