question

Which expression is another way of saying "marginal benefit"?

answer

Extra benefit

question

The economizing problem is essentially one of deciding how to make the best use of:

answer

Limited resources to satisfy unlimited economic wants

question

Economists would classify all of the following as land except:

answer

A hydroelectric dam

question

Which is not a factor of production?

answer

Money

question

The observation that people compare the marginal benefits with the marginal costs in making such decisions as how to spend time, which products to buy, whether or not to work, and which goods to produce and sell, is most closely associated with:

answer

The economic perspective

question

The role of an assumption in an economic theory is to:

answer

Simplify the theory

question

The idea in economics that "there is no free lunch" means that:

answer

There are opportunity costs involved when scarce resources are used up for free lunches.

question

Assume that a consumer has $12 in income and she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. If the consumer spent all of her money on either apples or bananas, how many apples or how many bananas would she be able to buy?

answer

8 apples or 16 bananas

question

From an economic perspective, when a student decides to attend another year of college, the student has concluded that the marginal:

answer

Benefits of attending college are greater than the marginal costs

question

Which of the following is considered to be an entrepreneur?

answer

A self-employed person

question

Suppose that a consumer purchases just two goods, good X and good Y. The ratio of the price of good Y to good X is the:

answer

Slope of the budget line

question

Assume that a consumer purchases only two products. Suppose that the consumer's money income doubles, and the prices of the two products also double. These changes in income and prices will result in

answer

No change in the budget line

question

In a graph of the marginal benefit (MB) and marginal cost (MC) of national defense goods, a rightward shift or increase in the MB curve will:

answer

Increase the allocation of resources to national defense

question

A point to the left of a budget line is:

answer

Attainable, but a point to the right is unattainable

question

The statement that "the unemployment rate will increase as the economy moves into a recession" is an example of:

answer

A generalization

question

A U.S. senator states: "The minimum wage should be raised to give people a decent living wage." This quote is an example of:

answer

A normative economic statement

question

A schedule or curve that shows the various combinations of two products a consumer can purchase with a specific amount of money income is:

answer

A budget line

question

Refer to the above table. A change from possibility B to C means that:

answer

15 units of wheat are given up to get one more unit of steel

question

In every society, choices must be made because resources are:

answer

Finite, but economic wants are insatiable

question

Refer to the above table. In moving stepwise from possibility A to B to C ... to F, the cost of a unit of steel in terms of wheat:

answer

Increases

question

When studying human behavior, economists assume rational self-interest. This means that:

answer

People make decisions based on some desired results

question

A recurring theme in economics is that people:

answer

Have unlimited economic wants, but limited resources

question

A point outside the production possibilities curve is:

answer

Unattainable because of limited resources

question

Which would be a normative economic statement?

answer

This administration needs to raise taxes to pay for childcare programs

question

On a production possibilities curve, the single optimal or best combination of output for any society:

answer

Depends upon the preferences of society

question

Refer to the above table. In moving from possibility C to D, the opportunity cost of a unit of steel in terms of a unit of wheat is:

answer

20

question

After graduating from high school, Ron Willis plans to go to college. The college tuition is $15,000 a year. Instead of going to college, Ron could take a full-time job that pays $20,000. If Ron decides to go to college, what is his opportunity cost of attending for one year?

answer

$35,000

question

Which of the following is a factor of production?

answer

Capital

question

Henry wants to buy a book. The economic perspective suggests that Henry will buy the book if:

answer

The marginal benefit of the book is greater than its marginal cost

question

All of the following would affect the position of a country's production possibilities curve, except:

answer

The level of unemployment.

question

A basic assumption used in most economic theories is that:

answer

All other things besides the focal factor remain constant

question

(The following economy produces two products.) Picture Refer to the above table. The marginal opportunity cost of the third unit of steel is:

answer

20 units of wheat

question

Developing economic principles or explanations about how individuals behave or institutions act is referred to as:

answer

Economic theory

question

Economic models do not reflect the full complexity of reality, but instead are based on:

answer

Simplifications

question

Economists have difficulty applying the scientific method because:

answer

Controlled laboratory experiments are impossible or often infeasible

question

From an economic perspective, when a consumer decides to buy more life insurance, the consumer has most likely concluded that the:

answer

Marginal benefits of more insurance coverage are greater than the marginal costs

question

One major assumption of the economic perspective is:

answer

That individuals' behavior reflect rational self-interest

question

Which question is an example of a microeconomic question?

answer

Will the merger of two airlines likely lead to higher airline ticket prices?

question

The concept of "rational behavior" suggests that:

answer

Different people make different choices because their circumstances and information differ

question

The production possibilities curve bows outward from the origin because:

answer

Opportunity costs increase as the production of a good increases

question

Which would be a positive economic statement?

answer

Stock prices rose to a new record last month for the fourth month in a row

question

The opportunity cost of constructing a new public highway is the:

answer

Value of other goods and services that must be sacrificed to construct the new highway

question

Money is not considered to be an economic resource because:

answer

As such it is not productive

question

What is the economic meaning of the expression that "there is no such thing as a free lunch"?

answer

It means that scarce resources are used up to provide freebies and giveaways

question

The production possibilities curve represents:

answer

The maximum combinations of products that can be produced with fixed resources and technology

question

(The following economy produces two products.) Picture Refer to the above table. In moving from possibility C to D, the cost of a tank in terms of autos is:

answer

200

question

Which question is an illustration of a macroeconomic question?

answer

Is the level of employment in the economy sensitive to the quantity of consumer spending?

question

Tammie makes $150 a day as a bank clerk. She takes off two days off work without pay to fly to another city to attend the concert of her favorite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50. The opportunity cost of Tammie's attending the concert is:

answer

$600

question

Which is an illustration of a microeconomic question?

answer

Will a new type of television set increase the number of buyers?

question

The study of how a firm sets its prices in different regions of the nation would fall under:

answer

Microeconomics

question

Assume that a consumer has $12 in income and she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. For this consumer, the opportunity cost of buying two bananas is

answer

1 apple

question

(The following economy produces two products.) Picture Refer to the above table. The total opportunity cost of the three units of steel is:

answer

45 units of wheat

question

The process of developing hypotheses, testing them against facts, and using the results to construct theories is called:

answer

The scientific method

question

The opportunity cost to a consumer who smokes cigarettes is the:

answer

Products that the consumer could have bought instead of cigarettes

question

The ceterisparibus assumption is employed in economic analysis to:

answer

...Simplify the complex world

question

The purpose of the ceteris paribus assumption used in economic analysis is to:

answer

... Focus on the effect of a single factor on a certain variable

question

Refer to the above graph. The marginal opportunity cost of the fourth unit of bread is:

answer

...4 units of drill presses

question

Clara states that "there is a high correlation between the level of people's education and the level of their income." Ellie replies that the correlation occurs because "more education is the best way to earn more income in this country."

answer

... Clara's statement is positive and Ellie's statement is normative

question

(The following economy produces two products.) Picture Refer to the above table. The opportunity cost of each additional tank in terms of autos:

answer

Increases as more tanks are produced

question

The economizing problem for society is:

answer

Due to the fact that productive resources are scarce relative to economic wants

question

Which is considered a factor of production?

answer

An auto plant.

question

Which one of the following would be a normative economic statement?

answer

The worsening balance of trade must be corrected if this nation is to remain competitive in the world economy

question

Microeconomics focuses on:

answer

The individual units that make up the economy

question

Which of the following is considered as an economic resource?

answer

An auto plant

question

Assume that a consumer has $12 in income and she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. What is the slope of the budget line for apples and bananas if apples were graphed on the horizontal axis and bananas were graphed on the vertical axis?

answer

-2.00

question

Which of the following is one of the four simplifying assumptions made in constructing the production possibilities model?

answer

A) More than two products are produced B) The economy is fully employed and is using least-cost methods of production

question

The individual who brings together economic resources and assumes the risk of business ventures in a capitalist economy is called the:

answer

Entrepreneur

question

(The following economy produces two products.) Picture Refer to the above table. The total opportunity cost of the three units of tanks is:

answer

350 units of autos

question

Which of the following is considered as an economic resource?

answer

The land that are designated as national parks by the government

question

(The following economy produces two products.) Refer to the above table. The marginal opportunity cost of the fourth unit of tanks is:

answer

...A) 300 B) 650 (Wrong) C) 200 (Try this) D) 350WRONG

question

Another description for ceteris paribus is:

answer

Other things equal

question

Opportunity cost is best defined as:

answer

The value of the best forgone alternative

question

Which would not be considered as a capital resource by an economist?

answer

A van used by a mother to transport the family around

question

The economizing problem for individuals is a consequence of the fact that:

answer

A) Economic means or incomes are greater than economic wants WRONG B) Normative economics is more important than positive economics C) Positive economics is more important than normative economics D) Economic wants are greater than economic means or incomes

question

When an economist says that there is "too much of a good thing," the economist is suggesting that:

answer

A) The marginal benefit of the thing is less than the marginal cost B) Economic goals are complementary C) Economic goals are conflicting D) The marginal cost of the thing is less than the marginal benefit WRING

question

Which of the following is a normative economic statement?

answer

A trade deficit of 20 billion dollars will harm the economy

question

Which question is an illustration of a microeconomic question?

answer

Is the quantity of wine purchased in one year dependent upon the price of wine?

question

The statement in a newspaper that "consumer prices rose last month by 1 percent, and if this trend continues, the annual rate of inflation will be 12 percent for the year" is an example of:

answer

A positive economic statement

question

Assume that a consumer purchases only two products and there is a decrease in the consumer's income. The prices of the two products stay the same. The change in income will result in a:

answer

Shift of the budget line inward to the left

question

Macroeconomics focuses on:

answer

Total output and the general level of prices in the economy

question

As a consequence of the problem of scarcity:

answer

Individuals have to make choices from among alternatives

question

Which is an illustration of a macroeconomic question?

answer

A) Should the salaries of financial executives be regulated by the government? C) Are increasing wage demands by workers contributing to price inflation?

question

When a state government chooses to build more roads, the required resources are no longer available for spending on public education. This dilemma illustrates the concept of:

answer

Opportunity cost

question

Which question is an example of a macroeconomic question?

answer

What policies would be recommended for stimulating national economic growth?

question

The role of the entrepreneur in society is to:

answer

Bring the factors of production together and take the risks of producing

question

Assume that a consumer has $12 in income and she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. For this consumer, the opportunity cost of buying one more apple is

answer

2 bananas

question

Refer to the above table. A change from combination C to B means that:

answer

1 unit of steel is given up to get 15 more units of wheat

question

If the production possibilities curve is a straight line, then:

answer

A) The society can produce more of both goods simultaneously WRONG B) The opportunity cost of producing one good is zero C) The society is capable of producing only one of the goods and not the other D) The law of increasing opportunity costs does not apply

question

Assume that a consumer has $12 in income and she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. If the consumer decides to buy 4 apples, how many bananas can she also buy with the rest of her income?

answer

8 bananas.

question

Which expression is another way of saying "marginal cost"?

answer

Additional cost

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