Module 1-5 HW

An economic transaction in which one party trades a good or service for another good or services is called

barter.

Vincent and Jean are two cooks who work in a village. Each of them can either bake cakes or make pizzas. Every ingredient is readily available to them, and the only scarce resource is the cooks' time. Vincent can bake 1010 cakes or make 55 pizzas in an hour. Jean can bake 1212 cakes or make 88 pizzas in an hour. Please answer the four questions. 1. Which cook has the absolute advantage in baking cakes? 2. Which cook has the absolute advantage in making pizzas? 3. Which cook has the comparative advantage in baking cakes? 4. Which cook has the comparative advantage in making pizzas?

1. Jean 2. Jean 3. Vincent 4. Jean

To make that decision you weighed your

opportunity cost

A farmer produces both beans and corn on her farm. If she must give up 16 bushels of corn to be able to get 6 bushels of beans, then her opportunity cost of 1 bushel of beans is

16/6=2.67 bushels of corn.

According to the graph of the production possibilities frontier, what is the opportunity cost of the second widget?

7-6/6-4= 0.5

How many more chicken feet were demanded in 2018, at a price of $1.00 a pound, than in 2008?

8.1 million pounds (12.2-4.1)

Christine and Paul are deciding how to split their time between writing music and lyrics for their new album. Their PPFs for 72 h of work are shown. Christine and Paul have to write music for 8 songs and lyrics for 12 songs (4 songs already have music). When they are done, they can go to a private island and relax from all their hard work. It is possible that they will use more than 72 h. Once they start writing lyrics and music, assuming their hired help packs for them and their plane is waiting outside their door, in how many hours can they board the plane to their relaxing island getaway?

96 hours (72+24) Christine will write music for 0 songs Paul will write music for 8 songs. Christine will write lyrics for 12 songs.

Which statement describes the equity-efficiency trade‑off?

Actions intended to make economic outcomes fairer may cause efficiency to decrease.

Shift of the demand curve

College students purchase many more energy drinks during finals week than during the rest of the semester Students eat out more often as the federal gove increases how much grant money it provides

Movement along the demand curve

College students reduce how much detergent they use for each load of laundry in response to higher detergent prices. College students rush and buy discount furniture to take advantage of an unexpected price drops.

Assume that a monsoon destroys the coffee crop in Vietnam, one of the world's largest coffee producers. What will likely occur?

Consumers will try to find alternatives to coffee due to increases in the price of coffee.

In which field do researchers focus on investigating the phenomena describe

Economics

Andrew, a college student, loves drinking coffee late at night to study for exams. Having no income, he is used to buying cheap, bad-tasting coffee, such as Beanlightened, that he needs to grind and brew himself. The coffee tastes putrid but, with enough cream and sugar, Andrew is able to tolerate it. Occasionally, he does go out to Starbucks when he has spare money. After graduation, Andrew gets a job working at a database firm as a programmer. His income is now a healthy $75,000 a year, and he decides he has had enough bad-tasting coffee. He ends up buying coffee daily from Starbucks, even though it costs significantly more than Beanlightened. In economic terms, Starbucks coffee is for Andrew a(n) Beanlightened coffee is for Andrew a(n) Andrew's demand for Starbucks coffee changed as a result of

Normal good inferior good a change in income.

Normative economics

Normative economics is concerned with value judgements.

What is Paulie's opportunity cost of producing a cup of ice cream?

Paulie's opportunity cost: 4.25 t‑shirts (17.00/4.00)

Positive economics

Positive economics is the scientific or objective study of the subject. It is concerned with finding out how economies and markets actually work.

What best explains the shape of the production possibility frontier in the graph?

Some resources used to produce one of the goods are not as productive w

Demand curve to the left

The curve shifts to the left if the determinant causes demand to drop

Which is NOT an example of a behavior exhibited in a market economy?

The president of the European country of Semolina decrees that pasta must be consumed at all meals in an effort to help domestic pasta makers.

Demand curve to the right

The shift of the demand curve to the right indicates an increase in demand

The five-dollar Burger Joint gift card that your friend gave you for your birthday expires today. You can either use the gift card to buy yourself dinner at Burger Joint, or you can stay home and eat a delicious home-cooked meal. What is the opportunity cost of eating the home-cooked meal?

The value of the ingredients that go into the home-cooked meal, and the value of a five-dollar dinner at Burger Joint.

Which statement or statements are true of all households?

They consume goods, services, or both.

Which statement or statements are true of all firms?

They sell goods, services, or both. They produce goods, services, or both

Why is the shape of the production possibilities frontier (PPF) often curved instead of straight?

Typically, some resources are better suited for producing one good than another, which means that there are diminishing returns when moving such resources away from producing what they are best suited for.

What is Vinny's opportunity cost of producing a t-shirt?

Vinny's opportunity cost: 0.5 cups of ice cream (6.00/12.00)

According to the law of demand,

a decrease in price increases quantity demanded.

A downward fluctuation in the economy like this is known as

a recession.

An economy is

a system for coordinating a society's productive and consumptive activities

The table presents information about the productivity of digital cameras and personal computers in the United States and Japan. The data are presented in units of output per hour of work. Use this information to answer the question. Japan has a(n) ___________________ advantage in producing ______________________ .

absolute, personal computers

Which of the items is most likely to be a complement to coffee?

creamer

Which decision is least likely to be well explained by marginal analysis?

deciding which college to attend

Which of the following terms best describes what your supervisor has failed at?

efficiency

Which is NOT an example of a resource?

firms

In a market economy, individuals' economic lives are said to be

interrelated with many other individuals and firms

The demand curve

is a graphical representation of the relationship between price and quantity demanded.

When trading with more developed countries,

less developed countries have a comparative advantage in the production of some goods or services.

The correct term is a key component of

macroeconomics.

Social welfare spending in Sweden occupies too large a portion of the national budget.

normative economics

The richest 11% of Americans should pay more taxes than the rest of the 99%.

normative economics

A decrease in the supply of coconut will increase the price

positive economics

As minimum wage increases, the prices of all goods and services also tends to increase.

positive economics

There are limited resources to satisfy all of society's wants

scarcity

Economics is the

study of the consumption, production, and distribution of goods and services.

c. Paulie has a comparative advantage in ____ and Vinny has a comparative advantage in ______ .

t-shirt and ice cream

"comparative advantage."

the ability to produce a good or service at a lower opportunity cost than another

Based on the demand schedule, you conclude

the demand curve shifted to the right.

Daniel has decided to open his own bakery using locally sourced ingredients and supplies. He provides income and jobs to local suppliers. He also provides his community with a place to buy delicious baked goods.

the invisible hand.

Comparing the benefits and costs of engaging in an activity.

trade-off