Quiz 1 (Chapters 1 and 2)

Question 1

An increasing fertility rate in developing countries:

Answer 1

Increases in pressure on global food supplies because the rate of growth in agricultural yields will likely increase at a slower rate.

Question 2

Demographers at the United Nations Population Division, predict that the global population will grow from 7 billion to 9 billion by 2050, and to 11 billion by 2100. Their current forecast is that the global population will plateau at about $11.3 billion. Based on our classroom discussions, which of the following would best explain why the UN believe the population will plateau in 2100.

Answer 2

Peak child was reached in the year 2000 and the average global fertility rate is expected to be 2 in 2100.

Question 3

Microsoft filed a lawsuit against people who spam and a web-site owner who hosted spam services. A spokesman for Microsoft said that Microsoft was “trying to change the economics of spam” by increasing the cost of being a spammer. An economist would most likely agree with which statement about Microsoft’s actions?

Answer 3

Microsoft’s approach of trying to change the costs of spamming is the most effective way to change behavior.

Question 4

The economics of something is this –

Answer 4

The supply and demand of something.

Question 5

Lupita buys cell-phone services from a company that charges 30$ per month. For that 30$ she is allowed 600 minutes of free calls and then pays 25 cents per minute for any calls above 600 minutes. Lupita has used 300 minutes this month so far. What is her marginal cost per minute of making 2 more calls lasting 10 minutes each?

Answer 5

Zero.

Question 6

A restauranteur invests $600,000 in her restaurant over the course of 3 years; she also works 12 hour days 6 days a week managing the operation. The restaurant loses money in every year of operation. The restauranteur works to reduce costs but they cannot be cut further; likewise, she engages in additional marketing and other strategies to increase revenue but she is unable to increase it beyond the current level. An auctioneer has told her that all the assets of the restaurant would fetch $200,000 at auction. Which of the following decisions best demonstrates economic reasoning?

Answer 6

The restaurateur ignores $400,000 of the $600,000 financial capital investment and the full cost of her labor investment, but considers $200,000 of the $600,000 financial capital investment - she has estimated that this is the resale (recoverable) value of her investment - in her decision as to whether to continue or discontinue operations.

Question 7

Which of the following are the main constraints to feeding a growing global population according to the article “No Easy Fix” in the Economist?

Answer 7

Land, soil fertility, and water.

Question 8

Research suggests that a high-quality system of Pre-K education would help to offset the adverse effects on learning in low socioeconomic status households. The mayor of NYX has proposed a system for NYC, and former President Obama advocated for a national system in his 2012 State of Union speech to Congress. Economists using economic reasoning would use which of the following to determine whether the United States should create a high-quality universal system of Pre-K education?

Answer 8

An analysis of the net gain of the policy to society through an examination of marginal benefits and costs.

Question 9

Suppose you paid $3,000 to take this course, which meets 30 times, for one hour a class, during the course of the semester. Instead of attending class you could have either worked as a short-order cook for 10$ an hour or waited tables for 8$ an hour. Given this info, the opportunity cost of attending each class session is:

Answer 9

10$.

Question 10

When your wages rise, the:

Answer 10

The opportunity cost of an hour of leisure increases.

Question 11

Research has demonstrated an inverse relationship between educational attainment and smoking tobacco products in the US. Which of the following best demonstrates that relationship?

Answer 11

When educational attainment increases, smoking rates decrease.

Question 12

England has a relatively cool and cloudy climate, which is ill-suited for grape growing. It can produce 200 units of wine for every 400 units of cloth. Portugal, meanwhile, has a relatively warm and sunny climate, good for growing grapes. It can produce 200 units of wine for every 100 units of cloth. Which country has the higher opportunity cost of producing cloth?

Answer 12

Portugal: 2 units of wine for every unit of cloth.

Question 13

The principle of increasing marginal opportunity costs states that the initial opportunity costs are:

Answer 13

Low but they increase the more you concentrate on the activity.

Question 14

What point would be unattainable on a production possibilities curve?

Answer 14

Any point that is on the outside of the curve and not touching it.

Question 15

Economic efficiency involves achieving a goal as:

Answer 15

Cheaply as possible.

Question 16

Research has demonstrated a direct relationship between obesity rates and states where a majority voted for Donald Trump rather than Hillary Clinton in November 2016. Which of the following best explains the relationship?

Answer 16

States that voted for Trump have higher rates of obesity than states that voted for Clinton. It is unlikely causality is present in this relationship.

Question 17

Mexico has a comparative advantage in producing corn:

Answer 17

If its opportunity cost of producing corn is lower than the opportunity cost in other countries.

Question 18

James Surowiecki, in his New Yorker piece “That Sunk Cost Feeling”, argues that sunk costs are often included in decision making because:

Answer 18

Reputational investment clouds the judgment of decision-makers.

Question 19

Which of the following would most likely slow the rate of increase in the global population?

Answer 19

An increase in female education.

Question 20

Dorm rooms are not usually allocated by markers. Allocating dorm rooms is:

Answer 20

An economic problem.

Question 21

Redzepi has an absolute advantage over any recent CIA graduate in both menu development and vegetable prep (i.e. he is better at both). On the basis of this information and using the theory of comparative advantage which of the following would you advise:

Answer 21

Redzepi likely has a comparative advantage in menu development and so should hire the recent CIA graduate for vegetable prep because the recent graduate has a comparative advantage in vegetable prep.

Question 22

The closing of the municipal landfill in Poughkeepsie will cause a significant increase in the cost for the city to dispose of the city’s household waste. With no landfill, the city will have to transport the waste by barge and rail to a landfill in PA. An economist is hired as a consultant to design a plan for the city of Poughkeepsie that will reduce the amount of household waste produced by the city’s residents. Which of the following would most likely achieve the desired outcome according to economics?

Answer 22

An increase in residential property taxes to cover the increased cost of waste disposal.

Question 23

Two economists published a book entitled The Three Trillion Dollar War: The True Cost of the Iraq Conflict. Their cost estimates vastly exceed those of the federal government. Which of the following best explains the cost difference?

Answer 23

They likely included the opportunity costs of the war spending in Iraq, while the government did not.

Question 24

The process of “land grabbing” refers to:

Answer 24

Corporations, sometimes with the assistance of governments, buying or leasing large land tracts in the developing world.

Question 25

Demographers forecast that the global population is likely to stabilize at approximately 11 billion around the year 2100. Which of the following best explains their forecast?

Answer 25

Rising incomes in what today we call the developing world will act as a disincentive to childbearing.

Question 26

Which of the following best describes the relationship between the opportunity cost of childbirth for a woman and the number of children a woman chooses to have?

Answer 26

Inverse relationship.