Exam 1 Flashcards
Resources are
scarce for households but plentiful for economies.
plentiful for households but scarce for economies.
scarce for households and scarce for economies.
plentiful for households and plentiful for economies.
scarce for households and scarce for economies.
While pollution regulations yield the benefit of a cleaner environment and the improved health that comes with it, the regulations come at the cost of reducing the incomes of the regulated firms’ owners, workers, and customers. This statement illustrates the principle that
trade can make everyone better off.
rational people think at the margin.
people face tradeoffs.
people respond to incentives.
people face tradeoffs.
Economists assume that rational people do all of the following except
weigh the benefits and costs of all possible alternative actions.
respond to economic incentives
undertake activities that benefit others and hurt themselves.
use all available information as they act to achieve their goals.
undertake activities that benefit others and hurt themselves.
Suppose the state of Illinois passes a law that bans smoking in restaurants. As a result, residents of Wisconsin who do not like breathing second-hand smoke begin driving across the border to Illinois to eat at restaurants there. Which of the following principles does this best illustrate?
Trade can make everyone better off
Rational people think at the margin
Markets are usually a good way to organize economic activity
People respond to incentives
People respond to incentives
Refer to Figure 2-1. ________ is (are) unattainable
A
B
C
A and C
C
Refer to Table 2-1. Assume Love’s kitchen only produces cakes and roast chicken. A combination of 20 cakes and 60 roast chickens would appear
along Love’s production possibilities frontier.
inside Love’s production possibilities frontier.
outside Love’s production possibilities frontier.
at the vertical intercept of Love’s production possibilities frontier. sources.
inside Love’s production possibilities frontier.
Refer to Figure 2-4. A movement from ________ is the result of advancements in plastic production technology.
Z to W
W to X
V to X
Y to Z
Y to Z
Refer to Figure 2-6. If the economy is currently producing at point B, what is the opportunity cost of moving to point A?
16 thousand spoons
44 thousand spoons
12 thousand forks
58 thousand forks
16 thousand spoons
Refer to Figure 2-6. If the economy is currently producing at point D, what is the opportunity cost of moving to point A?
0 spoons
12 thousand forks
16 thousand spoons
0 forks
0 spoons
Makeupville faces __________ opportunity costs in the production of mascara and eyeliner.
changing
negative
constant
changing
Use the above graph to answer the following question. If this economy uses all of it’s resources to produce quesadillas, what’s the maximum amount of quesadillas it can possibly produce?
60 quesadillas
40 quesadillas
70 quesadillas
80 quesadillas
70 quesadillas
For each watch that Switzerland produces, it gives up the opportunity to make 50 pounds of chocolate. Germany can produce 1 watch for every 100 pounds of chocolate it produces. Which of the following is true about the comparative advantage between the two countries?
Switzerland has the comparative advantage in watches.
Germany has the comparative advantage in watches and chocolate.
Germany has the comparative advantage in watches.
Switzerland has the comparative advantage in chocolate
Switzerland has the comparative advantage in watches.
Table 2-8 shows the output per month of two people, Ellie and Delilah. They can either devote their time to making marble statues or making marble benches.
Refer to Table 2-8. What is Delilah’s opportunity cost of making a bench?
2 statues
1/2 of a statue
14 statues
None of the above.
2 statues
Table 2-4 shows the output per day of two gardeners, Gabe and Lucy. They can either devote their time to mowing lawns or cultivating gardens.
What is Gabe’s opportunity cost of cultivating a garden?
2 lawns
1/2 of a lawn
None of the above
10 lawns
2 lawns
Suppose Nicole can record two makeup tutorials per hour or she can record four dance tutorials per hour. Angela can record one makeup tutorial per hour or she can record three dance tutorials per hour. Which of the following is true?
A. Nicole has the absolute advantage in makeup tutorials.
B. Nicole has the comparative advantage over Angela in makeup tutorials.
C. Angela has the comparative advantage over Nicole in dance tutorials.
A, B, and C are all correct.
Statements A, B, and C are all incorrect.
Only A is correct.
Only B is correct.
Only C is correct.
A, B, and C are all correct.
Figure 2-9 shows the production possibilities frontiers for Greenland and Iceland. Each country produces two goods, snow cones and popsicles.
Refer to Figure 2-9. Which country has a comparative advantage in the production of popsicles?
Greenland
Assume that Mexico and the United States each has 2400 hours available. Originally, each country divided its time equally between the production of limos and jets. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output of limos increased by
16
Assume that Mexico and the United States each has 2400 hours available. Applying the principle of comparative advantage, which of the following is true?
The U.S. should export jets, and Mexico should export limos.
The U.S. should import limos, and Mexico should export jets.
The U.S. should export limos, and Mexico should export jets.
The U.S. should import jets and Mexico should export limos.
The U.S. should export limos, and Mexico should export jets.
Originally, each producer divided his time equally between the production of novels and the production of poems. Now, each producer spends all his time producing the good in which he has a comparative advantage. As a result, the total output of novels increased by
1 novel
If Perry spends all of his resources and technology producing novels, what is the maximum amount of novels he can produce?
2 novels
Table 2-4 shows the output per day of two gardeners, Gabe and Lucy. They can either devote their time to mowing lawns or cultivating gardens.
Refer to Table 2-4. Which of the following statements is true?
Lucy has a comparative advantage in garden cultivating and Gabe in lawn mowing.
Gabe has a comparative advantage in both tasks.
Lucy has a comparative advantage in both tasks.
Lucy has a comparative advantage in lawn mowing and Gabe in garden cultivating.
Lucy has a comparative advantage in garden cultivating and Gabe in lawn mowing.
Who has the absolute advantage in the production of pinatas?
Christian
Assume that Jordan and Christian each has 180 minutes available. If each producer divides his time equally between the production of stuffed animals and pinatas, then the total combined production between the two producers is
48 stuffed animals and 24 pinatas.
