question

A debate does on in your head: should you study hard or hang out with your friends to maximize the fun you will have in college? In your first-semester, "Principles of Economics" class, you learn that this an example of an...

answer

opportunity cost

question

While in class, you realize that there are more people in the classroom than there are seats. Across the hall, you notice a large, empty lecture hall and wonder why the university is not operating at...

answer

efficiency

question

The next week, you visit your counselor, who explains the benefits of various majors. Biology majors are better prepared for medical school, computer programmers find jobs in dot-com era industries and with software companies, and economics majors develop quantitative and critical-thinking skills that are particularly valuable in private industry, government, research, and advanced education. As your counselor continues to talk, you recognize that she is offering you different _____ to choose a particular major.

answer

incentives

question

In the end you select economics as a major with an emphasis on macroeconomics. Your roommate picks microeconomics and you know that through _____ you can learn more together than if you each tried to learn each subject individually.

answer

specialization

question

The county of Ivalice is a land rich in magic and known for its mercenary clans that can be hired out for money. The economy is known to run on a basis of "organized chaos", where the queen is just a figure head and lets the economy run on its own. People switch jobs all the time, and there are a variety of bazaars selling intriguing artifacts. Some stores specialize in tons of magic spellbooks; others sell a wide assortment of weapons, such as knives and swords. What economy is it?

answer

Market economy

question

What is considered organized chaos?

answer

The latest singing sensation, Hurdy and the Bros, in an attempt to increase music sales, sells its CDs at $5 each, $1 cheaper than another popular band Save the Queen, a regional smithing guild, chooses to make and sell fewer swords when the price of steel increases Sprohm is a town known for its low income tax. To better his living situation, Marche moves to Sprohm to take advantage of the lower living cost Kopopo! Delivery, a transporter business, routinely uses a blimp to transport food supplies from Carnoa to Aisenfield, without hiccups

question

Rank each of the following statements with regards to whether the economic organizations in each statement are more market-oriented (aka laissez-faire) or command-orients (aka centrally planned).

answer

MARKET-ORIENTED ACTIVITIES -buyers and sellers make all production/consumption decisions -the government attempts to induce certain production/consumption decisions using monetary incentives -the government regulates some production/consumption decisions -the government makes all production/consumption decisions COMMAND-ORIENTED ACTIVITIES

question

Daniel is a baker who has decided to create his own brand of chain restaurants, Short and Sweet. He negotiates with three suppliers for weeks and ultimately signs contracts with these suppliers. Francis, who owns a new sugar plantation, agrees to sell Dan sugar on condition that Dan helps him advertise his sugar. Diana runs an orchard and provides Dan with fruit. She enters into the partnership knowing that she can dramatically increase her profits if she can sell fruit to Dan. Lastly, Ryan, who owns a mill, decides to purchase a new piece of machinery so that he can sell Dan flour at a lower price than his competitor. The end result of Dan's interactions with his suppliers is that folks in his neighborhood have a chance to buy delicious baked goods at reasonable prices. This is an example of...The correct term from above is a key idea of...

answer

the invisible hand; Microeconomics

question

Which is NOT an example of a behavior exhibited in a market economy?

answer

The president of the European country of Semolina decrees that pasta must be consumed at all meals in an effort to help domestic pasta makers

question

Which are examples of a behavior exhibited in a market economy?

answer

-Nettoyer decides to introduce a soap scent, Pomegranate, in response to Schoon's new soap scent, Blood Orange, and Sauber's award winning scent, Tangerine. -Despite the advice of its business partners, Puna discontinues its most popular lines of clothing, and choose instead to produce retro jean jackets and purple sweatpants, thinking that jean jackets and sweatpants are bound to make a fashion comeback. -For their wedding, Alex and Erika choose Matte Photography instead of Pro Finish Photography, since Matte Photography is cheaper.

question

Suppose that the video game company, Ultravision, realeases a new game called "Call of Obligation: Modern Combat 3." This can be analyzed using tools from both microeconomics and macroeconomics. Classify.

answer

MICROECONOMICS -How do they choose to market? -How much will they charge for the game? -How much will they pay the developers of the game? -Is the company able to sell all the games it produces or do they need to produce more? MACROECONOMICS -Have the millions of dollars that people have spent on video games worldwide affect the GDP in their respective countries? -Has the country's unemployment rate changed as the company hired a huge team of workers to develop the game? -How much less economic output occurs countrywide because workers call in sick to stay home and play games?

question

On Black Friday, there are huge sales for electronics at many retail stores. David must decide between buying a camera at one store or a flat screen TV at another store, and buying one means losing out on the ability to purchase the other

answer

opportunity cost

question

An educational software company wants to expand the number of economics questions that it offers and is considering hiring another economist. It compares how much adding another worker will improve the product with the additional cost.

answer

marginal decisions

question

Ava finds that there is not enough time after work to have dinner, exercise, and watch TV, and she must make choices about how to use her limited time

answer

resource scarcity

question

to entice student to keep up-to-date wit economic current events, an instructor offers extra credit to student for participation in an online discussion forum, and this sparks a lively debate about environmental policy

answer

responding to incentives

question

Thanksgiving lunch is an overwhelming challenge. A high priority for you this year is to decide what you want to eat, how much you want to eat, and how you will divide your time between eating and talking. This choice will be made by _____. This year you are in charge of making either pie or glazed ham. You realize you only have a little sugar left and the stores are closed. As a result of ______ you tell your potluck organizer you will make the ham, as it requires less sugar. To maximize ____, your family chooses to arrange the good in a buffet line style so that everyone can funnel through and get what they want. For the sake of ____you let your grandparent go first so that the distribution of food is more even than a free for all. Despite it being a buffet, your parents heap green bean casserole onto your cousins' plates, promising a large piece of pie if they eat it all. You realize you need no such ____ to eat the casserole. When dessert is served, you randomly hand out different types of pie for people to consume. You allow people to trade arund until there are no trades left and ____ has been reached.

answer

marginal analysis; resource scarcity; efficiency; equity; incentive; equilibrium

question

Which of the following demonstrates a scenario with no opportunity cost?

answer

-Its Friday night and you have no obligations the next day, so you stay up late talking and hanging with friends -The chemistry club is giving out free pizza for lunch to all who come to their table to get it -Naomi, age 8, is at a bookstore and chooses to buy a book about a young wizard instead of a calculus book that she would never open -Chez Moi and Chez Nous, two premiere Frenchresturants with three Michelin stars, both offer you a full time sous chef job at the same salary. You are ecstatic because you know it is a win-win scenario and choose to work for Chez Nous

question

The owner of a snow cone trailer realizes that the demand for snow cones is low during the winter, and thus, closes shop until the temperature warms back up near summertime

answer

market efficiency

question

the local river has so much pollution that three-eyed fish are forming. The government responds by regulating the amount of chemicals that can be dumped

answer

government intervention

question

at a high end restaurant, the owner has one chef at a meat station, one at a veggie station and one chef who has an artistic eye, plate the food they are given. The result is increased speed, as more customers get serviced during the evening

answer

specialization

question

during the summer, a bumper crop of oranges in Florida causes a surplus in the supple of oranges nationwide. As a result, prices fall to compensate for the surplus and civilians enjoy the fruit of the farmers labor

answer

equilibrium

question

Charlie, doing some websearching with StumbleUpon, discovers that more houses today have electricity, air conditioning, and a car. What changed between the early 20th century and present day that allowed this to happen? In which field do researchers focus on investigating the phenomena described above?

answer

There has been economic growth in our society; economics

question

residents of a town choose to support their local farmers by using their food budget to purchase all their produce from the nearby farmers' markets, increasing the incomes of small farms, compared to corporate plantations

answer

one individual's expenses are another individual's income

question

a banking policy that is enforced across the U.S. by all banks is a $5 charge for every purchase made on a debt or credit card. This policy causes consumer spending to plummet, and consequently, results in an economic depression

answer

the relationship between overall spending and production capability

question

the government lowers income taxes for all people. this results in more income for families, and consequently, increased spending in an otherwise slumbering economy

answer

government policies can alter spending

question

BOGO is an online coupon provider that has daily specials each day where if you buy the coupon for $15, the resulting gift certificate you receive provides $36 and the gift certificate doesn't expire. For one day only, BOGO decided to make a lunch coupon that provides at a dollar gift certificate worth $36 for a particular restaurant until it sells out. This is a marketing strategy to get BOGOs name out. BOGO sells one coupon per customer. 1. because this is an opportunity of a lifetime and every student will buy it for the prospect of cheap lunch, there is no opportunity cost to purchase the coupon. 2. This one day deal is an incentive for people to buy BOGO coupon, as it will provide a meal much cheaper than what they could buy 3. By only allowing one coupon per customer, more consumers got to buy a coupon and BOGO made its promotion more equitable to the masses. 4. If this $1 deal was for a different restaurant 100 miles away from the university in an extremely rural location, significantly fewer people would purchase the BOGO deal.

answer

1. False 2. True 3. True 4. True

question

Which of the following scenarios would least likely change an individual's behavior?

answer

In an effort to make people eat healthier, the city of Bakersville tells its residents to eat wheat bread instead of white bread

question

Britannia was a thriving empire in its golden age. Business was booming and they were the center of international trade under the leadership of Emperor Raphael III. His empire's pride and joy was the trading of green and black tea and decreed to have their entire economy built around it. However, in the mid 1800's, Britannia experienced a severe economic downturn when the other nations of the world created an embargo on tea from Britannia, which led to civil strife due to thousands of workers being laid off. A downward fluctuation in the economy like this is known as... The correct term from above is a key component of...

answer

a recession; Macroeconomics

question

Suppose a farmer produces both beans and corn on her farm. If she must give up 16 bushels of corn to be able to get 6 bushels of beans, then her opportunity cost of 1 bushel of beans is _______.

answer

2.67 bushels of corn (16/2)/(6/3)=8/3=2.67

question

comparative advantage

answer

the ability to produce a good or service at a lower opportunity cost than another

question

When trading with more developed countries

answer

less developed countries have a comparative advantage in the production of some goods or services

question

Vincent and Jean are two cooks who work in a village. Each of them can either bake cakes or make pizzas. Every ingredient is readily available to them, and the only scarce resource is the cooks' time. Vincent cake bake 10 cakes or make 5 pizzas in an hour. Jean can bake 12 cakes or make 8 pizzas in an hour. Which cook has absolute advantage in baking cakes? Which cook has the comparative advantage in baking cakes? Which cook has the absolute advantage in making pizzas? Which cook has the comparative advantage in making pizzas?

answer

Jean; Vincent; Jean; Jean

question

Assume Italy and Niger can both produce grain and dates, and that the only limited resource is the farming labor force, meaning that land, water, and all other resources are plentiful in both countries. Each farmer in Italy can produce 10 tons of grain or 5 tons of dates in a season. In Niger they can produce 10 tons of grain of due to the climate 25 tons of dates. Which country has the absolute advantage in producing dates? Which country has comparative advantage in producing dates? Which country has the absolute advantage in producing grain? Which country has the comparative advantage in producing grain?

answer

Niger; Niger; Neither; Italy

question

The data is in units of output per hour of work. Japan produces 6 digital cameras or 3 personal computers an hour. The U.S. produces 8 digital cameras or 2 personal computers per hour. Japan has an ____ advantage in producing ______.

answer

absolute; personal computers

question

countries specialize in the production of goods for which they have a comparative advantage

answer

true

question

it can be mutually beneficial for two nations to specialize in goods for which they have a comparative advantage and then trade with one another

answer

true

question

absolute advantage is the source of potential gains from specialization and trade

answer

false

question

a nation will not have a comparative advantage in a product if it does not also have an absolute advantage in the production of that good

answer

false

question

the process of specialization and trade has positive net benefits and is therefore beneficial to everyone

answer

false

question

a reduction in the reserve requirement is a form of expansionary monetary policy

answer

positive

question

the government is right to continue to financially support third world countries through foreign aid programs

answer

normative

question

the price of oil should be increased because it has a negative impact on the environment

answer

normative

question

normative statements are studied in many economic courses

answer

positive

question

if the price of coca-cola rises, this will probably lead to people celebrating in the streets of Atlanta (where coca-cola is headquartered)

answer

positive

question

good childhood nutrition should form a key part of any government public health program

answer

normative

question

when two countries choose to partake in international trade, it is a mutually beneficial activity for both countries

answer

true

question

through specialization and trade, it is possible for a country to consume a combination of goods that is beyond its original production possibilities frontier

answer

true

question

wealthier countries always benefit more from international trade than poorer countries

answer

false

question

countries trade for goods in which they do not have a comparative advantage and therefore, would never trade with nations that have similar resource endowments

answer

false

question

Le Moulin Rouge is one of many can-can show makers and they choose to increase the rice of their shoes $10. They don't understand why they can no longer sell any of their shoes

answer

competitive market

question

Le Grand Jatte, owner by Mr. Seural, runs a lawn mowing service and thanks to new lawn mowers is able to be more efficient and charge $2 less per lawn mowed. They have an overwhelming demand for lawns to be mowed.

answer

competitive market

question

water lilies, one of many flower farming companies, decides to grow an extra acre of tulips

answer

competitive market

question

Starry Night, 1 of 3 companies that sells stars to the public, needs months for its board of directors to make a decision whether to auction more stars or not

answer

non-competitive market

question

Mondrian House, 1 of 2 construction firms, decides not to change the price of its consultations

answer

non-competitive market

question

Haystacks, a pharmaceutical giant, after conferring illegally with the other big fish in the market, Guernica, chooses to decrease the supply of its allergy medicines

answer

non-competitive market

question

Persistence of Memory, 1 of a small handful of plastic providers, thinks it can change the market price by supplying more plastic from an influx of clocks it can melt

answer

non-competitive market

question

upward pressure on price

answer

1. an impending nuclear holocaust causes people to stock up on Twinkie's, a popular cake snake provided by many companies 2. "The Lion King" at the Disney store has 9 million orders for the DVD when the store in fact, only has 1 million copies. They told the public there would be 9 million copies 3. the flu vaccine was found to be contaminated and consequently recalled during fall and winter months

question

downward pressure on price

answer

1. sub-zero weather in NY causes people to become disinterested in watching the Super Bowl live. What happens to ticket price in the scalping market? 2. the Nile River floods this year add an exceptional amount of silt to the soil, resulting in increased crops of cotton 3. an outbreak of mad cow disease causes Americans to abstain from eating beef

question

Andrew, a poor college student, drinks coffee late at night. He has no income and is buying cheap coffee, such as Beanlightened, that he grinds and then brews. The coffee tastes bad but its enough caffeine. He goes to Starbucks occasionally. After he graduates, he gets a job at a database firm as a prgrammer. His income is $75,000 a year. He ends up buying coffee daily at SB. This helps him get a Gold Star Reward Card, which allows him to get free refills. In economic terms, SB coffee is a(n) ____, while Beanlightened coffee is a(n) _____. Andrew's demand for SB changed as a result of....

answer

normal good; inferior good; a change in income

question

The price of goose feathers, an input for pillows, increase sharply

answer

supply curve changes

question

researchers develop a higher yielding, insect repellant strain of rice

answer

supply curve changes

question

Michael, after working at Nortel for over 20 years, is fired from his job. Michael eats out less as a result.

answer

Demand curve changes

question

Spam unveils a new flavor, BBQ, which has students intrigued and as such transition from buying ham to spam

answer

demand curve changes

question

In the 1960s, many more babies were born, increasing the world population and thus the potential number of consumers

answer

demand curve changes

question

iDecide, a consulting firm, joins the market for accounting

answer

supply curve changes

question

hair gel and hair wax are substitutes both in consumption and production. The price of hair gel decreases

answer

Demand and supply curve changes

question

Shift of the Demand Curve

answer

-out-n-in burger, joint with an absurd national following in the US, sells more burgers as the price of chxicken increases -after it earns 1st prize in the spicy category of a ramen tasting competition, college students buy more Lamian brand ramen noodles -Last Hope, an energy drink company notices students are desperate during finals and change their buying behavior -In the country of Weskia, designed to sag shorts are no longer in vogue and sales drop off as a result

question

Movement along the Demand Curve

answer

-Nettoyer raises the price for its laundry detergent, which results in less sales and strange scents around college dorm floors -Le Burear et Chaise offers a one weekend clearance sale on its old model of desks, which causes students to rush to upgrade their dorm furniture

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