Which of the following is NOT a factor of production?
A) The effort of farmers raising cattle.
B) The wages paid to workers.
C) Cattle
D) The
... [Show More] management skill of a small business owner.
E) The water used to cool a nuclear power plant.
B) The wages paid to workers.
The ultimate cost of any choice is
A) the dollars expended on the good.
B) what someone else would be willing to pay.
C) the value of the good assessed by an independent auditor.
D) the highest-valued alternative forgone.
E) the after-tax cost to the individual.
D) the highest-valued alternative forgone.
Your friend Jane makes the statement, "The cost of books has increased 100 percent over the past year," she is
A) testing an economic model.
B) making a positive statement.
C) facing a tradeoff of book cost last year and this year.
D) making a normative statement.
E) making a post hoc fallacy.
B) making a positive statement.
When the production possibilities frontier is bowed outwards, the opportunity cost of producing more of one good
A) cannot be determined.
B) increases in terms of the amount foregone of the other good.
C) produces a convex shaped curve.
D) remains constant.
E) decreases in terms of the amount foregone of the other good.
B) increases in terms of the amount foregone of the other good.
The opportunity cost of economic growth is
A) present consumption that a nation gives up to accumulate capital
B) investment that a nation gives up to increase its economic growth.
C) future consumption that a nation gets if it gives up some present consumption.
D) future consumption that a nation gives up to consume more today
A) present consumption that a nation gives up to accumulate capital
In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, Adam can produce either 8 loaves of bread or 8 pounds of butter. We know that Andy has a comparative advantage in the production of
A) bread, while Adam has a comparative advantage in the production of butter.
B) butter, while Adam has a comparative advantage in the production of bread.
C) both bread and butter.
D) bread and neither has a comparative advantage in the production of butter
A) bread, while Adam has a comparative advantage in the production of butter.
Homer and Teddy are stranded on a desert island. To feed themselves each day they can either catch fish or pick fruit. In a day, Teddy could pick 60 pieces of fruit or catch 20 fish. Homer could pick 100 pieces of fruit or catch 150 fish. Which of the following is correct?
A) Only Homer would be better off if Homer specialized in picking fruit and Teddy specialized in catching fish.
B) Both Homer and Teddy would be better off if Homer specialized in catching fish and Teddy specialized in picking fruit.
C) Both Homer and Teddy would be better off if Homer specialized in picking fruit and Teddy specialized in catching fish.
D) Only Homer would be better off if Homer specialized in catching fish and Teddy specialized in picking fruit.
B) Both Homer and Teddy would be better off if Homer specialized in catching fish and Teddy specialized in picking fruit.
Considering only candy bars and fast food meals, if the price of a candy bar is $1 and the price of a fast food meal is $5, we can say that ___________________________________________
A) the relative price of a candy bar is 5 fast food meals.
B) the money price of a candy bar is 1/5 of a fast food meal.
C) the money price of a fast food meal is 1/5 of a candy bar.
D) the relative price of a fast food meal is 5 candy bars
D) the relative price of a fast food meal is 5 candy bars
Consumers come to expect that the price of a gallon of gasoline will decrease next week. As a result, you would expect
A) next week's supply of gasoline decreases.
B) today's supply of gasoline increases.
C) today's demand for gasoline increases.
D) today's demand for gasoline decreases.
E) the price of a gallon of gasoline increase today
D) today's demand for gasoline decreases.
DVDs and CDs are substitutes in production and not related in consumption. If there is an increase in the demand for DVDs that increases the market price of a DVDs, we would expect to see ________________________
A) a decrease in the supply of CDs.
B) a decrease in the quantity supplied of CDs but not in the supply.
C) an increase in the supply of CDs.
D) an increase in the quantity supplied of CDs but not in the supply.
D) an increase in the quantity supplied of CDs but not in the supply.
Beef and leather belts are complements in production. If people's concern about health shifts the demand curve for beef leftward, you would predict that in the market for leather belts there will be _____________________________________
A) a lower equilibrium price for a leather belt that results from an increase in the supply of leather belts.
B) no change in the equilibrium price.
C) a higher equilibrium price for a leather belt that results from an increase in the supply of leather belts.
D) a lower equilibrium price for a leather belt that results from a decrease in the supply of leather belts.
E) a higher equilibrium price for a leather belt that results from a decrease in the supply of leather belts.
E) a higher equilibrium price for a leather belt that results from a decrease in the supply of leather belts.
Suppose that you observe the price of tomatoes decreases after the supply for tomatoes increased. You then observe that people buy more lettuce at any price. These observations suggest that lettuce and tomatoes are ________.
A) normal goods
B) complements consumption
C) complements in production
D) substitutes in consumption
E) inferior goods
B) complements consumption
After you graduate, you have decided to accept a position working at the Bureau of Labor Statistics for $45,000.00 a year. The two other offers you received were working for Wal-Mart for $38,000 and working for Ernst and Young consulting for $42,000. Of these two offers, you would have preferred the job at Ernst and Young. What is the opportunity cost of accepting the position at the Bureau of Labor Statistics?
A) the $45,000 you are paid for working at the Bureau of Labor Statistics
B) the $42,000 you would have been paid working for Ernst and Young
C) the $42,000 you would have been paid working for Ernst and Young and the $38,000 you would have been paid working for Wal-Mart
D) the $38,000 you would have been paid working for Wal-Mart
E) None of the above are correct.
B) the $42,000 you would have been paid working for Ernst and Young
Suppose that the government of New York state promises to decrease taxes to a firm if it decides to stay in New York instead of moving to another state. This policy on the part of the state constitutes ________, to make the ________ of the firm remaining in New York.
A) a command; marginal benefit exceed the marginal cost
B) an incentive; marginal benefit exceed the marginal cost
C) a command; marginal cost exceed the marginal benefit
D) an incentive; marginal cost exceed the marginal benefit
B) an incentive; marginal benefit exceed the marginal cost
Jed had an exam score of 50 percentage points. There is an extra credit assignment that Jed can complete that will raise his exam score by 20 percentage points. Jed has determined that the extra credit assignment will take 10 hours of his time. Jed will complete the assignment he values the
A) additional 20 percentage points more than the first 50 percentage points.
B) wants a higher score.
C) 20 percentage points more than the 10 hours of his time.
D) 10 hours of his time more than the 20 percentage points.
E) 70 percentage points more than the 10 hours of his time.
C) 20 percentage points more than the 10 hours of his time. [Show Less]