Homework 1
Two points on a nonlinear curve have coordinates given by (5, 15) and (17, 13). The average slope of the curve between these points is:
-1/6.
Within the circular-flow diagram, the factor market is the place where
firms buy the resources they need for the production of goods and services.
The tools of macroeconomic policy include
government spending, taxes, and control of the money supply.
Which one of the following goods would NOT be efficiently provided by markets?
Air traffic control
For which of these groups of people is the opportunity cost of attending college especially high?
People who are star athletes
If two variables are positively related, on a graph they will always be represented by:
a line or curve that slopes upward.
Markets might fail to be efficient when individual actions have side effects that are not properly taken into account. An example of this might arise in the case of a firm that
creates pollution.
Economic growth can arise from
an increase in an economy's factors of production.
A resource is
anything that can be used to produce something else.
The bowed-out shape of the production possibilities frontier reflects
increasing opportunity cost.
In moving from point to point along a production possibilities frontier, the economy
is producing more of one thing at the opportunity cost of giving up some production of the other.
The production possibilities frontier is a depiction of
the maximum quantities of two goods an economy may produce.
Economic theory predicts that people are most likely to change their behavior when
they are given incentives to do so.
If there are gains from trade, then
we all have more to consume by trading with one another.