ECO exam 1

Macroeconomics focuses on

decisions affecting the entire economy.

The table shows the tons of steel or number of computers a worker can produce per day in Germany and South Korea. Use this table to answer the question. Germany should specialize in computer production, export computers, and import steel. produce both goods because it has an absolute advantage in the production of both goods. produce both goods because neither country has a comparative advantage. specialize in steel production, export steel, and import computers.

specialize in steel production, export steel, and import computers.

At Tokyo Disneyland, visitors typically demand more rides than the theme park can supply. In this situation, there is ___. a reimbursement free ridership a surplus a shortage

a shortage

Classify each resource used in production as land, labor, capital, entrepeneurs, or human capital. (a.) b. Which resource earns profits? human capital natural resouces capital entrepreneurs labor

a. ON b. entrepreneurs

The payment toward entrepreneurship is called rent. profit. wages. interest.

profit.

Another name for a market economy is the price system. the law of demand. the law of supply. comparative advantage.

the price system.

If a society's production possibilities frontier shifts to the right, the society's standard of living will likely increase.

True

Positive questions involve the understanding of basic facts.

True

If the supply of a good increases while the demand for that good decreases, the equilibrium quantity will

be indeterminate.

An economy exhibits production efficiency if

it produces goods at the lowest possible cost.

For most goods, as their prices rise, fewer units are sold.

true

An individual's valuation of a good or service is generally the same from person to person. impossible for individuals to express. known as willingness-to-pay. lower than the maximum value the individual will pay.

known as willingness-to-pay.

An increase in production subsidies causes an increase in supply.

An increase in production subsidies causes an increase in supply.

Which point in the figure is obtainable but NOT efficient? (Figure: Tanks and Health Care) a f g b

F (it is under the curve)

Individuals do not experience opportunity costs unless external costs occur.

False

Macroeconomics studies the outcomes of individual markets in the national economy.

False

Because Tokyo Disneyland charges a fixed admission fee for unlimited rides, shortages of rides occur. In general, what happens to prices when shortages of a good or service persist? Prices are bid up toward equilibrium. Prices remain constant. Prices fall to zero. Prices are bid down toward equilibrium.

Prices are bid up toward equilibrium.

You are the manager of Frito-Lay's Cheese Puffs account, and you notice that when the price of Cheetos increases, there is an increase in demand for Cheese Puffs. What is the economic relationship between these goods that explains this behavior? The increase in the price of Cheetos causes a decrease in the demand for Cheese Puffs; therefore. these goods are complements. The increase in the price of Cheetos causes a decrease in the demand for Cheetos; therefore, these goods are substitutes. The increase in the price of Cheetos causes an increase in the demand for Cheese Puffs; therefore, these goods are substitutes. The increase in the price of Cheetos causes an increase in the demand for Cheese Puffs; therefore, these goods are complements.

The increase in the price of Cheetos causes an increase in the demand for Cheese Puffs; therefore, these goods are substitutes.

What are the three basic economic questions each society must answer?

What to produce? How to produce? For whom to produce?

According to the law of demand, an increase in income increases demand. an increase in price decreases demand. a decrease in price increases quantity demanded. a decrease in price increases demand.

a decrease in price increases quantity demanded.

Prices help buyers find possible substitute goods. contain information useful for all people involved in a transaction. allow sellers to determine what goods to sell. allow sellers to determine what goods to sell, help buyers find possible substitute goods, and contain information useful for all people involved in a transaction.

allow sellers to determine what goods to sell, help buyers find possible substitute goods, and contain information useful for all people involved in a transaction.

Most trade is based on specialization, according to _____ advantage.

comparative

A decrease in the quantity supplied of iPads is caused by a(n) increase in the number of iPad consumers. technological advancement in iPad production. increase in TV advertising for iPads. drop in the price of iPads.

drop in the price of iPads.

Which combination between factors of production and their payment is INCORRECT? labor - wages land - rent capital - interest entrepreneurial ability - dividends

entrepreneurial ability - dividends

If the price of shoes is $20, then the market (Figure: Supply and Demand for Shoes) is in equilibrium. experiences a surplus of shoes. experiences a shortage of shoes. There is not enough information to answer this question.

experiences a shortage of shoes.

Prices provide no information other than a monetary value.

false

The opportunity cost of moving from point c to point b is about $50 million in health care services. (Figure: Tanks and Health Care)

false

Which graph represents a situation in which the equilibrium price has increased but the equilibrium quantity has fallen? graph A graph D graph C graph B

graph b (arrows move up to the left)

In a market economy, individuals' economic lives are said to be interrelated with many other individuals and firms. almost completely controlled by government regulation. illegal and in violation of government rules on prices and sales. based more on production than on consumption.

interrelated with many other individuals and firms.

The study of economics

is about people making decisions regarding their use of scarce resources.

Quantity supplied is the quantity of points that connect to form a supply curve. supply schedule. quantity of goods that producers must sell in order to stay in business. quantity of goods that producers are willing and able to sell at a given price.

quantity of goods that producers are willing and able to sell at a given price.

In the context of the production possibilities frontier, opportunity cost can be measured by the ratio of the costs of the two goods being produced. slope of the frontier. ratio of the amounts of the two goods being produced. amount of labor needed to produce the goods and services.

slope of the frontier.

The law of supply explains the negative relationship between price and quantity supplied. the positive relationship between price and quantity demanded. the positive relationship between price and quantity supplied. the negative relationship between price and quantity demanded.

the positive relationship between price and quantity supplied.

When specialization is used

there are greater gains in overall well-being.

Government policy to achieve high employment may cause inflation to rise too quickly.

true

Which is the best definition of efficiency? when somebody can be made better off without making someone worse off when nobody can be made better off without making someone worse off when everybody is as well off as possible when everyone can be made better off by using resources more wisely when the only way somebody can be made better off is by making another better off

when nobody can be made better off without making someone worse off

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

Paolo can walk three dogs or mow two lawns in two hours. Ashanti can walk six dogs or mow three lawns in two hours. One can conclude that Paolo has absolute advantage in dog-walking, and Ashanti has comparative advantage in lawn-mowing. Ashanti has absolute advantage in dog-walking, and Paolo has comparative advantage in lawn-mowing. Ashanti has absolute advantage in lawn-mowing, and Paolo has comparative advantage in dog-walking. Paolo has absolute advantage in lawn-mowing, and Ashanti has comparative advantage in dog-walking.

Ashanti has absolute advantage in dog-walking, and Paolo has comparative advantage in lawn-mowing.

The table shows the units of steel and personal computers a worker can produce per month in Germany and South Korea. Use this table to answer the question. (table O.N) Which statement about absolute advantage is true? Germany has an absolute advantage in the production of both steel and PCs. South Korea has an absolute advantage in the production of both steel and PCs. Germany has an absolute advantage in the production of steel, whereas South Korea has an absolute advantage in the production of PCs. South Korea has an absolute advantage in the production of steel, whereas Germany has an absolute advantage in the production of PCs. Neither country has an absolute advantage in the production of either good.

Germany has an absolute advantage in the production of both steel and PCs.

Fergie, Jimmy, Vivi, and Cindy are trying to form a band. They each have some basic skills on most instruments, so their current plan is for each of them to rotate among vocals, guitar, bass, and drums. After a year of practice and rehearsals the band still sounds awful. Fergie cannot keep a steady beat when on bass or drums, Vivi sounds terrible on everything except the bass, nobody except Jimmy can remember all the chords on guitar, and even Cindy's own mother thinks her singing sounds like a dying cow. At their current rate, they expect it will be several years before they are good enough to land their first paid performance. None of them have enough money saved up to last that long. They all know you are taking economics and ask your advice. What would you say to them? Abandon the band, as continued practice is doomed to suffer diminishing marginal returns. Have each member specialize in the role that they are best in to take advantage of benefits from specialization. Invest their remaining savings in new instruments, as they are at a point where the marginal product of capital exceeds the marginal product of labor. Continue with the current plan, as economies of scale should eventually kick in. Change the rotation to be random rather than equal to take advantage of heteroskedasticity.

Have each member specialize in the role that they are best in to take advantage of benefits from specialization.

The production possibilities frontier (PPF) for Honduras and Brazil, representing hypothetical levels of production, are shown in the graphs. Assume that, without trade, each country is initially producing and consuming at point A on its PPF curve. Suppose these countries decide to trade. Each country will specialize in the production of the good for which it has a comparative advantage. Assume the countries agree to trade. The terms of trade are 6000 tons of bananas for 4000 tons of steel. Move the post‑trade consumption point for each country to reflect their post‑trade consumption. Which good will each country produce? Honduras will produce both bananas and steel. Brazil will produce both bananas and steel. Honduras will produce steel and Brazil will produce bananas. Honduras will produce bananas and Brazil will produce steel.

Honduras will produce bananas and Brazil will produce steel. move dot for Honduras to (2,6) move dot for brazil to (4,6

In which scenario is an individual's behavior least likely to change? In an effort to make people eat healthier, the city of Bakersville tells its residents to eat wheat bread instead of white bread. The city of Saskatoon chooses to give its residents a penny for each soda can they recycle in an effort to promote environmental awareness. A basketball team manages to sign a trio of famous basketball stars who then clamor for other players to come join their team to win a guaranteed championship. The country of Ravamolk enacts a policy to fine companies 20% of their earnings if the safety standards in their factories do not reach acceptable work conditions.

In an effort to make people eat healthier, the city of Bakersville tells its residents to eat wheat bread instead of white bread.

Which of the following statements explains why markets lead to an efficient outcome for buyers and sellers?

Markets are flexible, so that prices adjust until every unit of a good that sellers wish to sell is purchased by a consumer who wishes to buy it.

Suppose there are only two goods produced in an economy: phones and meals. Maria is adept at assembling electronics but has poor skills at preparing food. Mike is an accomplished chef but is not very skilled at assembling electronics. Currently Mike and Maria each work independently, and they each produce both meals and phones. However, they are considering trading some of their respective output with each other, but only if that would allow each person to become more prosperous. Which statement is not true? Mike and Maria would gain by using their time making only the one good that they are best at producing. Customers will gain if Mike and Maria decide to specialize in what they do best and trade their output. Mike should produce more food and fewer phones, and Maria should produce more phones and fewer meals. Mike and Maria will both gain only if they trade the same number of phones for the same number of meals.

Mike and Maria will both gain only if they trade the same number of phones for the same number of meals.

Most amusement parks in the United States charge a fixed price for admission, which includes unlimited roller coaster rides for the day. Some people attempt to ride the roller coasters as often as possible in order to maximize the value of their admission. Does planning to ride the coaster repetitively demonstrate thinking on the margin? No, riding a roller coaster continuously could lower the rider's total satisfaction. Yes, thinking on the margin allows the rider to get his or her money's worth. No, thinking on the margin only considers the marginal cost of a choice. Yes, the average cost decreases after every ride, maximizing the park visit.

No, riding a roller coaster continuously could lower the rider's total satisfaction.

China's high growth rate over the past two decades has allowed its economic output to nearly catch up to that of the United States. If China continues to grow much faster than the United States, would this eventually lead to the elimination of scarcity in China? Yes, China will no longer experience scarcity because the only scarcity that exists is in the creation of goods and services. Yes, China will be able to pay workers better wages, which will eliminate scarcity altogether. No, China will never catch up with the United States. No, scarcity will always exist in China.

No, scarcity will always exist in China.

Which question would be considered a normative question? Should obstacle races be regulated to ensure the safety of participants? How much does an entry for an obstacle course race cost? How many people participated in obstacle course racing last year? When and where are the major obstacle races held?

Should obstacle races be regulated to ensure the safety of participants?

What does the price of diesel fuel in Russell, KS have to do with the price of bread in Boulder, CO? Since farmers in Kansas use diesel fuel‑powered equipment to plant, harvest, and transport grain, an increase in the price of fuel may increase the price of bread. Nothing. All bread in Boulder, CO is produced with grain from locally owned, wind‑powered, organic farm cooperatives. As the price of diesel fuel in Kansas increases, the price of bread in Colorado falls because it is cheaper to plant, harvest, and transport grain. As the price of bread increases in Colorado, farmers use more and more diesel fuel. This drives up the price of diesel fuel.

Since farmers in Kansas use diesel fuel‑powered equipment to plant, harvest, and transport grain, an increase in the price of fuel may increase the price of bread.

Why would the demand for some goods fall as incomes rise? When incomes rise, the demand for all goods increases. Thus, the statement is not true. Suppliers stop producing certain goods. When incomes rise, people start saving more and reduce their consumption of all goods. Some goods are inferior goods, and consumers substitute normal goods for them when their incomes rise.

Some goods are inferior goods, and consumers substitute normal goods for them when their incomes rise.

One day, a local theme park charges $40 per person for admission, and 10,000 people visit the park. On another day, the park charges $60 per person, and 20,000 people pay to enter the park. Which explanation best describes why the park sees an increase in attendance when the price is higher? The low-attendance day falls on an autumn Wednesday, while the high-attendance day falls on a summer Saturday.The higher price gives the park an incentive to expand capacity and permit more visitors.High prices signal a high quality park experience.Theme-park tickets are part of a rare class of goods which do not follow the Law of Demand.

The low-attendance day falls on an autumn Wednesday, while the high-attendance day falls on a summer Saturday.

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. Despite the advice of its business partners, Puna discontinues its most popular lines of clothing, and chooses instead to produce retro jean jackets and purple sweatpants, thinking that jean jackets and sweatpants are bound to make a fashion comeback. For their wedding, Alex and Erika choose Matte Photography instead of Pro Finish Photography, since Matte Photography is cheaper. Nettoyer decides to introduce a soap scent, Pomegranate, in response to Schoon's new soap scent, Blood Orange, and Sauber's award-winning scent, Tangerine.

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.

The New York Times reported in an article titled "What the Top 1% of Earners Majored In," that 8.2% of Americans who majored in economics for their undergraduate degree are in the top 1% of salary earners. Only those who majored in pre-med had a higher percentage in the top 1%. Which of the following is a plausible reason why economics majors have done so well in the job market? Most economics majors pursue government jobs, which pay well. Because there are so few economics majors, those who complete the major command high salaries. The subject of economics allows students to pursue careers in a wide variety of areas. Economics is a high-prestige major, and high-prestige majors tend to attract greater employer interest.

The subject of economics allows students to pursue careers in a wide variety of areas.

One of the most important ingredients in bubble tea is the tapioca pearls that are added to the tea. If the price of tapioca flour increases, what will happen to the supply of bubble tea, all else being equal? The supply of bubble tea will increase modestly. The supply of bubble tea will not change. The supply of bubble tea will decrease. The supply of bubble tea will increase dramatically.

The supply of bubble tea will decrease.

The $15 Kelly's Big Burger gift card that your friend gave you for your birthday expires today. You can either use the gift card to buy yourself dinner at Kelly's Big Burger, 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 a $15 meal at Kelly's Big Burger. The time it takes to eat your home-cooked meal, and the value of a $15 meal at Kelly's Big Burger The value of the ingredients that go into the home-cooked meal. There is no opportunity cost since you did not pay for the gift card. The value of the ingredients that go into the home-cooked meal, and the value of a $15 meal at Kelly's Big Burger .

The value of the ingredients that go into the home-cooked meal, and the value of a $15 meal at Kelly's Big Burger .

If the price of tennis balls goes up from $7.99 to $14.99, what can be expected from suppliers of tennis balls as a result? There will be an increase in quantity supplied. The quantity supplied will not change. There will be an increase in supply. There will be a decrease in quantity supplied.

There will be an increase in quantity supplied.

Which of the following questions would be studied in the area of microeconomics? What determines the number of hours an individual works? Does hosting the Olympics decrease the unemployment rate? Will an increase in government spending cause inflation? What portion of total spending comes from households? Do interest rates affect net exports?

What determines the number of hours an individual works?

The black rhinoceros is an endangered animal. Its horn is considered a powerful aphrodisiac in many Asian countries, and a single horn fetches many thousands of dollars in the black market, creating a great incentive for poachers. Unlike other stories of endangered species, this one might have a simple solution. Conservationists could simply capture as many rhinos as possible and remove their horns, reducing the incentive to poach. Is this likely to reduce poaching? No, poachers will continue to kill black rhinoceros because they lack other employment opportunities. Yes, removing the horns eliminates the incentives to kill black rhinoceros. Yes, people don't buy rhinoceros horns because they are concerned about black rhino extinction. No, people will still participate in trophy hunting.

Yes, removing the horns eliminates the incentives to kill black rhinoceros.

Can a country which does not have an absolute advantage in producing a good or service still benefit from trade? Yes; a country can still benefit from trade as long as the country has a comparative advantage in producing a good or service. No; a country must be able to produce one good or service more efficiently than another country. No; a country must have both an absolute advantage and comparative advantage in producing a good or service to benefit from trade. Yes; a country can benefit from trade even when neither a comparative advantage nor an absolute advantage exists.

Yes; a country can still benefit from trade as long as the country has a comparative advantage in producing a good or service.

Andrew, a college student, loves drinking coffee late at night to study for exams. Having a small income, he is used to buying cheap, bad tasting coffee 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's had enough bad tasting coffee. He ends up buying coffee daily from Starbucks even though it costs significantly more. Andrew's demand for Starbucks coffee changed as a result of a change in the number of consumers. a change in expectations. a change in income. a change in a related good or service. a change in technology.

a change in income.

Which factor would NOT change the demand for sea kayak tours? a decrease in the price of a sea kayak tour an increase in the price of bicycle tours, a substitute activity the onset of sunny summer beach weather news reports of whales in the harbor

a decrease in the price of a sea kayak tour

Which circumstance will cause a movement down along a demand curve? an increase in the price of a complementary good a decrease in the product price an increase in the price of a substitute good an increase in the product price

a decrease in the product price

In the table, at a price of $12 a shortage of 20 units occurs. a surplus of 40 units occurs. equilibrium output is achieved. a surplus of 20 units occurs.

a surplus of 20 units occurs.

What is considered a labor resource? mineral deposits a sewing machine a trainee a copier

a trainee

The following table gives the supply and demand for orchid leis in Hawaii. a. The equilibrium price of orchid leis is _______ and the equilibrium quantity of orchid leis is ______ b. Using the information in the table, which graph best illustrates the market equilibrium? a b c d

a. $15, 16 b. b

Suppose that the economy of El Paso creates only cowboy boots and pecans. The production possibilities frontier (PPF) per year for El Paso is illustrated in the graph and is currently producing at the point labeled A. (graph o.n) Move point B to show the economy efficiently producing one thousand more cowboy boots. Now, determine the opportunity cost of producing an additional 1,000 cowboy boots, i.e., shifting from point A to point B. Enter your answer specified to one decimal place. a. Opportunity cost: ______ pecans Shift point C to indicate El Paso increasing production of cowboy boots from point B by another thousand. Determine the opportunity cost of shifting from point B to point C. Enter your answer specified to one decimal place. b. Opportunity cost: ______ pecans c. This PPF exhibits what kind of opportunity costs? decreasing increasing constant

a. 1400 b. 3600 c. increasing graph: C (0,4000) B (3500,3000)

The accompanying table gives the supply and demand for orchid leis in Hawaii. Assume that luxury hotels in Hawaii begin cost-cutting measures and no longer present guests with leis upon check-in. This reduces demand for orchid leis by 8,000 units at every price. Using this new information, indicate the following: a. Quantity demanded at a price of $5: b. Quantity demanded at a price of $10: c. Quantity demanded at a price of $15: d. The new equilibrium price is ________ per lei, and the new equilibrium quantity is _______ e. Using the table above, which of the following graphs best illustrates the market equilibrium? a b c d

a. 16 b. 12 c. 8 d. $5, 16 e. d

The accompanying table gives the supply and demand for orchid leis in Hawaii. Assume the Hawaiian lei industry now increases its use of orchids from Thailand, allowing it to increase the supply of orchids by 8,000 units at every price. Using this new information, indicate the following: a.Quantity supplied at a price of $5: b. Quantity supplied at a price of $10: c. Quantity supplied at a price of $15: d. The new equilibrium price is _______ per lei, and the new equilibrium quantity is _______ e. Using the table above, which of the following graphs best illustrates the market equilibrium? a b c d

a. 16 b. 20 c. 24 d. $10, 20 e. c

Suppose that Ned can produce either potato chips or computer chips. If he only produces potato chips he can produce 50 in a day. If he only produces computer chips, he can produce 25 in a day. Drag the endpoints of the line to plot his production possibilities frontier (PPF) on the graph. a. What is the opportunity cost of computer chip production in terms of POTATO chips/COMPUTER chip? 1/2 4/3 50 3/4 2 25 b. move points in graph

a. 2 b. Y axis = 50, X axis = 25

Suppose that Ned can produce either potato chips or computer chips. If he only produces potato chips he can produce 25 in a day. If he only produces computer chips, he can produce 50 in a day. Drag the endpoints of the line to plot his production possibilities frontier (PPF) on the graph. a. What is the opportunity cost of potato chip production in terms of COMPUTER chips/POTATO chip? 4/3 25 2 50 1/2 3/4 b. move points on graph

a. 2 b. Y axis= 25, x axis= 50

Ned owns a small electronics repair business. He can either repair iPhones or Samsung phones. If he only repairs iPhones he can repair 16 phones in a day. If he only repairs Samsung phones, he can repair12 in a day. Drag the endpoints of the line to plot his production possibilities frontier (PPF) on the graph. a. What is the opportunity cost of Samsung repairs production (in terms of iPhone repairs/Samsung repairs)? 12 2 4/3 3/4 1/2 16 b. move points on graph

a. 4/3 b. Y axis = 16, X axis = 12

The demand schedule for chicken feet, a dim sum delicacy served at some Chinese restaurants, is shown in the table. Although some people find the texture strange, others have developed a taste for it. a. How many more chicken feet were demanded in 2018, at a price of $3.00 a pound, than in 2008? __________ million pounds b. Based on the demand schedule, you conclude there was movement along the demand curve to the right. the demand curve shifted to the right. there was movement along the demand curve to the left. the demand curve shifted to the left.

a. 6.2 b. the demand curve shifted to the right.

The accompanying table gives the supply and demand for orchid leis in Hawaii. Now assume that severe monsoons and civil unrest in Thailand lead to a reduction in orchid production by an amount equivalent to 8,000 orchid leis supplied at every price. Using this new information, indicate the following: a.Quantity supplied at a price of $5: b. Quantity supplied at a price of $10: c. Quantity supplied at a price of $15: d. The new equilibrium price is _______ per lei, and the new equilibrium quantity is _______ e. Using the table above, which of the following graphs best illustrates the market equilibrium? a b c d

a. 8 b. 12 c. 16 d. $10, 12 e. a

The production possibilities frontier represents production choices for the hypothetical island nation of Mauistan in the short run. (Graph O.N) A. Which point is likely to result in the most economic growth for Mauistan? C A B D B. Which statement explains the tradeoff between today's consumption and future consumption? The production of more capital goods and fewer consumer goods today increases economic growth and future consumption. The production of more capital goods and more consumer goods today increases economic growth and future consumption. The production of more consumer goods and fewer capital goods today increases economic growth and future consumption. The production of more capital goods and fewer consumer goods today decreases economic growth and future consumption.

a. A b. The production of more capital goods and fewer consumer goods today increases economic growth and future consumption.

Using the graph of a production possibilities frontier (PPF), please answer the questions. a. Which point demonstrates productive efficiency? D B C A b. At which point on the graph is it possible to produce more tangerines without reducing the quantity of bananas that are also produced? C D B A

a. C b. A

Assume France and Chad can both produce grain and dates, and that the only limited resource is the farming labor force, meaning that land, water, and all other resources are plentiful in both countries. Each farmer in France can produce 10 t of grain or 5 t of dates in a season. Each farmer in Chad can also produce 10 t of grain or 25 t of dates. Please answer the four questions. a. Which country has the absolute advantage in producing dates? b. Which country has the absolute advantage in producing grain? c. Which country has the comparative advantage in producing dates? d. Which country has the comparative advantage in producing grain?

a. Chad b. Neither c. Chad d. France

The accompanying Production Possibilities Frontiers (PPF) represent hypothetical levels of production for Honduras and Brazil. Assume the two countries are initially producing and consuming in autarky at point A on each of their PPFs. Suppose these countries decide to trade. Each country will specialize in the production of the good for which it has a comparative advantage. a. What will each country produce? Brazil will produce both goods. Honduras will produce both goods. Honduras will produce bananas and Brazil steel. Honduras will produce steel and Brazil bananas. b. Suppose each country specializes in the production of the good for which it has a comparative advantage, and they trade at a price of of 4,000 tons of steel for 6,000 tons of bananas. Place the points labeled "Post Trade Consumption" to show the amounts of bananas and steel each country will have to consume after they trade. Move the points

a. Honduras will produce bananas and Brazil steel. b. Honduras PPF (2,4) Brazil PPF (5,6)

Assume Spain and Niger can both produce grain and dates and that the only limited resource is the farming labor force, with land, water, and all other resources plentiful in both countries. Each farmer in Spain can produce 10 tons of grain or 5 tons of dates in a season. Each farmer in Niger can produce 10 tons of grain or 25 tons of dates. a. Which country has the absolute advantage in producing dates? b. Which country has the absolute advantage in producing grain? c. Which country has the comparative advantage in producing dates? d. Which country has the comparative advantage in producing grain?

a. Niger b. Neither c. Niger d. Spain

Innovation and technology have allowed for new forms of biodegradable plastics to be created that are less harmful to the environment. This appeals to consumers, but the new biodegradable plastics are costly and their use is limited. a. Do such inventions impact the production efficiency of industries that use a lot of plastic such as the construction and automobile industries? Yes, if new biodegradable technologies impact consumers' demand. Yes, because industries that use a lot of plastics will need to increase their labor supply. No, because firms can produce efficiently using either traditional or biodegradable plastics. No, but only if new biodegradable technologies do not impact society's desires. b. Do such inventions impact the allocative efficiency of industries that use a lot of plastic such as the construction and automobile industries? Yes, because consumers' preferences between traditional plastics and biodegradable plastics will change. Yes, because biodegradable plastic is scarce and more expensive than traditional plastic. No, because new biodegradable technologies do not impact society's desires. No, because new biodegradable technologies do not impact production decisions in other industries.

a. No, because firms can produce efficiently using either traditional or biodegradable plastics. b. Yes, because consumers' preferences between traditional plastics and biodegradable plastics will change.

Which production possibilities frontier (PPF) reflects increasing opportunity costs? PPF 1 PPF 2 PPF 3 PPF 4 b. Determine what causes the PPF to take that shape. Factors of production can be used in either widget or gizmo production, but some are more productive at producing widgets and some are more productive at producing gizmos. There is only one factor of production and it cannot be used in both sectors at the same time. Factors of production can be shifted from widget production to gizmo production with no change in productivity. Factors of production used to produce widgets cannot be used to produce gizmos, and vice versa.

a. PPF 4 b. Factors of production can be used in either widget or gizmo production, but some are more productive at producing widgets and some are more productive at producing gizmos.

The accompanying graph represents a demand curve for a bucket of golf balls at the local driving range. Use the graph below to illustrate graphically the effects of an increase in price from $5 per bucket, denoted by the point P★, to $7 per bucket. O.N a. Based on your movement of the graph, which of the following correctly decribes the law of demand. Price and demand move in the same direction. Price and quantity demanded move in the opposite direction. Price and quantity demanded move in the same direction. Price and demand move in the opposite direction. b. move P

a. Price and quantity demanded move in the opposite direction. b. move P (3.3,7)

Below is a supply curve for a slice of gourmet pizza. Illustrate on the graph the impact of a decrease in price from $8 per slice, denoted by point P★, to $5 per slice. O.N a. Based on your graph, which of the following correctly describes the relationship between price and quantity supplied. Price and supply move in the same direction. Price and quantity supplied move in the opposite direction. Price and supply move in the opposite direction. Price and quantity supplied move in the same direction. b. move points

a. Price and quantity supplied move in the same direction. b. move P to (5.5,5)

Consider the graph. a. What best explains the shape of the production possibility frontier in the graph? The production of widgets and gizmos require the same resources to produce. This economy has the capacity to produce different combinations of widgets and gizmos. Some resources used to produce one of the goods are not as productive when they are used to produce the other good. Producers can move from one point to another on the production possibilities frontier in response to consumers' demands. b. According to the graph of the production possibilities frontier, what is the opportunity cost of the sixth widget? about 0.5 gizmos about 2 gizmos about 3 widgets about 6 widgets

a. Some resources used to produce one of the goods are not as productive when they are used to produce the other good. b. about 0.5 gizmos

The day-to-day living conditions of modern Americans are very different from what they were in the 20th century. While doing research for an economics project, Charlie discovers that more households today, as compared to households 100 years ago, have electricity, air conditioning, and a car. a. Which of the following explains why modern Americans enjoy a higher standard of living than Americans 100 years ago? Market failure has been nonexistent. Americans have prospered and earned more money, due to absence of recessions. The invisible hand has guided all nations around the world to prosperity. There has been economic growth in our society. b. In which field do researchers focus on investigating the phenomena described? Sociology Political Science Business Economics

a. There has been economic growth in our society. b. Economics

Which of the following explains why modern Americans enjoy a higher standard of living than Americans 100 years ago? The invisible hand has guided all nations around the world to this prosperity. Market failures are nonexistent. There has been economic growth in our society. Americans have prospered and earned more money due to a complete lack of recessions. In which field do researchers focus on investigating the phenomena described? Sociology Business Economics Political Science

a. There has been economic growth in our society. b. 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. a. Andrew's demand for Starbucks coffee changed as a result of a change in income. a change in a related good or service. a change in technology. a change in the number of consumers. a change in expectations. b. Beanlightened coffee is for Andrew a(n) ___________ c. In economic terms, Starbucks coffee is for Andrew a(n) __________

a. a change in income. b. inferior good c. normal good

According to the By the Numbers graph, in how many years over the period 1996-2015 did the U.S. trade balance improve (become less negative) from the previous year? about twelve years no more than three years about six years at least seven years b. According to the graph, the U.S. trade balance generally improves during a recession. What is the most likely explanation for this? Because other countries' economies are likely not declining, foreigners increase their purchasing of U.S. exports. Because incomes fall during a recession, consumers buy fewer goods and services, including imported ones. Because U.S. consumers decrease spending on domestic goods and services, U.S. manufacturers ship this extra product to other countries to be sold. Because production is down, firms are more likely to upgrade their facilities, requiring additional imported capital goods.

a. about six years b. Because incomes fall during a recession, consumers buy fewer goods and services, including imported ones.

From an economic context, select the correct definition of a market. an institution where stocks or bonds are purchased a place where groceries and other household items are bought and sold the process of using advertising to convince potential buyers to purchase a product an institution that brings together buyers and sellers of goods or services b. Select all examples of a market. Trader Joe's: a grocery store frequented by "foodie" types the free‑agent signing period in the NFL where players hoping to sign with a team interact with teams looking for additional players the New York Stock Exchange a local farmer's market

a. an institution that brings together buyers and sellers of goods or services b. (all ) Trader Joe's: a grocery store frequented by "foodie" types the free‑agent signing period in the NFL where players hoping to sign with a team interact with teams looking for additional players the New York Stock Exchange a local farmer's market

Which phrase do we use to indicate that we are trying to study the relationship between two variables while the values of all other variables are held unchanged? ceteris paribus et alii e pluribus unum ad hominem Why is this restriction so useful in economic analysis? If every variable is allowed to change, it would be impossible to isolate the impact of one variable on another. Because one of the two variables might have a larger impact on a third variable than the other one being examined. If other variables that do not interact with these two variables are not held fixed, the true relationship between the two variables would be hidden. To fully understand the relationship between two variables, it is necessary to change each of the variables sequentially while holding the others constant.

a. ceteris paribus b. If every variable is allowed to change, it would be impossible to isolate the impact of one variable on another.

Which of the items is most likely to be a complement to coffee? tea creamer decaf coffee baked beans b. If a monsoon destroys the coffee crop in Vietnam, one of the world's largest coffee producers, what will likely occur? There will be no change in the market for coffee. The price of sugar and creamer will increase. People will consume more coffee. Consumers will try to find alternatives to coffee due to increases in the price of coffee.

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

Suppose the cost of lithium-ion batteries, an input into the production of electric vehicles, has dropped more steeply than expected. The accompanying graph depicts a market for electric vehicles. Demonstrate the effect of a reduction in the price of lithium-ion batteries by adjusting the accompanying diagram. a. Equilibrium price decreases. may increase or decrease, but it is impossible to now for sure. does not change. increases. b. Equilibrium quantity may increase or decrease, but it is impossible to now for sure. does not change. decreases. increases. c. shift supply

a. decrease b. increase c. supply line to right

The figure shows the supply and demand for online music. Suppose that an economic downturn decreases household wealth and erodes consumer confidence. Move the supply and/or demand curves to reflect the primary effect this would have on the market for online music. You can assume that online music is a normal good. Also select the end result of equilibrium price and quantity. b. Equilibrium price increases. decreases. remains constant. change is ambigous. a. Equilibrium quantity increases. decreases. remains constant. change is ambiguous. c. move demand curve

a. decreases. b. decreases. c. move demand curve to left

During the summer, the largest computer game retailer has a massive sale. As prices for computer games fall, consumers purchase more games, ceteris paribus. What does the term ceteris paribus mean in this context? that the basic concepts of economics do not apply allowing all economic variables to change that it is an easy to understand statement and does not require complex analysis holding all else equal (unchanged) Why, if at all, is the ceteris paribus condition important in economic analysis? It is not important.It allows the analysis of how a single change affects an economic environment. It allows the analysis of how changes in every economic variable at once affects an economic environment.

a. holding all else equal (unchanged) b. It allows the analysis of how a single change affects an economic environment.

The U.S. government has subsidized ethanol production since 1978. With the advent of affordable electric cars, policymakers are considering whether to allow the subsidy to expire. The accompanying graph represents the market for ethanol. Move the supply and/or demand curves to show how reducing the subsidy will affect the ethanol market. a. Equilibrium price increases. decreases. may increase or decrease, but it is impossible to know for sure. remains constant. b. Equilibrium quantity decreases. may increase or decrease, but it is impossible to know for sure. increases. remains constant. c. move supply curve

a. increase b. decrease c. shift left

Suppose that there has been a sudden influx of refugees in the small town of Dallon, leading to a doubling of the local population. The accompanying graph depicts Dallon's market for food. Adjust the graph to show the immediate impact that this rise in population has on the food market. Then determine what happens to equilibrium price and quantity. a. Equilibrium price remains constant. increases. decreases. may increase or decrease, but it is impossible to now for sure. b. Equilibrium quantity increases. remains constant. may increase or decrease, but it is impossible to now for sure. decreases. c. shift demand

a. increases b. increases c. demand line to right

Lumber and brick are substitutes in home construction. Consider the market for bricks depicted in the graph. Suppose the price of lumber increases due to new regulations for the logging industry. Shift one or both curves in the graph to illustrate the impact this change will have on the market for bricks. O.N a. Equilibrium price increases. decreases. remains constant. change is ambiguous. b. Equilibrium quantity increases. decreases. remains constant. change is ambiguous.

a. increases. b. increases. c. demand shifts right up, supply stays

Stone and brick are substitutes in home construction. Consider the market for bricks depicted in the graph. Suppose the price of stone increases due to new regulations for the stone quarrying industry. Illustrate the impact this will have on the market for bricks. a. Equilibrium price may increase or decrease, but it is impossible to know for sure. increases. remains constant. decreases. b. Equilibrium quantity remains constant. decreases. may increase or decrease, but it is impossible to know for sure. increases. c. move demand curve

a. increases. b. increases. c. move demand to right

To the citizens of the country of Merka, there is no meal better than a hot dog nestled securely in a hot dog bun. Relish is optional, mustard is not. The hypothetical market for hot dogs in Merka is graphed. Suppose that the price of hot dog buns decreases. Illustrate the impact of this change on the market by manipulating the appropriate curve or curves. O.N a. The equilibrium price of hot dogs increases. decreases. remains the same. b. The equilibrium quantity of hot dogs increases. remains the same. decreases.

a. increases. b. increases. c. move demand up to right, supply stays

Classify each resource used in production as land, labor, capital, or entrepreneurs. a. Ore b. Mercy, a server at Sonic Drive-In c. Farmer Tanner's tractor d. Aunt Sandy's Jammin' Jellies (the business) e. The Rio Grande f. Your coworkers g. Nic's Taco Truck (the idea) h. Nic's Taco Truck (the truck itself) i. Lake Balboa j. Your favorite bartender k. Which resource earns profits?

a. land b. labor c. capital d. entrepreneurs e. land f. labor g. entrepreneurs h. capital i. land j. labor k.entrepreneurs

The graph contains individual supply curves for the only two firms in a hypothetical market for stuffed animals. Place the market supply curve at the correct location on the graph. Then, consider what would happen to the market if a third supplier enters the market, holding all else constant. O.N a. A third firm would mean market supply increases. higher prices of stuffed animals. market supply decreases. Firm 1 and Firm 2 would lower output to accommodate the new supplier in order to keep market supply constant. b. move market line

a. market supply increases. b. (5000,1) (9000,8)

Indicate whether each event described falls mainly in the field of microeconomics or that of macroeconomics. a. A tax on tires increases the price of tires paid by car owners. b. As a result of a severe recession, the total output, or gross domestic product, of a nation falls by 4 percent. c. Increased consumer spending causes the national unemployment rate to fall. d. Increased consumer spending causes the rate of inflation to rise. e. Optimism about future car sales leads General Motors to hire more auto workers. f. Robotic technology reduces the demand for auto workers.

a. microeconomics b. macroeconomics c. macroeconomics d. macroeconomics e. microeconomics f. microeconomics

Identify the statements as either a microeconomic issue or a macroeconomic issue. a. In January of 2014, a person made a personal budget. b. The Canadian unemployment rate was lower in January of 2014 than it was in January of 2012. c. A person blames inflation for the general increase in prices at the grocery stores throughout British Columbia. d. A person gets a raise at work.

a. microeconomics b. macroeconomics c. macroeconomics d. microeconomics

Disneyland in California has an exclusive members‑only club called Club 33, where celebrities and wealthy executives dine on fine food. Although annual membership fees are reported to be about $30,000, there is still a 14-year waiting list to join. a. In the graph, place point E to identify the market equilibrium in the market for Club 33 Memberships. b. At a price of $30,000, there is a... surplus of 60 memberships. shortage of 80 memberships. shortage of 140 memberships. shortage of 40 memberships.

a. move point E (100,50) b. shortage of 80 memberships.

These figures illustrate the production possibilities available to Kate and Sarah with eight hours of labor in their bakery. Answer the questions according to these figures. O.N a. Kate has an absolute advantage in bread. both goods. neither good. cake. b. Sarah has an absolute advantage in cake. neither good. both goods. bread.

a. neither good. b. both goods.

Determine whether each statement reflects positive analysis or normative analysis. a. The richest 11% of Americans should pay more taxes than the remaining 9999%. b. A decrease in the supply of coconut will increase the price of German chocolate cake, a good that requires coconut shavings as a key ingredient. c. As the minimum wage increases, the prices of all goods and services also tend to increase. d. Social welfare spending in Sweden occupies too large a portion of the national budget.

a. normative analysis b. positive analysis c. positive analysis d. normative analysis

Determine if the items represent an example of positive economics or normative economics. a. The richest 11% of Americans should pay more taxes than the rest of the 9999%. b. A decrease in the supply of coconut will increase the price of German chocolate cake, a good which requires coconut shavings as a key ingredient. c. As minimum wage increases, the prices of all goods and services also tends to increase. d. Social welfare spending in Sweden occupies too large a portion of the national budget.

a. normative economics b. positive economics c. positive economics d. normative economics

Answer the two questions relating to demand and the law of demand. a. Which can cause a shift in the demand curve? A change in the cost of production the price of a good one of the determinants of demand the technology used by firms b. Which of the choices illustrates the law of demand? Pat wants to buy more candy bars at $1 than at $2. wants to buy more candy bars at $2 than at $1. None of the choices. offers more candy bars for sale at $2 than at $1.

a. one of the determinants of demand b. wants to buy more candy bars at $1 than at $2.

Answer the two questions relating to supply and the law of supply. a. Which would cause a shift in the supply curve? the demand curve shifted. the price of a good changed. one of the determinants of supply changed. buyers' incomes changed. b. What would happen if the price of kayaks increased? the supply of kayaks would increase. sellers would offer more kayaks for sale. sellers would offer fewer kayaks for sale. the supply of kayaks would decrease.

a. one of the determinants of supply changed. b. sellers would offer more kayaks for sale.

The following table shows the units of output a worker can produce per month in Germany and South Korea. Use this table to answer the following question. a. The opportunity cost of one ton of steel in Germany is one-half of a PC. one-quarter of a PC. four PCs. two PCs. b. The opportunity cost of one ton of steel in South Korea is one-quarter of a PC. one-half of a PC. two PCs. four PCs. c. Which country has a comparative advantage in steel production? South Korea Germany Neither

a. one-quarter of a PC. b. one-half of a PC. c. Germany

Classify each characteristic according to whether it describes positive economics or normative economics. a. Describes current economic events. b. Predicts how the economy will change as a result of specific events. c. Concerns over the effects of an economic decision on people and not on how they will feel about it or what they will believe about why the decision was made. d. Involves recommendations or arguments about what should be. e. Offers plans for what the economy should look like based on an individual's subjective values and beliefs. f. Is concerned with how a variety of moral or ethical questions should be solved.

a. positive economics b. positive economics c. positive economics d. normative economics e. normative economics f. normative economics

Suppose the following represents the Canadian production possibilities frontier for two of its most important exports: maple syrup (in millions of bottles) and tree logs (in millions). Please choose the best answer for each question. a. Point H is not possible and is unobtainable, unless international trade occurs. possible, but not efficient. possible and efficient. not possible and is unobtainable, even if international trade occurs. b. Point M is not possible and is unobtainable, even if international trade occurs. not possible and is unobtainable, unless international trade occurs. possible, but not efficient. possible and efficient. c. Point Y is possible and efficient. unobtainable through production, but it may be possible for Canada to consume at point Y if international trade occurs. not possible and is unobtainable, even if international trade occurs. possible, but not efficient.

a. possible, but not efficient. b. possible and efficient. c. unobtainable through production, but it may be possible for Canada to consume at point Y if international trade occurs.

There are limited resources to satisfy all of society's wants. margins scarcity recession entrepreneurship trade-off business cycle Comparing the benefits and costs of engaging in an activity. margins scarcity resources financial capital trade-off recession

a. scarcity b. trade-off

Please select the economic term that is best described by each statement. a. People have limited resources to satisfy unlimited wants. recession scarcity business cycle tradeoffs entrepreneurship margins b. Everything you do requires giving up something (time, money, etc.). scarcity tradeoffs margins financial capital budgeting recession

a. scarcity b. tradeoffs

Please select the economic term that is best described by each statement. a. People have limited resources. scarcity recession entrepreneurship business cycle margins tradeoffs b. Everything you do requires giving up something (time, money, etc.). margins recession budgeting financial capital scarcity tradeoffs

a. scarcity b. tradeoffs

Consider the maximum amount of a product that sellers are willing and able to provide for sale over a relevant range of prices, holding all other factors constant. a. Economists call this sales volume. supply. maximal output. profit maximization. b. When the market price of a good increases, the amount that sellers are willing to offer for sale increases. Economists call this the maximal quantity curve. the law of large numbers. the price-quantity principle. the law of supply.

a. supply. b. the law of supply.

Select the correct definition of the term "comparative advantage." the ability to produce a good or service at a higher opportunity cost than another a nation offering more favorable trade policy with its allies than with other countries the ability to produce more of a good or service than another over a specified time period the ability to produce less of a good or service than another over a specified time period the ability to produce a good or service at a lower opportunity cost than another b. When trading with more developed countries, less developed countries have a comparative advantage in the production of all goods or services. less developed countries have a comparative advantage in the production of some goods or services. less developed countries do not have a comparative advantage in the production of any goods or services.

a. the ability to produce a good or service at a lower opportunity cost than another b. less developed countries have a comparative advantage in the production of some goods or services.

The price system helps agents allocate resources to satisfy human wants in the most efficient way possible. a. Prices incorporate information about each statement except how much every individual values a good. the most efficient use of resources. the number of firms in a competitive market. future market conditions. b. Which statement is not likely to occur in a competitive free market economy? suppliers increasing production in response to increased prices some firms exiting the market because they are unable to compete firms unable to adapt or innovate continuing to operate due to government support firms competing by adjusting their prices

a. the number of firms in a competitive market. b. firms unable to adapt or innovate continuing to operate due to government support

Demand is best described as the total satisfaction that consuming a good provides people at different prices. the quantity of a good or a service that people will offer for sale at different possible prices. the additional satisfaction derived from a quantity of goods and services obtained when income increases. the quantity of a good or service that consumers will substitute when the price of a good changes. the quantity of a good or a service that people are willing and able to purchase at different possible prices. b. The law of demand says that as the price of a good increases, buyers are willing and able to purchase less. higher prices cause buyers to demand more. buyers demand lower prices. as the price of a good decreases, buyers are willing and able to purchase less. higher prices cause less demand. c. In a market economy, there is ______ relationship between the price of a good and the amount of a good that buyers are willing and able to purchase.

a. the quantity of a good or a service that people are willing and able to purchase at different possible prices. b. as the price of a good increases, buyers are willing and able to purchase less. c. an inverse or negative

Suppose the University Health Center receives flu vaccinations at the beginning of each flu season and offers these vaccines to students at the market price of $20.00 each. Of course, college students have varying budgets—some have money to spare, while others have difficulty meeting basic needs. Additionally, some students have pre‑existing conditions, such as asthma or diabetes, that place them at high risk for the flu. a. Who will receive the vaccines if the University Health Center sells them at the $20.00 market price? the students who most want them the students who most need them the students who pay $20.00 for them b. Suppose the school sells all of its vaccines at the market price of $20.00. What does the school maximize? fairness effciency c. Suppose now that the school wishes to ensure that no students with diabetes or asthma go without the drug, owing to an inability to pay for it. Because the Health Center does not know the budget of each student, it decides to offer vaccines free to students who can provide a doctor's note stating that they have a pre‑existing condition. The school is now seeking a greater degree self‑interest. fairness. efficiency.

a. the students who pay $20.00 for them b. effciency c. fairness.

Suppose the University Health Center receives flu vaccinations at the beginning of each flu season, and that they offer these vaccines for the market price of $20.00 each. Assume that college students have varying budgets. Some have some money to spare, some are on a very tight budget. Keep in mind that some students have pre‑existing conditions, such as asthma and diabetes, that place them at high risk for the flu. a. Who will receive the vaccines if the University Health Center sells them for the $20.00 market price? the students who most need them the students who will pay $20.00 for them the students who most want them b. Suppose the school sells all of its vaccines at the market price of $20.00. What has it managed to maximize? efficiency fairness social interest c. Suppose now that the school wishes to make sure no students with diabetes or asthma go without the drug because they cannot afford it. Because it does not know the budget of each student, the Health Center decides to offer vaccines free to students who can provide a doctor's note stating they have a pre‑existing condition. The school is now seeking a greater degree of self‑interest. efficiency. fairness.

a. the students who will pay $20.00 for them b. efficiency c. fairness.

The University Health Center receives 500 flu vaccinations at the beginning of each flu season. Suppose they offer these vaccines for $20.00 each. Assume that college students have varying budgets, some have some money to spare, some are on a very tight budget. Some students have pre‑existing conditions, such as asthma and diabetes, that place them at high risk for the flu. a. Who will receive the vaccines if the University Health Center sells them for this price? the students who will pay for them at that price the students with asthma and diabetes the students who most want them the students who most need them b. Suppose the school sells all of the vaccines at this price. The school is now seeking a greater degree of? Choose the best answer. c. Suppose now that the school wishes to make sure no student with diabetes or asthma goes without the drug because they cannot afford it. Because they do not know the budgets of each student, the Health Center decides to offer them free to students who can provide a doctor's note stating that they have asthma or diabetes. What has it managed to achieve? Choose the best answer.

a. the students who will pay for them at that price b. allocative efficiency. c. equity

Which event would shift the supply curve for coffee to the left? an increase in subsidies for coffee production an increase in the number of coffee farmers an increase in the price of coffee an increase in the minimum wage

an increase in the minimum wage

In the market for cable television, fewer people are subscribing to cable while the cost of providing cable television has increased. As a result, since the drop in cable subscribers has had a bigger impact on the market, we can expect a(n) decrease in the equilibrium price and quantity of cable television. increase in the equilibrium price and quantity of cable television. unknown change in the equilibrium quantity but a decrease in the equilibrium price of cable television. unknown change in the equilibrium price but a decrease in the equilibrium quantity of cable television.

decrease in the equilibrium price and quantity of cable television.

Evaluate the statement. "Economics is everything to do with money." The statement is false. Economics is the study of how businesses make choices. true. Economics is the study of money. true. All economic decisions involve money in some way. false. Economics is the study of unemployment and output. false. Economics is the study of decision-making given scarcity.

false. Economics is the study of decision-making given scarcity.

Milk and cereal are an example of complementary goods. Which definition best describes this relationship? goods related in such a way that an increase in price of one leads to an increase in the demand for the other goods related in such a way that an increase in quantity demanded of one leads to a increase in the price of the other goods related in such a way that an increase in price of one leads to a decrease in the demand for the other goods related in such a way that an decrease in price of one leads to a decrease in the demand for the other

goods related in such a way that an increase in price of one leads to a decrease in the demand for the other

A shift to the right of the demand curve could be caused by a(n) (Figure: Demand for Shoes) increase in the price of a complement. decrease in the price of a substitute. decrease in tastes or preferences. increase in income if the good is a normal good.

increase in income if the good is a normal good.

In the United States, heavy street‑cleaning machines driven by one person sweep the streets. In China and India, groups of people use brooms to do the same job. Explain why this difference in techniques occurs. The difference occurs because labor resources in China and India are relatively more abundant than capital. the United States has a lower opportunity cost of using labor resources for street cleaning. China and the United States are both in autarky and only the U.S. produces machinery. China's labor force does not experience diminishing returns for street cleaning.

labor resources in China and India are relatively more abundant than capital.

Holding everything else constant, producers are willing to offer more units for sale when the price at which they can sell their product increases. This concept is known as the law of supply. law of one price. profit-maximizing condition. maximal output.

law of supply.

At the 2015 White House Science Fair, a $240 million private-public initiative was announced for the purpose of boosting STEM (science, technology, engineering, and math) education, as the United States continues to fall behind other industrialized nations in student achievement in these fields. How would spending on STEM initiatives today, which leads to higher costs in the near term, pay off in future benefits to the economy? Investing in education will lead to long-term productivity. cause the demand for education to increase and decrease the availability of programs for consumers to enjoy. only lead to short-term productivity. increase costs today and not provide many benefits in the future.

lead to long-term productivity.

In 2017, a $500 million private‑public initiative was announced for the purpose of boosting STEM (science, technology, engineering, and math) education, as the United States continues to fall behind other industrialized nations in student achievement in these fields. How would spending on STEM initiatives today, which leads to higher costs in the near term, pay off in future benefits to the economy? Investing in education will lead to long‑term productivity gains. increase costs today and not provide many benefits in the future. only lead to short‑term productivity gains. cause the demand for education to increase and decrease the availability of programs for consumers to enjoy.

lead to long‑term productivity gains.

Megan has a 11 hr gap in her course load for the fall semester. There are two courses available for her to take at that time: reading piano sheet music and beginning rock climbing. She does not have any experience with piano or rock climbing. In the end, she decides to enroll in the rock climbing course, despite her fear of heights. Identify which activity exhibits a potential trade-off with enrolling in rock climbing. learning rock climbing skills learning to read piano sheet music overcoming her fear of heights none of the above

learning to read piano sheet music

Economists generally have _____ to say about equity than efficiency.

less

What is the main goal of policymakers in regard to the business cycle? mitigate recessions while allowing economic booms to run their course maximize growth by fighting recessions and promoting economic booms limit the volatility of the business cycle by reducing the size of both recessions and economic booms increase the magnitude of both recessions and economic booms since the net result is higher economic growth allow recessions to self-correct while actively preventing economic booms from growing into bubbles

limit the volatility of the business cycle by reducing the size of both recessions and economic booms

If the demand for iPhones rises as incomes increase, then the iPhone is a(n) _____ good. inferior supply abnormal normal

normal

Tax policy is partly based on the notion that markets never work efficiently. governments must always run a budget surplus. people respond to financial incentives. high taxes are preferable to low taxes.

people respond to financial incentives.

Full employment on a production possibilities frontier (PPF) is shown by points on the PPF. an inefficient use of resources. points inside the PPF. points outside the PPF.

points on the PPF.

In 2014, small motorized skateboards (known as hoverboards) saw a huge spike in sales as their popularity rose and more companies started producing them. In 2015, a safety risk was exposed when it was reported that over 100 incidences of hoverboards catching fire or exploding occurred, causing injuries. This led to a massive recall of hoverboards as manufacturers had to retool their products and fix existing products. Also, it led to a ban on hoverboards on airlines and in many schools. This massive recall and ban on hoverboards affected the equilibrium price and quantity of hoverboards. As a result, both the equilibrium price and quantity decreased. quantity fell and the effect on price was indeterminate. both the equilibrium price and quantity increased. price fell and the effect on quantity was indeterminate.

quantity fell and the effect on price was indeterminate.

Suppose the market for tomatoes is in equilibrium, and events occur that simultaneously shift both the demand and supply curves to the right. If this is the only information you have, what can you say about how the equilibrium price or quantity would be affected? The equilibrium price and quantity would both decrease. quantity would increase, whereas the direction of the change in equilibrium price would be indeterminate. price would increase, whereas the direction of the change in equilibrium quantity would be indeterminate. price and quantity would both increase.

quantity would increase, whereas the direction of the change in equilibrium price would be indeterminate.

If the quantity demanded is greater than the quantity supplied some consumers will offer to pay more for the product. firms will decrease production to drive up the price. a surplus results. firms will reduce the price.

some consumers will offer to pay more for the product.

Drivers of economic growth include consumption but not specialization. specialization but not international trade. international trade but not consumption. specialization, consumption, and international trade.

specialization, consumption, and international trade.

The maximum amount of a product that sellers are willing and able to provide for sale over a particular period at various prices, ceteris paribus, is called profit. maximal output. supply. sales volume.

supply

Wheat and Autos in the United States and South Korea) According to the graph X axis was suto mobiles and Y axis wheat US HAD X AXIS AT 100 AND Y AXIS AT 100 SOUTH KOREA HAD X AXIS AT 80 AND Y AXIS AT 40 he United States should import automobiles and export wheat. the United States should produce both products because it has an absolute advantage in both. South Korea should produce neither product because it does not possess an absolute advantage in either. the United States should export automobiles and import wheat.

the United States should import automobiles and export wheat.

What is the main goal of macroeconomic policy activism? to increase aggregate demand by expanding the size of the federal government to increase government debt to increase aggregate demand through tax cuts to ensure that only politicians that believe in Keynesian economics get elected to reduce the severity of business cycles

to reduce the severity of business cycles

Climate change has entered economic discussion, especially among industrialized countries such as the United States and those in Europe. Critics, however, argue that more environmental regulations restrict economic growth. How do wealthy countries react to this tradeoff when compared to poor countries? Wealthy countries do not have climate change problems; therefore, the tradeoff is minimal. understand the tradeoff and concerns about the environment, and so climate change becomes more of a priority. have the money and resources to deal with environmental regulations whereas poor countries do not. care more about the price of the regulations and avoid climate change at all costs.

understand the tradeoff and concerns about the environment, and so climate change becomes more of a priority.

At your local family fun center, miniature golf is $12 per person for unlimited rounds in a day, while each go-kart session is $8. If you played 3 rounds of miniature golf and rode the go-karts 3 times, what was the marginal cost of the 3rd round of miniature golf? What was the marginal cost of the 3rd go-kart session? $12 for miniature golf and $24 for go-karts $35 for miniature golf and $24 for go-karts $0 for miniature golf and $8 for go-karts $0 for miniature golf and $24 for go-karts

$0 for miniature golf and $8 for go-karts

The accompanying production possibilities frontiers (PPF) represent hypothetical levels of production for Honduras and Brazil. Assume the two countries are initially producing and consuming without trade at point A on each of their PPFs. (GRAPH O.N) Suppose Brazil and Honduras decide to trade. Each country specializes in producing the good for which it has a comparative advantage. Suppose that the terms of trade are set at 6 tons of bananas equals 4 tons of steel. After specialization, Honduras continues to consume 2 tons of bananas per day and Brazil continues to consume 5 tons of steel per day. A. Place the points on each graph to label the post-trade consumption in each country. B. What will each country produce? Honduras will produce both goods. Honduras will produce steel, and Brazil will produce bananas. Brazil will produce both goods. Honduras will produce bananas, and Brazil will produce steel.

A. Honduras PPF (4,2) Brazil PPF (5,6) B. Honduras will produce bananas, and Brazil will produce steel

Which describes the fairness-efficiency trade‑off? There is always a more equitable outcome that is also more efficient. Actions intended to make economic outcomes fairer can cause efficiency to decrease. The least efficient economic outcome is the fairest outcome. Government intervention can increase efficiency in a market.

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

Which statement describes the equity-efficiency trade‑off? Government intervention can increase efficiency in a market. Actions intended to make economic outcomes fairer may cause efficiency to decrease. The least efficient economic outcome is the fairest outcome. There is always a more equitable outcome that is also more efficient.

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

Which of the following is the best definition of the opportunity cost of a decision? Benefits from the best foregone alternative. The sum of all benefits from all foregone alternatives. Actual financial cost of a decision. The difference between the benefits of the first and second best choices.

Benefits from the best foregone alternative.

Which statement is NOT true of economic model building? Economic models always reach verifiable results. Adding more complexity to models does not always provide greater insights. There may be exceptions to economic models. Economic models provide generalizations about economic behavior.

Economic models always reach verifiable results.

Many companies offer employees health savings accounts (HSAs) instead of traditional health care plans. HSAs provide each employee with money (usually between $500 and $1,000 per year) that can be used for any health care expense but then require employees to cover a much higher portion of expenses beyond that. Which of the following describes an issue of equity that arises from this policy? Health saving accounts will cause greater harm to low‑income employees because they will bear a greater burden covering health care expenses. Health savings accounts allow employees to use and allocate their savings into health care expenses that best satisfies their needs. None of the above describe an issue of equity. Health savings accounts are preferred over traditional health care plans because they are easier to set up.

Health saving accounts will cause greater harm to low‑income employees because they will bear a greater burden covering health care expenses.22222

Which statement illustrates the law of demand? Lindsay offers to buy more sticks of chewing gum at $1 than at $2. Marcus offers to sell more sticks of chewing gum at $1 than at $2. Marcus offers to sell more sticks of chewing gum at $2 than at $1. Lindsay offers to buy more sticks of chewing gum at $2 than at $1.

Lindsay offers to buy more sticks of chewing gum at $1 than at $2.

If Mary can bake a cake at a lower opportunity cost than Sarah can, then: Mary can bake more cakes than Sarah can in a given amount of time. Sarah has a comparative advantage in baking cakes. Mary should not bake cakes. Mary has a comparative advantage in baking cakes.

Mary has a comparative advantage in baking cakes.

Is a decision to spend four years of one's life and tens of thousands of dollars earning a college degree based on an incentive? No. College has such obvious benefits that incentives are not necessary. Yes. The potential long-term benefits of college more than offset the costs of college. No. There is no incentive, since the student must pay a price to attend college. Yes. Although the costs of college usually exceed what one earns while attending college, various social pressures incentivize people to attend college.

Yes. The potential long-term benefits of college more than offset the costs of college.

The figures illustrate the production possibilities available to Kate and Sarah with eight hours of labor in their bakery. Answer the questions according to these figures. O.N a. Kate has a comparative advantage in neither good. bread. cake. both goods. b. Sarah has a comparative advantage in both goods. neither good. cake. bread.

a. cake b. bread

What does the term ceteris paribus mean in this context? allowing all economic variables to change that the basic concepts of economics do not apply holding all else equal (unchanged) that the statement is easy to understand and does not require complex analysis b. Why, if at all, is the ceteris paribus condition important in economic analysis? It enables the analyst to simultaneously ascertain the roles of all relevant variables in producing a given outcome. It enables the analyst to isolate the role of one variable in producing a given outcome. It is not important.

a. holding all else equal (unchanged) b.It enables the analyst to isolate the role of one variable in producing a given outcome.

Indicate whether each item describes a primary goal of macroeconomic policy. a. Low unemployment b. Eliminating political conflict c. To set the optimal price for a pound of peaches d. Low inflation e. To calculate how much urban residents are willing to pay to protect biodiversity f. Rising living standards

a. primary macroeconomic policy goal b. not a primary macroeconomic policy goal c. not a primary macroeconomic policy goal d. primary macroeconomic policy goal e. not a primary macroeconomic policy goal f. primary macroeconomic policy goal

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. O.N Japan has a(n) ___________________ advantage in producing ______________________ comparative, digital cameras and personal computers absolute, personal computers comparative, digital cameras absolute, digital cameras

absolute, personal computers

The Perfectly Popped Popcorn Company is trying to increase the market price for popcorn. What is one strategy it can use? lower production costs lobby the government to cut taxes on businesses advertise or change the product to make it more desirable increase the amount of resources devoted to the production of the good

advertise or change the product to make it more desirable

Which of the four options best represents specialization and its relationship with trade? absolute advantage economic crises comparative advantage all the above

comparative advantage

Explain the important difference between a straight-line PPF and a PPF that is concave to (bowed away from) the origin. A straight-line PPF has constant opportunity costs, whereas a bowed PPF has decreasing opportunity costs. decreasing opportunity costs, whereas a bowed PPF has constant opportunity costs. increasing opportunity costs, whereas a bowed PPF has constant opportunity costs. constant opportunity costs, whereas a bowed PPF has increasing opportunity costs.

constant opportunity costs, whereas a bowed PPF has increasing opportunity costs.

The construction of an iron bridge in the town of Ironbridge provided an improvement in technology. Modify the graph to reflect this change, then answer the question that follows. The town of Ironbridge experiences decreasing opportunity costs. constant opportunity costs. increasing opportunity costs.

decreasing opportunity costs. - (shift curve up/ outward)

Land is not a scarce resource. earns rent. is only agricultural. earns interest.

earns rent.

Two-Buck Chuck wine is an example of the results of a(n) excess supply of California grapes, which caused the price to drop. decrease in the demand for imported wines, which caused the price of California wines to increase. decrease in the supply of imported wines, which caused the price of California wines to increase. excess demand for California wines, which caused the price to drop.

excess supply of California grapes, which caused the price to drop.

If a country wants to maximize its GDP, it should always export goods in which it has an absolute advantage. export goods in which it has a comparative advantage. import goods in which it has a comparative advantage. import goods in which it has an absolute advantage.

export goods in which it has a comparative advantage.

Economic models must fully reflect reality

false

When consumers have no choice but to buy from one firm

government regulation is usually used to protect consumers.

If specialization and trade create a win-win situation in which two countries gain, why is there often opposition to trade agreements and globalization? Opposition arises because trade increases prices for most goods in the economy. countries that have an absolute disadvantage in goods undergo periods of decline before the benefits of trade begin. although society as a whole benefits from trade, trade costs domestic jobs in net terms. groups that produce products in which other counties have comparative advantages suffer.

groups that produce products in which other counties have comparative advantages suffer.

if a strong economic recovery boosts average incomes, what would happen to the equilibrium price and quantity of a normal good and of an inferior good? The equilibrium price and quantity of a normal good would fall; those of an inferior good would also fall. of a normal good would rise; those of an inferior good would also rise. of a normal good would fall; those of an inferior good would rise. of a normal good would rise; those of an inferior good would fall.

of a normal good would rise; those of an inferior good would fall

At some point in the future, a country that produces more capital goods than consumer goods will have a larger PPF than a country that produces more consumption goods. This occurs because producing consumption goods is an investment that helps stimulate the economy. capital goods are more expensive than consumption goods. the PPF for consumption goods will always be greater than the PPF for capital goods. producing capital goods is an investment that helps stimulate the economy.

producing capital goods is an investment that helps stimulate the economy.

A decrease in supply causes the equilibrium price to _____ and the equilibrium quantity to _____. fall; rise rise; rise rise; fall fall; fall

rise; fall

Demand for tickets to the Super Bowl has increased in recent years. Assume the capacity of stadiums that host the Super Bowl has not changed significantly over the years. The growth in demand would most likely lead to declining Super Bowl television audiences. larger numbers of tickets sold. rising ticket prices. increased Super Bowl attendance.

rising ticket prices.

During the 2007-2009 recession, consumer spending on dogs and cats fell, even though national income increased. rose because national income increased. rose, even though national income declined. fell because national income declined.

rose, even though national income declined.

A common definition of "economics" is that it is the study of

the allocation of scarce resources to satisfy competing wants.

A lawyer can argue a case in court for one hour and make $300. She could alternatively use that hour of time to type a legal brief in her office. What is the opportunity cost of her typing the legal brief? $300, since that is the amount she could have made by arguing a case in court nothing, since she would never type a legal brief nothing, since she would always hire an administrative assistant to type for her $13.50, the average hourly wage for a typist

$300, since that is the amount she could have made by arguing a case in court

Corn and Oil in the United States and the United Kingdom) Refer to the graphs for the United States and the United Kingdom. If the starting point is a, what is the opportunity cost of the United States producing 15 more barrels of oil? 15 bushels of corn 20 bushels of corn 5 bushels of corn 10 bushels of corn

15 bushels of corn

What is the difference between a positive question and a normative question?

A positive question concerns what is; a normative question concerns what should be.

The graph below shows a production possibility frontier (PPF) for cheese and bread. Place each point to illustrate the indicated situations. a. efficient and maximum production of cheese b. efficient with a high opportunity cost for cheese c. inefficient output combination d. efficient with a high opportunity cost for bread e. efficient and maximum production of bread f. unattainable production combination b. Assume point D represents the socially optimal point. Point D illustrates: opportunity efficiency. allocative efficiency. normative efficiency. marginal efficiency.

A. Move points to.... a- (0,16) b- (4,15) c- (6,9) d- (15,3) e- (16,0) f- (14,15) B. allocative efficiency.

Assume Aaron and José each own a small ranch, and each produces milk and cheese. One of them is better than the other at producing both milk and cheese (but we do not know who). Which of the statements cannot be true regarding absolute or comparative advantage? José could have a comparative advantage in producing cheese. José could have an absolute advantage in producing both milk and cheese. Aaron could have an absolute advantage in producing milk. José could have an absolute advantage in producing cheese. Aaron could have a comparative advantage in producing both milk and cheese.

Aaron could have a comparative advantage in producing both milk and cheese.

Which example represents incentives for decisions? tax deductions for education saving accounts All of these are incentives. investment tax credits for businesses tax deductions for individual retirement accounts

All of these are incentives.

Which of the following scenarios involves no opportunity cost? It's Friday night and you stay up late talking and hanging out with your friends. You eat lunch with the chemistry club, which is giving out free pizza for lunch to all who come to their table to get it. Naomi, age 8, is at a bookstore and chooses to buy a book about a young wizard instead of buying a math textbook that she would probably never open. Chez Moi and Chez Nous, two premiere French restaurants with three Michelin stars, both offer you a full-time sous chef job at the same salary. You are ecstatic because you know it is a win-win scenario and choose to work for Chez Nous. All of these scenarios have an opportunity cost.

All of these scenarios have an opportunity cost.

Who developed the theory of comparative advantage?

David Ricardo

Prices typically contain more useful information for sellers than for buyers.

False

Which scenario would least likely change an individual's behavior? In an effort to make people eat healthier, the city of Bakersville tells its residents to eat wheat bread instead of white bread. A basketball team manages to sign a trio of famous basketball stars who then clamor for other players to come join their team to win a guaranteed championship. The city of Saskatoon chooses to give its residents a penny for each soda can they recycle in an effort to promote environmental awareness. The country of Ravamolk enacts a policy to fine companies 20% of their earnings if the safety standards in their factories do not reach acceptable work conditions.

In an effort to make people eat healthier, the city of Bakersville tells its residents to eat wheat bread instead of white bread.

You normally stay at home on Wednesday nights and study. However, next Wednesday night, your best friend is having a big birthday party. What might be the opportunity cost of going to the party? The value of a concert that you could have attended had you neither gone to the party nor spent the night studying. Unforeseen regret you feel the next day over having consumed too much cake at the party. The price of a gift you purchase for your friend. The benefit (such as a higher homework or exam grade) that you would have gained from studying that night.

The benefit (such as a higher homework or exam grade) that you would have gained from studying that night.

China's rising middle class has resulted in a surge of luxury food imports such as lobsters from the United States. China's demand for U.S. lobsters is so great that fishermen in Maine (where most U.S. lobsters are caught) have a tough time keeping up. Which of the following best explains how China's increased demand for lobsters affect consumers and producers of lobsters in the United States? An increase in China's demand for U.S. lobsters will only affect consumers of lobsters in the U.S. who will experience a rise in the price for lobsters. Producers will not be impacted because their production technology will not change. only affect U.S. fishermen who will sell more lobsters at a higher price. Consumers of lobsters in the U.S. will not experience any impact. not have an impact on either producers or consumers of lobsters in the United States. benefit U.S. fishermen who will sell more lobsters at a higher price. Consumers of lobsters in the United States will experience a rise in the price for lobsters.

benefit U.S. fishermen who will sell more lobsters at a higher price. Consumers of lobsters in the United States will experience a rise in the price for lobsters.

If both the supply of and the demand for a good increase simultaneously, and if demand grows relatively less than supply, then price will be indeterminate and quantity will rise. fall and quantity will rise. be indeterminate and quantity will fall. rise and quantity will fall.

fall and quantity will rise.

Generally speaking, private markets are the most efficient institutions for providing goods and services.

false

In general, economic markets contain only legal activity conducted by incorporated businesses.

false

Production efficiency is defined as producing the mix of goods and services most desired by society.

false

The "what" question of the three basic questions is "What price should be charged for a good?"

false

In 1999, enrollment at private for-profit institutions represented approximately 2.8% of total enrollment at postsecondary institutions. In 2019, enrollment at private for-profit institutions jumped to approximately 5% of total enrollment. Consider what factors might explain why private for-profit institutions have seen higher enrollment growth rates over the past two decades than other categories of postsecondary institutions. A possible explanation is that they tend to target working and nontraditional students who are seeking more job-specific degrees. increased demand for education at public institutions has made such institutions unaffordable. more students are seeking postsecondary degrees at all types of institutions for higher learning. they offer subsidies to students who are in-state residents.

they tend to target working and nontraditional students who are seeking more job-specific degrees.

A surplus exists when quantity supplied exceeds quantity demanded. at the market-clearing price. any time the market is out of equilibrium. when quantity supplied is less than quantity demanded.

when quantity supplied exceeds quantity demanded.

Consider four of Aesop's fables. 1. A lion and a bear seized a lamb at the same moment, and fought fiercely until they collapsed, exhausted. A fox ran in, seized the lamb, and quickly ran off. The lion and the bear watched him and said, "Just our luck, that we fought, only to serve the reward up to the fox." 2. A hound chased a rabbit, but gave up after a long run. A shepherd watched and said, "The rabbit is the better runner." The hound replied, "I only ran for dinner. He ran for his life." 3. As Patty walked to market, her milk pail on her head, she planned what she would do with the money she earned. "I'll buy hens, and sell their eggs. Then I'll buy a new dress! Polly will be jealous, but I shall just toss my head like this." As she tossed her head back, the pail fell off, and all the milk was spilt. 4. One day a farmer found an egg of pure gold in the goose's nest. The goose laid a golden egg every morning, and the farmer soon grew rich - and greedy. Thinking he would get all the gold at once, he killed it, but found no gold inside. Which fable from Aesop best illustrates the moral idea that incentive spurs effort? A Farmer Who Raised Geese Patty the Milkmaid A Lion and a Bear A Hound Chased a Rabbit

A Hound Chased a Rabbit

Thinking at the margin is defined as maximizing a firm's or individual's well-being.

False

The table shows the units of output a worker can produce per month in Germany and Korea for two different goods: televisions and personal computers. Use this table to answer the question. O.N Which of the statements is true? Korea has a comparative advantage in the production of televisions, while Germany has a comparative advantage in the production of personal computers. Korea has a comparative advantage in the production of both goods. Germany has a comparative advantage in the production of televisions, while Korea has a comparative advantage in the production of personal computers. Germany has a comparative advantage in the production of both goods.

Germany has a comparative advantage in the production of televisions, while Korea has a comparative advantage in the production of personal computers.

Entrepreneurs take no risks if they are smart. combine and manage inputs of land, labor, and capital. earn wages for their work. earn rent for their work.

combine and manage inputs of land, labor, and capital.

If supply of a good increases and at the same time demand for that good decreases, equilibrium price decreases and equilibrium quantity is indeterminate. is indeterminate and equilibrium quantity decreases. is indeterminate and equilibrium quantity increases. increases and equilibrium quantity decreases.

decreases and equilibrium quantity is indeterminate.

At Tokyo Disneyland, the quantity of rides supplied at the famous theme parks is well below the quantity demanded by the public. In general, determinants of supply include all the factors below, except producers' expectations income taxation technological change

income

In a competitive market, all of the choices along the production possibility frontier display ________________ efficiency, while the specific choice on the frontier that society picks is the one with _______________ efficiency. productive; allocative allocative; productive allocative; allocative productive; productive

productive; allocative

The supply curve shows a positive relationship between price and quantity supplied. slopes downward and to the right. shows that producers can charge whatever price they wish for their products. shows a negative relationship between price and quantity supplied.

shows a positive relationship between price and quantity supplied.

Kate and Sarah own a bakery together. The two figures illustrate the production possibilities available to them if they work at their bakery for 8 h a day. Answer the question using these figures. O.N If Kate and Sarah both specialize in the good in which they have a comparative advantage, the total production of bread will be 4 loaves, and the total production of cake will be 9 units. total production of bread will be 16 loaves, and the total production of cake will be 17 units. total production of bread will be 12 loaves, and the total production of cake will be 8 units. total production of bread will be 8 loaves, and the total production of cake will be 8.5 units.

total production of bread will be 12 loaves, and the total production of cake will be 8 units.