macroecon chps. 1&2
which of the following is a positive economic statement?
The minimum wage law causes unemployment.
All _______ economies have been political dictatorships
centrally planned
The opportunity cost of taking an online history class is...
equal to the highest value of an alternative use of the time and money spent on the class
economists assume that
optimal decisions are made at the margin
Suppose your expenses for this term are as follows: tuition: $5,000, room and board: $3,000, books and other educational supplies: $500. Further, during the term, you can only work part-time and earn $4,000 instead of your full-time salary of $10,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college?
$11,500
Using marginal analysis how many hours should Ava extend her bakery's hours of operation?
4 hours
Individuals who have never been the best at doing anything...
Can still have a comparative advantage in producing some product
your roommate, Serafina, a psychology major, said, " The problem with economics is that it assumes that consumers and firms always make the correct decision. But we know that everyone's human, and we all make mistakes." Do you agree with her comment?
I disagree with her. economics does not study correct or incorrect behaviors but rather it assumes the economic agents behave rationally meaning they make the best decisions given their knowledge of the costs and benefits.
What is an economic model?
It is a simplified version of some aspect of economic life used to analyze an economic issue
Which of the above statements demonstrates that economic agents respond to incentives?
Soda drinkers purchase more soda from a grocery store that sells soda at a lower price than at other rival grocery stores in the area
which of the following is an example of a "how much" decision?
The Pleasantville movie theater is open only in the evenings. The theaters manager is debating whether to add daily matinee shows.
opportunity cost is defined as
The highest-valued alternative that must be given up to engage in an activity.
which of the following is a factor of production?
The janitor at the local elementary school
________ 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
Fast food restaurants produce a range of menu items such as hamburgers, chicken sandwiches, salads, and french fries. What fundamental economic question are they addressing by offering this range of items?
What to produce?
the term "market" in economics refers to
a group of buyers and sellers of a product and the arrangement by which they come together to trade
which of the events listed above could cause a movement from Z to X?
a war that kills a significant portion of a nation's population
An example of a factor of production is
a worker hired by an auto manufacturer.
If you can produce more of something than others with the same resources, you have
an absolute advantage
what does the term "marginal" mean in economics?
an additional or extra
____ a nation's production possibilities frontier represents economic growth.
an outward shift of
productive efficiency is achieved when firms produce goods and services ...
at the lowest cost
Specializing in the production of a good or service in which one has a comparative advantage enables a country to do which of the following?
consume a combination of goods that lies outside its own production possibilities frontier
To compete in the automobile market, Tesla must make many strategic decisions such as whether to introduce a new car model, how to sell and service its cars, and where to advertise. At Tesla's Fremont, California plant, managers must decide on the monthly production quantities of their S and X models. In making this decision, the managers
face a trade-off, because producing more of one model means producing less of the others.
A worker is hired in a
factor market
if a vineyard wants to raise funds to purchase a new bottling machine, it does so in the...
factor market
Carlos Vanya grows tomatoes and strawberries on his land. A portion of his land is more suitable for going tomatoes and the other portion is better suited for strawberry cultivation. Which of the graphs in figure 2-3 represent his production possibilities frontier?
graph C
Izzy Amador is a highly talented tattoo artist. She has chosen to specialize in tattoo art because of all of the following except...
her opportunity cost of pursuing another career is very low
which of the following is a microeconomic question?
how will Apple decide on a selling price for the iPad?
national income, economic recession
macroeconomics
college tuition rates, farm subsidies, automobile prices, air traffic congestion
microeconomics
the concept of ____ is that the economic cost of using a factor of production is the alternative use of that factor that is given up
opportunity cost
In 2017, President Trump considered imposing a tariff on automobiles assembled by US manufacturers in Mexico that were to be sold in the United States. If this tariff was impose and as a result, some of these manufactures move their automobile assembly from Mexico back to the United States, these firms will be reacting to which of the three key economic ideas?
people respond to economic incentives
Suppose the US government encourage new teachers to take jobs in underperforming schools by paying the new teachers a $20,000 bonus. These teachers would be exemplifying the economic idea that
people respond to economic incentives
Every society faces economic trade-offs. This means
producing more of one good means less of another good can be produced.
When goods and services are produced at the lowest possible cost, ________ occurs.
productive efficiency
The study of economics arises due to
scarcity
____ exists because unlimited wants exceed the limited resources available to fulfill those wants.
scarcity
economic growth is represented on a production possibilities frontier model by the production possibilities frontier ______.
shifting outward
comparative advantage means
the ability to produce a good or service at a lower opportunity cost than any other producer.
Who, in a modern mixed economy, decides what goods and services will be produced with the scarce resources available in that economy?
the government, consumers and producers
the production possibilities frontier shows
the maximum attainable combinations of two products that may be produced in a particular time period with available resources.
according to the centers for disease control and prevention, in 2015 ____ in which less than 20 percent of the population was considered obese.
there were no states
Scarcity refers to the situation in which
unlimited wants exceed limited resources
The resource income earned by those who supply labor services is called
wages and salaries
which of the following is a macroeconomic question?
what determines minimum wage?