question

In a market system scarce goods are allocated through the operation of

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what must be sacrificed in using a resource for its next best use

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Suppose a city block was going to be used for a parking lot. The opportunity cost would be

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greater in New York City because the alternative uses of the block are more valuable

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A student will decide to attend class when

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the marginal benefit of attending exceeds the marginal cost of attending

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Which of the following best describes the concept of utility and economic behavior?

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Satisfaction from consuming goods or services

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a. Which of the following is not a key element of the scientific method?

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Designing data

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b. The scientific method is the technique used by economists to determine

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economic principles

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Indicate whether the following statement(s) applies to microeconomics or macroeconomics: a. The unemployment rate in the United States was 9.7 percent in March 2010.

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Macroeconomics correct

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Indicate whether the following statement(s) applies to microeconomics or macroeconomics:A U.S. software firm discharged 15 workers last month and transferred the work to India.

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Microeconomics

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Indicate whether the following statement(s) applies to microeconomics or macroeconomics: An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise

answer

Microeconomics

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Indicate whether the following statement(s) applies to microeconomics or macroeconomics: U.S. output, adjusted for inflation, decreased by 2.4 percent in 2009.

answer

Macroeconomics

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Indicate whether the following statement(s) applies to microeconomics or macroeconomics: Last week, Wells Fargo Bank lowered its interest rate on business loans by one-half of 1 percentage point

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Microeconomics

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Indicate whether the following statement(s) applies to microeconomics or macroeconomics: The consumer price index rose by 2.7 percent from December 2008 to December 2009.

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Macroeconomics

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Which of the following represents a positive economic statement?

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The unemployment rate is 4.8 percent

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Which of the following represent a normative economic statement?

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The government ought to lower taxes so people have more money

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Economic resources are the

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natural, human, and manufactured inputs used to produce goods and services

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Economists classify resources as

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labor, land, real capital, and entrepreneurs.

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Because economic resources are used to produce goods and services, they are called

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factors of production or inputs

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a. Why is money not considered to be a capital resource in economics? Money is not considered a capital resource because money is

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not productive

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Why is entrepreneurial ability distinct from labor even though both are considered as a category of economic resource?

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Because entreprenuerial ability is not directly engaged in production.

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What are the major functions of the entrepreneur?

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Innovate,Take risks,Make decisions

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Specify the typical shapes of marginal-benefit and marginal-cost curves.

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The marginal benefit curve is downward correct sloping.The marginal cost curve is upward correct sloping.

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b. With these curves, the optimal allocation of resources to a particular product will occur when

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MB = MC

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If current output is such that marginal cost exceeds marginal benefit, should more or fewer resources be allocated to this product?

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Fewer

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How (if at all) do each of the following events affect the location of a country's production possibilities curve? The quality of education increases

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Curve shifts outward

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How (if at all) do each of the following events affect the location of a country's production possibilities curve?The number of unemployed workers increases

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No change

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How (if at all) do each of the following events affect the location of a country's production possibilities curve?A new technique improves the efficiency of extracting copper from ore.

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Curve shifts outward

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How (if at all) do each of the following events affect the location of a country's production possibilities curve?A devastating earthquake destroys numerous production facilities

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Curve shifts inward

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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?

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

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Studies indicate that married men on average earn more income than unmarried men of the same age and education level. From this statement, we can conclude that

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there is a correlation, but marriage is not necessarily the cause of higher income for married men

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Potatoes cost Janice $1.10 per pound, and she has $5.00 that she could possibly spend on potatoes or other items. If 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, how many pounds of potatoes will she purchase? What if she only had $3.00 to spend?

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Janice will purchase 2 correct with her original $5.00 of income.Janice will purchase 2 correct when her income is $3.00

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Pham can work as many or as few hours as she wants at the college bookstore for $11 per hour. But due to her hectic schedule, she has just 18 hours per week that she can spend working at either the bookstore or at other potential jobs. One potential job, at a café, will pay her $12 per hour for up to 7 hours per week. She has another job offer at a garage that will pay her $10 an hour for up to 5 hours per week. And she has a potential job at a daycare center that will pay her $8.50 per hour for as many hours as she can work. If her goal is to maximize the amount of money she can make each week, how many hours will she work at the bookstore?

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11 correct hours

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In a market system scarce goods are allocated through the operation of

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market prices that are determined by consumers and producers acting in their own self-interest

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In a command economy scarce goods are allocated by

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a government-appointed planning board based on the board's long-term priorities.

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Self-interest helps achieve society's economic goals because

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as consumers and producers exercise their freedom to act in their own self-interest markets will produce the desired goods at the lowest possible cost.

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There is a wide variety of desired goods and services in a market system because

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individual wants are diverse.

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What is produced is ultimately determined by

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consumers because if the goods offered are not what consumers want, consumers will not buy them

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The market system depends on private property ownership and the protection of private property rights to

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provide an incentive to maintain property and allow for the orderly transfer of property ownership

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The use of capital in the production process

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improves efficiency, increases output, and provides for growth

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"Division of labor" means that workers

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specialize in tasks that take advantage of their individual abilities and skills

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When an economy relies on specialization,

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trade enables individuals to obtain the goods in which they do not have a specialization

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Barter requires that you

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find a person who has what you want and a person who needs what you have to offer.

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The use of money

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provides a common value that makes buying and selling transactions simpler than would be the case with barter.

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Consider the statement: "We want money only to part with it." When people express a desire to 'have money,' they really want

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the goods and services that money can buy

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Consider the following statement: "The market system is a profit-and-loss system." This statement is

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true, because producer decisions are motivated by the attempt to earn profits.

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Consider the following statement: "Competition is the disciplinarian of the market economy." This statement is

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true, because when producers face competition they are driven to provide goods and services at the lowest possible cost

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Some large hardware stores such as Home Depot boast of carrying as many as 20,000 different products in each store. This volume of goods is the result of

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the choice of consumers regarding what to purchase to satisfy their wants and the choice of producers regarding what to produce to maximize profits

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The emergence of the MP3 (iPod) technology is an example of "creative destruction" because

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it has replaced compact discs as a technology used for the storage and transfer of music

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The phrase "invisible hand" means that

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market prices provide information to consumers regarding products they wish to purchase, and to producers regarding products they wish to produce

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In market economies, firms rarely worry about the availability of inputs to produce their products, whereas in command economies input availability is a constant concern because

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in market economies, buyers of inputs know that sellers want to earn profits.

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In the circular flow model

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resource markets provide for the exchange of labor and product markets provide for the exchange of goods and services

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In the circular flow model

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businesses sell goods and buy labor; households buy goods and sell labor.

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In the circular flow model there is a flow of

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real goods and services and a flow of money.

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Millions of economic resources tend to get arranged logically and productively rather than haphazardly and unproductively because

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private property owners are motivated to protect and maximize the benefits from their property. correct

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Which statement is consistent with the law of demand?

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A reduction in market price will lead to an increase in quantity demanded. correct

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Which of the following characteristics lead to a downward-sloping demand curve?

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Diminishing marginal utility, An increase in purchasing power as market price decreases

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How is a market demand curve derived from individual demand curves?

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Add up quantities demanded by all individual consumers for each price correct

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What are the determinants of demand?

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Income, Price of related goods, A good's own price,Tastes and preferences, Number of consumers

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Which statement is consistent with the law of supply?

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An increase in market price will lead to an increase in quantity supplied. correct

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Which of the following characteristics leads to a upward-sloping supply curve?.

answer

Increasing opportunity costs Increasing marginal costs

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How do you derive a market supply curve from individual supply curves?

answer

Add up quantities supplied by all individual producers for each price correct

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What are the determinants of supply?

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Technology Factor prices Number of producers

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If you compute the price elasticity of demand using a quantity of tickets from 1 to 8 and using a quantity of tickets from 1,000 to 8,000, the value of the price elasticity of demand is

answer

the same because the percentage change in quantity will remain the same.

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If a university passed a rule stating that university students must live in university dormitories, what effect would this have on the price elasticity of demand for dorm space? What effect would this have on room rates?

answer

The price elasticity of demand would be more inelastic, and room rates would increase

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A firm charges different groups of customers different prices in order to

answer

increase revenue and profit. Lower afternoon movie prices are an example of this type of pricing

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