Macro - Ch. 1

A. the marginal benefit of attending exceeds the marginal cost of attending.

A student will decide to attend class when A. the marginal benefit of attending exceeds the marginal cost of attending. B. the marginal cost is low C. the marginal benefit is positive. D. there is an attendance policy.

a. curve shifts outward b. no change c. curve shifts outward d. curve shifts inward

Explain how (if at all) each of the following events affects the location of a country's production possibilities curve: a. The quality of education increases: _____. b. The number of unemployed workers increases: _____. c. A new technique improves the efficiency of extracting copper from ore: _____. d. A devastating earthquake destroys numerous production facilities: _____.

a. more b. fewer c. current number d. more e. fewer

For each of the following situations involving marginal cost (MC) and marginal benefit (MB), indicate whether it would be best to produce more, fewer, or the current number of units. a. 3,000 units at which MC = $10 and MB = $13: _____. b. 11 units at which MC $4 and MB = $3: _____. c. 43,227 units at which MC = $99 and and MB = $99: _____. d. 82 units at which MC < MB: _____. e. 5 units at which MB < MC: _____.

a. macroeconomics b. microeconomics c. microeconomics d. macroeconomics e. microeconomics f. macroeconomics

Indicate whether each of the following statements applies to microeconomics or macroeconomics: a. The unemployment rate in the United States was 3.7 percent in December 2018: _____. b. A U.S. software firm laid off 15 workers last month and transferred the work to India: _____. c. An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise: _____. d. U.S. output, adjusted for inflation, increased by 2.3 percent in 2017: _____. e. Last week Wells Fargo Bank lowered its interest rate on business loans by one-half of 1 percentage point: _____. f. The consumer price index rose by 2.2 percent from November 2017 to November 2018: _____.

a. opportunity cost b. utility c. economics d. marginal analysis

Match each term with the correct definition. a. The next-best thing that must be forgone in order to produce one more unit of a given product: _____. b. The pleasure, happiness, or satisfaction obtained from consuming a good or service: _____. c. The social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity: _____. d. Making choices based on comparing marginal benefits with marginal costs: _____.

a. 3 pounds of potatoes b. 2 pounds of potatoes

Potatoes cost Janice $1 per pound, and she has $5.00 that she could possibly spend on potatoes or other items. Suppose she feels that the first pound of potatoes is worth $1.50, the second pound is worth $1.14, the third pound is worth $1.05, and all subsequent pounds are worth $0.30 per pound. a. How many pounds of potatoes will she purchase? b. How many pounds would she purchase if she only had $2 to spend?

greater than

Starbucks has $1 billion to invest. It can either purchase a rival coffee shop chain or build additional Starbucks shops. If Starbucks chooses to purchase the rival chain, we can conclude that Starbucks' management team determined that the relative profitability of purchasing and owning the rival's existing shops is _____ the expected profitability of using the money to build additional Starbucks shops.

B. 4 pens.

Suppose that you are given a $100 budget at work that can be spent only on two items: staplers and pens. If staplers cost $10 each and pens cost $2.50 each, then the opportunity cost of purchasing one stapler is: A. 5 pens. B. 4 pens. C. 0 pens. D. 10 pens.

a. increase b. decrease c. increase

Suppose that you initially have $100 to spend on books or movie tickets. The books start off costing $25 each and the movie tickets start off costing $10 each. For each of the following situations, would the attainable set of combinations that you can afford increase or decrease? a. Your budget increases from $100 to $150 while the prices stay the same: _____. b. Your budget remains $100, and the price of books remains $25, but the price of movie tickets rises to $20: _____. c. Your budget remains $100, and the price of movie tickets remains $10, but the price of a book falls to $15: _____.

C. Specialization and trade have the same effect as having more and better resources or discovering improved production techniques.

Suppose that, on the basis of a nation's production possibilities curve, an economy must sacrifice 10,000 pizzas domestically to get the 1 additional industrial robot it desires but that it can get the robot from another country in exchange for 9,000 pizzas. Now consider the following statement: "Through international specialization and trade, a nation can reduce its opportunity cost of obtaining goods and thus move outside its production possibilities curve." Which of the following explains the relationship between the situation described and the statement? A. Specialization and trade have the same effect as having more and better products or discovering improved production techniques. B. International specialization means directing domestic products to the output that a nation is highly efficient at purchasing. C. Specialization and trade have the same effect as having more and better resources or discovering improved production techniques. D. The input gains from greater international specialization and trade are the equivalent of economic growth.

b. .5 bag of peanuts remain constant c. no d. the same increased

Suppose you win $15 on a lotto ticket at the local 7-Eleven and decided to spend all the winnings on candy bars and bags of peanuts. Candy bars cost $0.75 each while bags of peanuts cost $1.50 each. b. What is the opportunity cost of one more candy bar? Do these opportunity costs rise, fall, or remain constant as additional units are purchased? c. Does the budget line tell you which of the available combinations of candy bars and bags of peanuts to buy? d. Suppose that you had won $30 on your ticket, not $15. Is the slope of a new budget line flatter, steeper, or the same as in the diagram above? Has the number of available combinations increased or decreased?

C. Increases in resource supplies and advances in technology

What are the two major ways in which an economy can grow and push out its production possibilities curve? A. Better weather and nicer cars B. Higher taxes and lower spending C. Increases in resource supplies and advances in technology D. Decreases in scarcity and advances in auditing

B. Satisfaction from consuming goods or services

Which of the following best describes the concept of "utility" and purposeful behavior? A. Consumers' desires for products that are useful B. Satisfaction from consuming goods or services C. The trade-off between spending and saving D. The effort required to generate income

D. Designing data C. economic principles.

Which of the following is not a key element of the scientific method? A. Determining the validity of explanations B. Formulating explanations C. Testing explanations D. Designing data The scientific method is the technique used by economists to determine A. the size of government. B. the way in which consumers relate to each other. C. economic principles. D. the price of a product.

D. The unemployment rate is 4.8 percent. D. The government ought to lower taxes so people have more money.

Which of the following represents a positive economic statement? A. Taxes should not be increased since that will lower spending. B. The government should extend unemployment benefits. C. The unemployment rate is too high. D. The unemployment rate is 4.8 percent. Which of the following represents a normative economic statement? A. The unemployment rate is higher than it was last year. B. Higher taxes will lower spending. C. The government will have a larger deficit if unemployment benefits are extended. D. The government ought to lower taxes so people have more money.

A. natural, human, and manufactured inputs used to produce goods and services. D. labor, land, real capital, and entrepreneurs. factors of production or inputs

a. Economic resources are the A. natural, human, and manufactured inputs used to produce goods and services. B. natural, technological, and manufactured inputs used to produce goods and services. C. natural, human, and financial inputs used to produce goods and services. D. technological, human, and manufactured inputs used to produce goods and services. b. Economists classify resources as A. labor, land, human capital, and entrepreneurs. B. labor, resources, real capital, and entrepreneurs. C. labor, land, financial capital, and entrepreneurs. D. labor, land, real capital, and entrepreneurs. c. Because economic resources are used to produce goods and services, they are called _____.

a. downward, upward b. MB = MC c. fewer

a. Explain the typical shapes of the marginal-benefit and marginal-cost curves. The marginal-benefit curve is _____ sloping. The marginal-cost curve is _____ sloping. b. With these curves, the optimal allocation of resources to a particular product will occur when _____. c. If current output is such that marginal cost exceeds marginal benefit, should more or fewer resources be allocated to this product?

C. what must be sacrificed in using a resource for its next-best use. D. greater in New York City because the alternative uses of the city block are more valuable.

a. In a market system, the allocation of scarce goods involves the consideration of A. the time required to pursue an economic activity. B. identifying the possibility of professional advancement. C. what must be sacrificed in using a resource for its next-best use. D. the dollar cost of any good or service. b. Suppose a city block was going to be used for a parking lot in both New York City and a small town. The opportunity cost would be A. lower in a small city because the alternative uses of the city block are more varied. B. greater in a small city because the alternative uses of the city block are more valuable. C. lower in New York City because the alternative uses of the city block are more varied. D. greater in New York City because the alternative uses of the city block are more valuable.

not productive A. Because entrepreneurial ability is not directly engaged in production. - Innovate - Take risks - Make decisions

a. Money is not considered a capital resource in economics because money is _____. b. Why is entrepreneurial ability distinct from labor even though both are considered a category of economic resource? A. Because entrepreneurial ability is not directly engaged in production. B. Because entrepreneurial ability is directly engaged in production. c. What roles do entrepreneurs play in the economy? - Make routine pricing decisions - Innovate - Purchase capital - Create market demand - Take risks - Make decisions