ECON 2301 - exam 1-- Giant Aryani

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The economic way of thinking is best described as

an analytical framework enabling one to reach informed conclusions.

Specialization and comparative advantage

All of the above.

The primary purpose of economics is to understand how people make

Choices

Consider the following statement based on a positive economic analysis that assumes that all other things remain​ constant: Falling gasoline prices will result in additional vacation travel. Which of the following​ (initially assumed​ constant) could occur and thus offset the stated​ outcome?

An increase in hotel taxes at popular resorts.

Which of the following is a true statement about​ self-interest as used in the study of​ economics

Any action can be based on​ self-interest if the person has some reason for the action.

Which of the following statements concerning economic models is​ FALSE?

Economic models are based on pure fact and no assumptions.

Elizabeth can make 5 dozen cupcakes or 1 chocolate cake in one hour. Steven can make 3 dozen cupcakes or 1 chocolate cake in one hour. Based on this information, which of the following is a true statement

Elizabeth has a comparative in making cupcakes.

Which of the following statements about economic models is​ true

Every economic model is based on a set of assumptions.

Which of the following statements is​ true

Everyone can benefit when people specialize where they have a comparative advantage and then trade with each other.

Which of the following is the best example of​ scarcity?

Fred only gets a​ 1-hour lunch break and each day must decide between working out at the gym or socializing with his colleagues.

Suppose a government official is trying to decide whether or not to allow more immigration. Which of the following is not an aspect of the economic way of thinking that would apply in this decision-making process

Flipping a coin.

Why do most people choose to specialize in a narrow set of skills for their​ work, rather than to learn a little bit about several varied fields of​ endeavor?

It allows them to earn more income by being more productive.

Which of the following is always true of rational​ behavior

It always entails pursuing​ own's own best interest.

What is the type of mechanism that answers the basic economic questions through a decentralized decision making​ process?Market system

Market system

Steve can​ wash, fold, and iron a basket of laundry in two hours and prepare a meal in one hour. HisHis roommate MikeMike can​ wash, fold, and iron a basket of laundry in three hours and prepare a meal in one hour. The absolute advantage in laundry is held by The comparative advantage in meal preparation is held by

Steven mike

Which of the following is a normative economic​ statement

Teenage unemployment is too high

Which of the following statements about a movement along the production possibilities curve in the figure at right is​ FALSE

There are no opportunity costs involved in choosing one point on the curve over all other points.

The three fundamental economic questions that a nation addresses in order to allocate​ society's scarce resources include all of the following ​except:

Why will the items be​ produced

The threat of a large fine for failure to pay income taxes is an example of

a negative incentive to get all people to pay taxes.

Which of the following is NOT a factor of​ production?

a product

The basic economic problem is

a situation of limited resources and unlimited wants.

Consider the following​ statements, based on a positive economic analysis that assumes that all other things remain constant. For​ each, list one other thing that might change and thus offset the outcome stated. a. Increased demand for laptop computers will drive up their price. A. An improvement in computer manufacturing technology. Your answer is correct.B. An increase in consumer income. C. A decrease in the supply of laptop computers. b. Falling gasoline prices will result in additional vacation travel. A. The economy enters a recession with increased unemployment. Your answer is correct.B. Consumer incomes increase. C. The airlines engage in a price war that leads to lower airfares. c. A reduction of income tax rates will result in more people working. A. Lower interest rates lead to a boom in housing construction. B. Congress passes a huge appropriations bill leading to increased government spending. C. The foreign exchange value of the dollar increases causing domestic exports to decline.

a-a-c

One major assumption of economics is that people

act as if they systematically pursue selfminus−interest.

"Wants" as an economic concept includes

both material and nonmaterial desires.

​Self-interest relates to

both monetary and nonmonetary objectives

​Self-interest

can involve any action that makes a person feel better​ off, such as charitable contributions

Economists assume people behave​ rationally, which means that people

do not intentionally make decisions that make themselves worse off

According to​ economists, when two people make exactly the opposite​ decision

each person evaluates the situation according to​ his/her individual​ self-interest.

Economic goods are

goods that are scarce.

The rationality assumption implies that

individuals will not intentionally make decisions that leave them worse off.

A decision made by a rational person

is intended to make the person better off.

Canada goes to considerable lengths to protect its television program and magazine producers from U.S. competitors. The United States often seeks protection from food imports from Canada. From an economywide​ viewpoint, these efforts are

misguided because the enhanced output from specialization based upon comparative advantage is restricted

Consider the table below. The​ student's set of opportunities is now as​ follows Using your graph​, does the PPC illustrate the law of increasing additional​ cost Using the data in the table above​, the opportunity cost to this student for the additional amount of study time on economics required to move her grade from 60 to 70 is ........... biology points.

no

The ceteris paribus assumption means

other things equal

It has been noted that when the price of a good​ increases, people purchase less of the good. This is an example of

positive economic analysis.

To be​ useful, a model must

predict more accurately than other models that have been developed.

Farmer McDonald has 100 acres of land on which he can grow soybeans or corn. An acre of land yields 200 bushels of soybeans or 100 bushels of corn or some combination of both. The accompanying figure refers to farmer​ McDonald's

production possibilities curve.

Economists assume people behave

rationally

In economic, the concept that individuals are motivated by self-interest respond predictably to opportunities for gain is known as

rational​ self-interest.

Opportunity cost exists because of

scarcity.

Economic growth can be pictured in a production possibilities curve diagram by

shifting the production possibilities curve out.

Whenever productive resources are used to make capital goods

society is giving up current consumption.

The division of productive activities among persons and regions so that no one individual or region is totally​ self-sufficient is known as

specialization

One reason that economists use microeconomics as the basis of macroeconomic analysis is

that all choices are made by individuals and firms.

All of the following are aspects of microeconomics EXCEPT

the average level of prices of all goods and services produced in a country in a year.

An economic model is developed from a set of assumptions about consumer behavior and predicts that people will buy less of a good the higher the price of the good. Empirical testing of this model would involve

the collection of data to evaluate the usefulness of the model.

Some people claim that the​ "economic way of​ thinking" does not apply to issues such as health care. All of the following choices clearly demonstrate how economics applies to this​ issue, except when

the individual decides against health care as it may make him better off.

John and Mary work at a bakery. John can decorate either 10​ ice-cream cakes or 4 wedding​ cakes; Mary can decorate either 8​ ice-cream cakes or 2 wedding cakes.

the opportunity cost of decorating an​ ice-cream cake for John is​ 2/5 wedding cake.

Which of the following would be a topic of study in Which of the following would be a topic of study in ​macroeconomics​

the output of the United states

People may appear to use rules of​ thumb, as suggested by the assumption of bounded​ rationality, even though they may really be behaving in a manner suggested by the rationality assumption if

they face persistently predictable range of choices for a period of time.

To which of the following​ household-type(s) does the phrase​ "unlimited wants LOADING... and limited resources LOADING... ​" ​apply

​I, II, and III.


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