ECO 2013 Exam 1
Deciding how to make the best use of limited resources to satisfy virtually unlimited wants is known in economics as
Economizing behavior
Using a production possibilities curve, a technological advance that increases the amount of output for both goods while using the same amount of inputs would be illustrated by which of the following?
an outward shift of the curve.
Which of the following is true of resources?
-Resources are inputs used to produce goods and services. -Human resources reflect the skills and productive knowledge of human beings. -With the passage of time, investment can increase the availability of resources.
Michael takes 10 minutes to iron a shirt and 20 minutes to type a paper. Aiden takes 10 minutes to iron a shirt and 30 minutes to type a paper. Which of the following statements is correct?
Aiden has a comparative advantage in ironing.
Which of the following about economic decision making is true?
Changes in personal costs and benefits will exert a predictable impact on the choices of human decision makers.
Which of. the following is a normative economic statement?
Congress should increase the legal minimum wage
Even countries that depend primarily on market forces to resolve the basic economic questions will usually rely on the collective decision-making process to
Define and enforce private-property rights and designate the acceptable forms of competitive economic behavior.
Which of the following most accurately states the economic significance of exchange?
Exchange creates value by moving goods from parties who value them less to parties who value them more.
Which one of the following statements about pitfalls in economic decision making is correct?
Government programs can be implemented with good intentions but can lead to undesirable outcomes because of unintended consequences.
Which of the following is a positive economic statement?
If taxes are over 50% of national income, job creation falls.
Capital is a term economists use to refer to
Man-made resources used to produce other goods and services.
Mateo values his camper at $4,000, and Nicole values it at $9,000. If Nicole buys it from Mateo for $7,000, which of the following is true?
Mateo gains $3000 of value and Nicole gains $2000 of value.
According to marginal analysis, you should spend more time studying economics if the extra benefit from an additional hour of study
Outweighs the extra cost
The difference between positive economic statements and normative economic statements is that...
Positive statements are based on fact while normative statements are based on opinion
Which of the following would be most likely to increase your opportunity cost of attending college?
Receiving a very attractive offer to start a job today that would permit you to earn about 50% more than you expected to make after graduation.
Income tax legislation provides parents with a substantial reduction in their personal income tax liability for each child that they have. The economic way of thinking indicates that legislation of this type will
Reduce the after-tax cost of raising children and therefore increase the birth rate.
In Europe during the 14th century, the Black Plague killed 24 million people (close to 37% of the population). How would this affect the production possibilities curve for the countries of Europe at that time?
The production possibilities curves foe these countries would have shifted inward.
When collective decision making is utilized to resolve economic questions regarding the allocation of resources,
The role of markets will be replaced by political decision making.
The expression, "There's no such thing as a free lunch," means
The use of resources to meet one need means that those resources can no longer be used to meet another need.
Economic analysis suggests that gains from specialization and exchange
Will be realized if individuals are allowed to pursue goals that are in their own self interest.
Which of the following is true regarding private ownership?
With private ownership, owners are held accountable for using their resources in a manner that harms the resources of others.
The term ceteris paribus means
all other things remaining constant or equal. (all variables except those specified are constant.)
The law of comparative advantage suggests that
countries will tend to import commodities that they can produce at a relatively high opportunity cost.
The value of a good
depends on many factors, including who uses it and under what circumstances.
A point on the production possibilities curve represents a combination of goods that is
efficient
The opportunity cost of building a park in your hometown would be the
highest valued bundle of other goods and services that must be forgone because of the park construction.
A point inside the production possibilities curve represents a combination of goods that is
inefficient
In figure 2.1, point A is
inefficient
The successful introduction and adoption of a new product or process is known as
innovation
Because of a late night out with friends, Ayana decided to sleep in rather than attend her 8 a.m. economics class. According to economic analysis, her choice was
rational if Ayana values sleep more highly than the benefit she expects to receive from attending the class.
High transaction costs will tend to
reduce the number of mutually beneficial exchanges that occur.
Economics is primarily the study of
the allocation of scarce resources in an effort to satisfy wants that are virtually unlimited.
The opportunity cost of an action is
the highest valued alternative forgone as the result of choosing an option.
The opportunity cost of going to college is
the value of the best opportunity a student gives up to attend college