Econ Exam #1

A choice made ________ is a choice whether to do a little more or a little less of something.

at the margin

Manny is attending college and majoring in economics. Manny is improving his:

human capital.

Which of the following is the best example of making a choice at the margin?

*A. drinking another cup of coffee B. buying a new car C. quitting your job D. attending college

Khalil is offered a free ticket to the opera. His opportunity cost of going to the opera is:

A. the price listed on the ticket. *B. whatever Khalil would have done had he not gone to the opera. C. the price listed on the ticket or whatever Khalil would have done had he not gone to the opera. D. zero—the tickets were free.

The cost of leaving the skating championship before it ends is ________, while the cost of staying for the entire match is ________.

C. the opportunity cost of not seeing the perfect "10" performance that happens; the opportunity cost of what else you could have done during that time

If an economy has to sacrifice only one unit of good X for each unit of good Y produced throughout the relevant range, then its production possibility frontier has:

a constant, negative slope.

The problem of scarcity is confronted by

all societies

The production possibility frontier will shift outward for all of the following reasons except:

an increase in the unemployment rate.

If an economy has to sacrifice increasing amounts of good X for each unit of good Y produced, then its production possibility frontier is:

bowed out from the origin.

Which of the following can best be considered the resources used in the production of computers?

computer engineers

Suppose the state of Oklahoma decides to produce only two goods, oil and football helmets. According to the production possibility frontier, as oil production increases, the production of football helmets will:

decrease.

All points on the production possibility frontier are:

efficient production points.

The production possibility frontier illustrates that:

if all resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced.

The fact that a society's production possibility frontier is bowed out or concave to the origin of a graph demonstrates the law of:

increasing opportunity cost.

All points inside the production possibility frontier represent:

inefficient production points.

All points outside the production possibility frontier are:

infeasible production points.

Consider a production possibility frontier for Iraq. If in 2014 Iraq's resources are not being fully utilized, Iraq will be somewhere ________ of its production possibility frontier.

inside

In movement along a production possibility frontier, the opportunity cost to society of getting more of one good:

is measured by the amount of the other good that must be given up.

If an economy is producing at a point on its production possibilities frontier:

it is efficient in production but not necessarily in allocation.

The economic way of thinking uses:

making choices at the margin.

If the state government allocates additional spending on education, the opportunity cost is:

measured in terms of the best alternative uses for that money.

In China, which of the following would not be a resource in the production of rice?

money

If an economy is producing a level of output that is on its production possibility frontier, the economy has:

no idle resources and is using resources efficiently.

Economists usually make the assumption that production is subject to increasing opportunity costs because:

not all resources are equally suited to producing every good.

Which is not an example of a resource?

production

The production possibility frontier is bowed out from the origin because:

resources are not equally suited for the production of both goods.

One of the controversies surrounding America's energy markets is the trade-off between energy production and clean air. Assuming clean air has value, the United States will be on its production possibility frontier if and only if:

resources used to produce clean air and energy are being fully utilized.

We are forced to make choices because of:

scarcity.

Technological improvements will:

shift the production possibility frontier outward.

A new startup airline is offering free round-trip tickets to anywhere to the first 600 people who enter the office on the airline's first day of business. You arrive 24 hours before they are scheduled to open to be sure to get the free tickets, and you buy food from vendors while waiting in line. The cost of the tickets to you is:

the cost of food while you wait in line and the opportunity cost of your time.

The economy's factors of production are not equally suitable for producing different types of goods. This principle generates:

the law of increasing opportunity cost.

A production possibility frontier that is a straight line sloping down from left to right would suggest that:

the opportunity costs of the products are constant.

When a chef creates a dinner plate of food for a customer, which of the following represents the physical capital resource?

the oven

How people choose among the alternatives available to them is:

the study of microeconomics.

Opportunity cost is:

the value of the best alternative forgone in making any choice.

The basic concern of microeconomics is

to study the choices people make

A production possibility frontier illustrates the ________ facing an economy that ________ only two goods.

trade-offs; produces

The cost of going to college is:

tuition, the cost of books, and forgone income.

While buying refreshments for an upcoming party, you notice that a six-pack of Americana Beer costs $2 and a six-pack of Bavarian Beer costs $4. You buy the six-pack of Bavarian Beer, although you wonder if maybe two six-packs of Americana Beer would have been a better choice. The opportunity cost of the Bavarian Beer is:

two six-packs of Americana Beer.

Scarcity in economics means:

we do not have sufficient resources to produce all the goods and services we want

Margo spends $10,000 on one year's college tuition. The opportunity cost of spending one year in college for Margo is:

whatever she would have purchased with the $10,000 and whatever she would have earned had she not been in college.

The local Taco Hut charges the same price for everything on its menu: $3 will buy a taco, a burrito, or nachos. You buy the taco and think that if you had not purchased the taco, you would have purchased the burrito. The opportunity cost of the taco is:

your enjoyment of the burrito

You can spend $100 on either a new economics textbook or a new CD player. If you choose to buy the new economics textbook, the opportunity cost is:

your enjoyment of the new CD player.