Marias Chapter 1-22 Exam 1-4
Ceteris paribus means
"all other things constant" or "nothing else changes."
Refer to Exhibit 2-6. Which graph depicts a technological breakthrough in the production of good X only?
(3)
The coordinates of point A are 30 units of X and 70 units of Y. The coordinates of point B are 28 units of X and 76 units of Y. With X on the horizontal axis and Y on the vertical axis, the slope of the line between points A and B is
- 3.00
The economy can produce 15X and 15Y, 10X and 20Y, 5X and 25Y, or 0X and 30Y. It follows that opportunity cost of 1X is ___Y.
1.0
Refer to Exhibit 2-1. The opportunity cost of moving from point B to A is
20,000 units of butter.
Refer to Exhibit 1-2. According to the data provided in this table, what is the slope of the line between points A and B, if these data were graphed with X on the horizontal axis and Y on the vertical axis?
3.00
Refer to Exhibit 1-4. If the student whose marginal benefits and costs of good health are noted in this table, how many units of good health should the student obtain in order to maximize her net benefits of good health?
5 units
A mandatory seat-belt law ends up raising the number of traffic fatalities if it lowers fatalities per accident from 0.05 to 0.03 while raising the number of accidents per period from 30,000 to greater than ___________ accidents per period.
50,000
Refer to Exhibit 1-1. The efficient length of time for the student to study in the situation portrayed in this diagram is
6 hours
An economy can produce either of these two combinations of goods X and Y: 1,000X and 0Y or 400Y and 0X. Furthermore, the opportunity cost between the two goods is always constant. Which of the following combinations of the two goods, X and Y, lies on the economy's production possibilities frontier?
700 units of X and 280 units of Y
If someone gives you a free ticket to the movies, then there is no opportunity cost involved with going to the movies.
False
The higher the opportunity cost of making a new friend, the more likely one is to make a new friend, ceteris paribus
False
When a person is making a decision at the margin he or she is comparing the total benefits from that activity to the total costs of the proposed action.
False
Refer to Exhibit 2-7. Which of the following statements is true?
If the economy's PPF is represented by PPF1 , points A and B are productive efficient, while C and D are unattainable
Which of the following statements is false?
If there are only two goods, guns and butter, it is possible to produce more of both goods if the economy is currently operating at a productive efficient point
Which statement uses the term ceteris paribus correctly?
If you exercise regularly, you will be healthier, ceteris paribus.
Refer to Exhibit 2-2. If PPF2 is the relevant production possibilities frontier, then point __________ is unattainable.
J
Which of the following statements is false?
Labor consists of the physical, but not mental, talents of people who contribute to the production process
Refer to Exhibit 2-8. Who has the comparative advantage in the production of good Y?
Maria
Refer to Exhibit 2-8. Who has the comparative advantage in the production of good X?
Maya
Which of the following is most likely to be a negative unintended effect of placing safety caps on medicine containers?
People leave their medicine containers open more often, which ends up making it easier for children to get into the medicine.
A rationing device is a method used to resolve who gets what of available goods and resources.
True
In a PPF graph of goods X and Y, points that lie beyond (to the right of) the PPF represent combinations of the two goods that are currently unattainable.
True
Opportunity cost is illustrated by a movement from one point to another on the production possibilities frontier.
True
Some economic studies have shown that mandatory seat belt laws do not lead to a reduction in traffic fatalities.
True
The law of increasing opportunity cost helps to explain why PPF's are typically bowed-outward.
True
The answer is, "This is principally used to exhibit changes in data over time." The question is,
What is a line graph?
Efficiency is consistent with
a and b
If scarcity didn't exist, neither would
a and b
Along its production possibilities frontier (PPF) an economy can produce 0X and 15Y, 10X and 10Y, 20X and 5Y, or 30X and 0Y. It follows that the PPF is
a downward-sloping straight line
Carlos can produce the following combinations of X and Y: 10X and 10Y, 5X and 15Y, and 0X and 20Y. The opportunity cost of one unit of X for Carlos is
a) 1 unit of Y.
Refer to Exhibit 2-9. For Alex, the opportunity cost of producing one unit of good A is ____________ unit(s) of good B.
a) 3.00
Refer to Exhibit 2-5. The opportunity cost of moving from point A to point B is approximately
a) 5,000 televisions
Refer to Exhibit 2-5. Which of the following labeled points are productive efficient?
a) A, B, C, D, and E
A PPF is more likely to be a downward-sloping curve that is bowed outward than a downward-sloping straight line because most resources are
a) better suited for the production of some goods than others.
Refer to Exhibit 2-1. The PPF illustrates
a) constant opportunity costs between guns and butter.
A PPF is a straight line as a result of
a) constant opportunity costs.
A characteristic of a 45-degree line is that
a, b, and c
Which of the following is a possible rationing device?
a, b, and c
Refer to Exhibit 1-2. Based on the data provided in this table, if these data were plotted in a two-variable diagram the result would be ______________ sloping ____________________.
an upward; (straight) line
If an economist says "the higher the price of oranges, the fewer oranges individuals will buy, ceteris paribus," this means that
as the price of oranges rises, individuals' preferences do not change, nor does anything else, but individuals buy fewer oranges in response to the higher price of oranges.
Which of the following statements is true?
b) If scarcity did not exist, neither would a PPF.
Through war, many of the factories in country 1 are destroyed and many of its people are killed. As a result, the country's
b) PPF after the war has probably shifted to the left compared to its PPF prior to the war.
The point where the PPF intersects the horizontal axis is
b) attainable and productive efficient.
Points inside (below) the production possibilities frontier (PPF) are
b) attainable and productive inefficient.
Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses. Now this PPF shifts inward and Andrea moves to a point on the new PPF. Which of the following would be impossible after her PPF has shifted inward compared to before the PPF shifted?
b) both of her grades to rise
If resources are better suited toward the production of one good than toward another good, then the PPF for those two goods is
b) bowed outward.
An increase in the quantity of resources available
b) shifts the PPF rightward.
With a constant opportunity cost between goods A and B, the PPF for goods A and B would
be a straight line.
Normative economics is concerned with
both a and b
Refer to Exhibit 2-4. This economy is productive
both a and b
Refer to Exhibit 2-9. If Alex and Adam each specialize in the good in which he has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond their PPF.
c) Alex and Adam
Points that lie inside (or below) the PPF are
c) attainable and productive inefficient.
An economy is productive efficient if it produces
c) maximum output with given resources and technology.
Within the production possibilities frontier (PPF) framework, choice is depicted by the
c) need to select among the points making up the PPF.
Refer to Exhibit 2-4. As more fax machines are produced, the opportunity cost of producing them
c) remains constant.
Which of the following is not true about production possibilities frontiers?
c) unemployment of resources is shown by shifting the PPF inward
Produced goods used as inputs for the production of other goods comprise the resource known as
capital
Positive economics is concerned with
cause-effect relationships
In economics,one of the effects of scarcity is
choice
In every economy people vie for the economy's rationing device, a process called
competition
Refer to Exhibit 2-5. The opportunity cost of moving from point C to point B is
d) 20,000 fax machines.
If an economy can produce a maximum of 100 units of good X and the opportunity cost of 1X is always 5Y, then what is the maximum number of units of good Y the economy can produce?
d) 500
Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point below that PPF. Assuming that the PPF has not shifted, this could be due to
d) an increase in unemployment of some resources.
Productive efficiency implies that
d) gains are impossible in one area without losses in another.
The PPF between goods X and Y will be a downward-sloping
d) straight line if constant opportunity costs exist.
Economists use the ceteris paribus assumption primarily in order to
designate what they believe is the correct relationship between two variables
In general, there is a ______________ relationship between the number of hours spent studying for a test and the grade earned on the test.
direct
Refer to Exhibit 1-2. Based on the data provided in this table, what type of relationship exists between variables X and Y?
direct
Refer to Exhibit 1-3. Based on the data provided in this table, if these data were plotted in a two-variable diagram the result would be a ______________ sloping _____________.
downward; (nonlinear) curve
A productive efficient society
e) all of the above
Refer to Exhibit 2-3. If PPF1 is the relevant production possibilities frontier, a shift to PPF2 may depict
e) all of the above
Refer to Exhibit 2-2. If PPF2 is the relevant production possibilities frontier, then point __________ is productive efficient.
e) both b and d
Price is the only rationing device that can be used in a modern economy.
false
To an economist, the terms factor and output are synonyms.
false
Which of the following is not one of the four broad categories of resources?
government
If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of good is X is
greater than 5Y
Microeconomics is the branch of economics that deals with
human behavior and choices as they relate to relatively small units --- an individual, a firm, an industry.
Refer to Exhibit 2-5. As more fax machines are produced, the opportunity cost of producing them
increases.
Let X be the number of hours you spend studying for an exam on Wednesday afternoon and Y be your chances of winning the Wednesday night state lottery. What kind of a relationship do you most likely expect between X and Y?
independent
Refer to Exhibit 1-3. Based on the data provided in this table, what type of relationship exists between variables X and Y?
inverse
Consider two straight-line PPFs. They have the same vertical intercept, but curve I is flatter than curve II. The opportunity cost of producing the good on the horizontal axis
is greater along curve II.
The purpose of the ceteris paribus assumption is to allow economists to
isolate the relationship between two variables.
Minerals, water, and forests are all considered to be part of the broad resource category known as
land
If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 1,000th unit of good X is 0.5Y, then the opportunity cost of producing the 2,001st unit of good is X is most likely to be
more than 0.5Y.
Several years ago, a bookstore chain extended its closing time from 9 p.m. to 10 p.m. Now it is considering a further extension to 11 p.m. In making this marginal decision, the results of having gone from 9 p.m. to 10 p.m. are
no longer relevant to the current decision
A person goes into a store and buys a computer for $1,210. In this case, price is acting as a
rationing device.
By looking at the different slices of a pie chart, and comparing one slice to another, it is possible to quickly estimate
relative relationships.
To an economist, utility means:
satisfaction
According to economists, competition exists because of
scarcity
Saying "the marginal costs are greater than the marginal benefits" is the same as saying
the additional costs are greater than the additional benefits.
Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point directly to the left of it. Assuming that the PPF has not shifted, this could be due to
the implementation of a new law that interferes with productive efficiency.
Productive efficiency implies
the impossibility of gains in one area without losses in another.
Which of the following pairs of variables is most likely to be directly related?
the number of children in a family and the number of toys the family owns
If a production possibilities frontier (PPF) is concave outward, it follows that
the opportunity cost (of producing the good on the horizontal axis) rises as more of the good is produced
Variables A and B are directly related. If we plot A on the horizontal axis and B on the vertical axis, the line that connects combinations of A and B plotted in a two-variable diagram would be
upward-sloping (left to right)
Which of the following is least likely to be an effect of scarcity?
utility
Scarcity is defined as the condition in which
wants are infinite and resources finite
"If you hadn't gone to dinner with your friends, you would have stayed home and watched television." It follows that
watching television is the opportunity cost of having dinner with your friends.
In a two-variable diagram, there is a straight line which is parallel to the horizontal axis. The slope of this line is
zero
