Which of the following will be included in the study of microeconomics? - ANSWER-The study of the individual consumers in a market
Which of the
... [Show More] following provided the foundation for economic analysis? - ANSWER-The basic ideas of scarcity and choice, along with the trade-offs
Oliver can choose to have a burger, a pizza, a hot dog, or a smoothie. The burger, the pizza, the hot dog, and the smoothie cost the same. The utility gained from the burger is greater than that obtained from the slice of pizza. The utility gained from the slice of pizza is greater than that obtained from the hot dog. The utility gained from the hot dog is greater than that obtained from the smoothie. In such a case, an economizing behavior implies that he will buy the: - ANSWER-burger.
Which of the following is true of a market economy? - ANSWER-Price is used to ration goods only to those who are willing and able to pay the price.
Which of the following is a consequence of a scarcity of resources in an economy? - ANSWER-Decision-makers facing trade-offs between alternate production choices
When the rationing criterion is price, individuals: - ANSWER-will engage in income-generating activities that enhance their ability to pay the price needed to buy the goods and services they want.
Economists argue that: - ANSWER-people are motivated by humanitarian and selfish goals and incentives matter equally in both.
Which of the following statements can be considered a normative economic statement? - ANSWER-The government should recognize that a growing population is a serious problem.
Which of the following statements can be considered a positive economic statement? - ANSWER-If the government increases the tax on automobiles, it will result in a fall in the profits of automobile-manufacturing firms.
Economizing behavior: - ANSWER-is the result of purposeful, or rational, decision-making.
Which of the following is represented by an outward shift in a country's PPF (Production Possibility Frontier) over time, population and prices remaining the same? - ANSWER-Economic growth
The size of a country's "economic pie" is calculated: - ANSWER-as the total dollar value of all goods and services produced during some period of time.
The opportunity cost of a choice: - ANSWER-is subjective and can be determined only by the decision-maker.
The following exhibit shows a production possibilities curve of an economy that produces laptops and wheat at full employment level. An inefficient point of production depicted is: - ANSWER-Point E (the one under the curve)
Which of the following is true of an entrepreneur? - ANSWER-He uses improved techniques to satisfy consumers at a lower cost.
Fiona can choose to have a burger worth $4, a walnut pie worth $2, a hot dog worth $1, or a chocolate mousse worth $3. If the burger, the walnut pie, the hot dog, and the chocolate mousse are expected to yield identical utility for Fiona, economizing behavior implies that she will buy the: - ANSWER-hot dog.
Suppose a quota is imposed on the sale of imported coffee in the U.S. market. This quota is aimed primarily at increasing U.S. employment and the profits of domestic sellers. Which of the following is a secondary effect caused by the quota? - ANSWER-A decrease in consumer surplus due to an increase in the price of coffee
Rational decision-makers continue to acquire information as long as: - ANSWER-the expected marginal benefit from that information exceeds the marginal cost of gathering it.
Which of the following is a result of competition between employers for workers in a market economy? - ANSWER-An increase in the wage rates of individuals
The following exhibit shows the production possibilities curve of an economy that produces laptops and wheat at full employment level. A combination of laptops and wheat that is currently UNATTAINABLE is depicted by: - ANSWER-Point D (the point to the right of the curve)
A student has three options: to go to school, to join a full-time job that pays him $1,550 per month, or to join a part-time job for a monthly salary of $500. Which of the following represents the student's opportunity cost of attending school? - ANSWER-The income from the full-time job that is forgone in order to attend classes
Which of the following explains why the owner of a home is likely to paint and fix it up prior to putting it on the market for sale? - ANSWER-Because they personally gain from the increase in the value of their property that occurs when their property becomes more valuable to others.
Suppose Oliver's marginal utilities from an ice cream cone and a box of chocolate cookies are valued at $6 and $10, respectively. The marginal costs of an ice cream cone and a box of chocolate cookies are $5 and $10, respectively. According to marginal analysis, Oliver should: - ANSWER-purchase the ice cream cone as the net addition to his utility is $1.
During the 2011 civil war, almost all of Libya's oil production was shut down, resulting in a(n): - ANSWER-leftward shift of the world oil supply curve.
Suppose Perylia can produce two goods: barley and corn. If the world price of corn increases by 30 percent more than the price of barley, the producers of Perylia have a strong incentive to: - ANSWER-increase the production of corn as a higher relative price of corn increases their marginal revenue.
Which of the following is true of trade? - ANSWER-It moves goods from those who value them less to those who value them more.
The term "resources" refers to: - ANSWER-all inputs used for producing goods and services.
Which of the following features of socialism distinguishes it from the market system? - ANSWER-Political forces direct the economy.
Which of the following is a statement that properly reflects the "incentives matter" postulate of economics? - ANSWER-Senior-citizen voters are more likely to support political candidates who favors higher Social Security benefits.
Consumer surplus is equal to the: - ANSWER-the difference between the maximum amount consumers would be willing to pay and the amount they actually pay for a good
Mass production leads to labor and machinery efficiencies by: - ANSWER-making it possible for firms to lower their per unit costs.
When the quantity of a good supplied is highly responsive to the price of the good, the supply curve of the good is most likely to be: - ANSWER-flat.
When deciding whether to produce an additional unit of a good, marginal analysis suggests a producer will compare: - ANSWER-the additional (marginal) cost with the additional (marginal) revenue.
The costs of the time, effort, and other resources needed to search out, negotiate, and complete an exchange are called: - ANSWER-transaction costs.
A decrease in the demand for burgers is most likely to result in a(n): - ANSWER-leftward shift of the demand curve for burgers. [Show Less]