HW 1

Trade-offs force society to make choices when answering what three fundamental questions?

What goods and services to produce; how will these goods and services be produced; and who receives them?

In a market economy, who decides what goods and services will be produced?

consumers and producers

The study of econ arises due to

scarcity

Which of the following is a microeconomic question?

How does Fiat decide on the price of the 500 Pop model?

30. Refer to Figure 2-9. Which two arrows in the diagram depict the following transaction: Stanley purchases the novel, "Night of Sorrows" for his summer reading pleasure. - reference graph

K and G

Figure 2-2 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. 19. Refer to Figure 2-2. What is the opportunity cost of one dozen roses?

0.4 dozen roses

Lionel's Lawn Care is a company that maintains residential yards. Lionel's cost for his standard package of mowing, edging, and trimming is $15, and he charges $25 for this service. For a total price of $40, Lionel will also trim shrubs, a service that adds an additional $10 to the total cost of the standard package. What is Lionel's marginal cost of adding the shrub-trimming service to the standard package?

10

Figure 2-2 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. 18) Refer to Figure 2-2. What is the opportunity cost of one dozen orchids?

2.5 dozen roses

Figure 2-8 shows the production possibilities frontiers for Costa Rica and Guatemala. Each country produces two goods, pineapples and coconuts. 24. Refer to Figure 2-8. What is the opportunity cost of producing 1 ton of coconuts in Costa Rica? - reference table

2/3 of a ton of pineapples

Consider the following statement: 1. Consumers rent more kayaks from a vendor that rents kayaks at a lower price than other rival kayak vendors along Waikiki beach. 2. Department stores take steps to increase security since they believe it is more costly to allow shoplifters than to install expensive security monitoring equipment. 3. Farmers produce more cotton when its selling price falls.

A and B

Table 2-4 shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. Refer to Table 2-4. Which of the following statements is true? - reference table

George has an absolute advantage in both tasks.

Figure 2-8 shows the production possibilities frontiers for Costa Rica and Guatemala. Each country produces two goods, pineapples and coconuts. 25) Refer to Figure 2-8. Which country has a comparative advantage in the production of coconuts? - reference table

Guatemala

How are the fundamental economic decisions determined in Cuba?

The government decides because Cuba is a centrally planned economy

________ shows that if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.

The production possibilities frontier model

Which of the following is a macroeconomic question?

What determines the minimum wage?

Fast food restaurants produce a range of menu items such as hamburgers, chicken sandwiches, salads, and french. What fundamental economic questions are they addressing by offering this range of items?

What to produce?

Which of the following would shift a nation's production possibilities frontier inward?

a law requiring workers to retire at age 50

Refer to Table 2-1. Assume Dina's Diner only produces sliders and hot wings. A combination of 40 sliders and 50 hot wings would appear - reference table

along Dina's production possibilities frontier.

If the marginal cost for the US Postal Service to deliver packages for Amazon on Sundays is estimated to be $250,000 per Sunday, then the US Postal Service should make these Sunday deliveries

as long as the marginal benefit received each Sunday is just equal to or greater than $250,000

Ted quits his $60,000-a-year job to be a stay-at-home dad. What is the opportunity cost of his decision?

at least $60,000

Econ is the study of the ______ people make to attain their goals, given _____ resources

choices; scarce

If a vineyard wants to raise funds to purchase a new bottling machine, it does so in the

factor market.

Refer to Table 2-1. Assume Dina's Diner only produces sliders and hot wings. A combination of 40 sliders and 25 hot wings would appear - reference table

inside Dina's production possibilities frontier.

An office supply store sells a ream of printer paper at a fixed price of $4.50. Which of the following is a term used by economists to describe the money received from the sale of an additional ream of paper?

marginal revenue

Figure 2-8 shows the production possibilities frontiers for Costa Rica and Guatemala. Each country produces two goods, pineapples and coconuts. 26) Refer to Figure 2-8. If the two countries have the same amount of resources and the same technological knowledge, which country has an absolute advantage in the production of both pineapples and coconuts? - reference table

neither country

In 2018, two members of Congress introduced the Stop Bad Employers by Zeroing Out Subsidies Act, legislation they hoped would increase wages of employees who were receiving government assistance. These members of Congress thought this legislation would give firms a reason to raise employee wages so fewer employees would receive the government assistance. Under the act, firms whose employees received assistance from government programs such Medicaid and SNAP would be required to

pay a tax equal to the cost of the assistance

In the circular flow model, households

spend earnings from resource sales on goods and services in the product market.

Which of the following is a factor of production?

the janitor at the local elementary school

Which of the following best describes an assumption economists make about human behavior?

they assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time

Which of the following is an example of an economic trade-off that a firm has to make?

whether it is cheaper to produce with more machines or with more workers