Econ module 2 quizzes
Which of the following can be derived from other assumptions about numbers. A. Subtraction. B. Multiplication. C. Division D. All of the above. E. B and C above.
All of the above.
On Saturday morning, you rank your choices for activities in the following order: go to the library, work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to go to the library. Your opportunity cost is not clear because not enough information is given. working out at the gym. working out at the gym, having breakfast with friends, and sleeping late. zero because you do not have to pay money to use the library.
Correct working out at the gym.
Which of the following can be derived from other assumptions of economics A. Scarcity. B. Tradeoffs. C. Opportunity costs. D. B and C above. E. A and B above.
D. B and C above.
Using basic assumptions you can determine A. Why markets are efficient. B. When markets are efficient. C. When government intervention helps or hurts economic performance. D. All of the above. E. A and B above
D. All of the above.
Which of the following are assumptions needed for simple arithmetic A. Numbers exist. B. Multiplication. C. Addition. D. All of the above. E. A and C above.
E. A and C above
Positive analysis is concerned with "what ought to be," while normative analysis is concerned with "what is." False True
False
Which of the following is a normative economic statement? The federal government is considering increasing regulations on the use of fossil fuels to promote the use of wind power. Rising corn prices have increased the price of corn-based ethanol. With rising home prices and falling mortgage interest rates, the amount of home foreclosures has decreased. Farmers should not be allowed to grow and sell genetically-modified crops.
Farmers should not be allowed to grow and sell genetically-modified crops.
Which of the following is a positive economic statement? The government should implement a national consumption tax. The standard of living in the United States is too low. If the price of beef falls, a larger quantity of it will be bought. The U.S. government should increase regulations on the banking industry.
If the price of beef falls, a larger quantity of it will be bought.
Which of the following is a positive economic statement? The standard of living in the United States should be higher. If the price of iPhones falls, a larger quantity of iPhones will be purchased. The government should revamp the health care system. The U.S. government should not have bailed out U.S. auto manufacturers.
If the price of iPhones falls, a larger quantity of iPhones will be purchased.
The video describes the steps in simple arithmetic as proceeding from Numbers to cardinal numbers to addition to subtraction to division to multiplication. Numbers to addition to subtraction to division to multiplication. Numbers to cardinal numbers to addition to subtraction to multiplication to division. Cardinal numbers to numbers to addition to multiplication to subtraction to division. None of the above.
Numbers to cardinal numbers to addition to subtraction to multiplication to division.
Which of the following is a normative economic statement? The state of Texas is considering increasing funds for light-rail development to promote the use of public transportation. Rising global demand for coal has led to increases in the price of coal. With rising mortgage rates and rising unemployment rates, the number of unsold homes has increased. Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable.
Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable.
Which of the following is a positive economic statement? The government should ban the production and sale of incandescent light bulbs. Raising the tax on gasoline raises the selling price of gasoline. U.S. citizens should only buy products which are produced in the United States. The government should revamp its immigration policies.
Raising the tax on gasoline raises the selling price of gasoline.
Which of the following is a positive economic statement? Scarcity necessitates that people make trade-offs. People should not buy SUVs. Foreign workers should not be allowed to work for lower wages than the citizens of a country. The government should mandate electric automobiles.
Scarcity necessitates that people make trade-offs.
Which of the following is a normative economic statement? When the price of gasoline rises, the quantity of gasoline purchased falls. The current high price of gasoline is the result of strong worldwide demand. The price of gasoline is too high. When the price of gasoline rises, transportation costs rise.
The price of gasoline is too high.
Which of the following is a normative economic statement? When the price of wheat falls, the quantity of wheat purchased rises. The price of wheat is too low. When the price of wheat falls, the cost of wheat-based products falls. The current low price of wheat is the result of increased worldwide supply
The price of wheat is too low.
"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement. True False
True
When voluntary exchange takes place, both parties gain from the exchange. Selected Answer: True False
True
A model refers to: a simplified description, or representation, of reality. a set of facts established by observation and measurement. a perfect replica of reality. facts, measurements, or statistics that describe the world.
a simplified description, or representation, of reality.
Consider the following statements: a. Car owners purchase more gasoline from a gas station that sells gasoline at a lower price than other rival gas stations in the area. b. Banks do not take steps to increase security since they believe it is less costly to allow some bank robberies than to install expensive security monitoring equipment. c. Firms produce more of a particular DVD when its selling price rises. Which of the above statements demonstrates that economic agents respond to incentives? a only b only c only a and b a, b, and c
a, b, and c
he revenue received from the sale of ________ of a product is a marginal benefit to the firm. an additional unit only profitable units the total number of units no units
an additional unit
Economists assume that individuals will never take actions to help others. prefer to live in a society that values fairness above all else. are rational and respond to incentives. behave in unpredictable ways.
are rational and respond to incentives.
Trinh quits his $80,000-a-year job to become a full-time volunteer at a museum. What is the opportunity cost of his decision? the value he attributes to the joy of working at a museum 0 since he will no longer be earning a salary depends on the "going rate" of museum employees at least $80,000
at least $80,000
John has two hours of free time this evening. He ranked his alternatives, first go to a concert, second go to a movie, third study for an economics exam, and fourth answer his e-mail. What is the opportunity cost of attending the concert for John? answering his e-mail attending a movie, studying for an economics exam, and answering his e-mail studying for an economics exam attending a movie
attending a movie
Causation occurs when: change in one variable is the reason for the change in another variable. two variables tend to move in the same direction. two variables tend to move in opposite directions. change in one variable does not cause any change in another variable.
change in one variable is the reason for the change in another variable.
the opportunity cost of going to an outdoor music festival is equal to the highest value of an alternative use of the time and money spent on the festival. the cost of the festival ticket only. zero because there are no overhead costs for an outdoor festival. the value of the time spent at the festival. the enjoyment you receive from going to the festival.
equal to the highest value of an alternative use of the time and money spent on the festival.
Economists assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time. because irrational people do not make economic choices. because individuals act rationally all the time in all circumstances. even though people rarely, if ever, behave in a rational manner
even though people may not behave rationally all the time.
Marginal utility is the total satisfaction received from consuming a given number of units of a product. extra satisfaction received from consuming one more unit of a product. satisfaction achieved when a consumer has had enough of a product. average satisfaction received from consuming a product.
extra satisfaction received from consuming a product
An item has utility for a consumer if it...... has a high price. is scarce. is something everyone else wants. generates enjoyment or satisfaction.
generates enjoyment or satisfaction.
An omitted variable is a variable that: has been left out, and if included, would explain why the variables considered in a study are correlated. is purposely left out as it does not aid an economic analysis. does not cause other variables in a study to change when it changes. is removed from a study as it can lead to the problem of reverse causality.
has been left out, and if included, would explain why the variables considered in a study are correlated.
Economists assume that the goal of consumers is to do as little work as possible to survive. consume as much as possible. make themselves as well off as possible. spend all their income.
make themselves as well off as possible.
In economics, the term ________ means "additional" or "extra." equity allocative marginal optimal
marginal
The best alternative use of a resource is referred to as its: opportunity cost. sunk cost. market price. marginal utility.
marginal cost.
The extra cost associated with undertaking an activity is called opportunity cost. marginal cost. foregone cost. net loss.
marginal cost.
The extra cost associated with undertaking an activity is called foregone cost. marginal cost. opportunity cost. net loss.
marginal cost.
The highest valued alternative that must be given up to engage in an activity is the definition of opportunity cost marginal benefit economic equity marginal cost
opportunity cost
Suppose that some investors have decided that economic and financial uncertainty have made the prospect of investing in domestic stock markets more risky than investing in foreign stock markets, and therefore choose to invest in foreign markets. By using all available information as they act to achieve their goals, these investors are exemplifying the economic idea that people are rational. people respond to economic incentives. optimal decisions are made at the margin. equity is more important than efficiency.
people are rational.
Suppose the U.S. government encouraged consumers to trade in their old automobiles for more efficient, new models by paying up to $5,000 for the old automobiles. These consumers who did trade in their old automobiles to take advantage of the government offer would be exemplifying the economic idea that people are rational. people respond to economic incentives. optimal decisions are made at the margin. equity is more important than efficiency.
people respond to economic incentives.
Holding all other personal characteristics-such as age, gender, and income-constant, economists would expect that people with health insurance are less likely to be overweight than people without health insurance. people with health insurance are more likely to be overweight than people without health insurance. people with health insurance are less likely to be overweight than people without health insurance. there is no correlation between having health insurance and being overweight. people with health insurance are equally likely to be overweight as people without health insurance.
people with health insurance are more likely to be overweight than people without health insurance
Economic models do all of the following except simplify some aspect of economic life. portray reality in all its minute details. make economic ideas explicit and concrete for use by decision makers. answer economic questions.
portray reality in all its minute details.
Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave ________, meaning they make the best decisions given their knowledge of the costs and benefits. selfishly equitably emotionally rationally
rationally
Amy can study for an hour or spend that hour sleeping or going out for dinner. If she decides to study for the hour, the opportunity cost of the hour spent studying is sleeping or going out for dinner, whichever she would have preferred the most. sleeping and going out for dinner. definitely going to sleep. definitely going out to dinner because she must eat at some time. studying, since this is the choice she opted for.
sleeping or going out for dinner, whichever she would have preferred the most.
The principle of opportunity cost is that in a market economy, taking advantage of profitable opportunities involves some money cost. the cost of production varies depending on the opportunity for technological application. the economic cost of using a factor of production is the alternative use of that factor that is given up. taking advantage of investment opportunities involves costs.
t the economic cost of using a factor of production is the alternative use of that factor that is given up.
By definition, economics is the study of how to make money in the stock market. the choices people make to attain their goals, given their scarce resources. how to make money in a market economy. supply and demand.
the choices people make to attain their goals, given their scarce resources
A correlation between two variables implies that: it is impossible to measure one variable without measuring the other. when one variable changes, the other variable always changes by exactly the same amount. there is a cause-effect relationship between the two variables. there is a mutual relationship between both the variables.
there is a mutual relationship between both the variables.
Economists assume that rational people do all of the following except weigh the benefits and costs of all possible alternative actions. use all available information as they act to achieve their goals. respond to economic incentives. undertake activities that benefit others and hurt themselves.
undertake activities that benefit others and hurt themselves.