Econ Unit 1 Review

1 With regard to food and clothing in the production-possibilities curve, what does Point B represent?

• A combination that can be attained only if all resources are used

• A combination that is impossible for this country to attain under current conditions

• A combination that can be attained only if a technological advance occurs

• A combination that can be attained without using all the country's resources

1 When can Point F on the model production-possibilities curve be attained?

• Introducing new technologies

• Limiting use of available resources

• Using all resources available today

• Requiring workers to concentrate on their work

Globalization has been brutal to midwestern manufacturers like the Paper Converting Machine Co. For decades, PCMC's Green Bay (Wis.) factory, its oiled wooden factory floors worn smooth by work boots, thrived by making ever- more-complex equipment to weave, fold, and print packaging for everything from potato chips to baby wipes.

But PCMC has fallen on hard times. First came the 2001 recession. Then, two years ago, one of the company's biggest customers told it to slash its machinery prices by 40% and urged it to move production to China. Last year, a St. Louis holding company, Barry-Wehmiller Cos., acquired the manufacturer and promptly cut workers and nonunion pay. In five years sales have plunged by 40%, to $170 million, and the workforce has shrunk from 2,000 to 1,100.

Employees have been traumatized, says operations manager Craig Compton, a muscular former hockey player. "All you hear about is China and all these companies closing or taking their operations overseas."

But now, Compton says, he is "probably the most optimistic I've been in five years." Hope is coming from an unusual source. As part of its turnaround strategy, Barry-Wehmiller plans to shift some design work to its 160-engineer center in Chennai, India. By having U.S. and Indian designers collaborate 24/7, explains Vasant Bennett, president of Barry-Wehmiller's engineering services unit, PCMC hopes to slash development costs and time, win orders it often missed due to engineering constraints -- and keep production in Green Bay.

Barry-Wehmiller says the strategy already has boosted profits at some of the 32 other midsize U.S. machinery makers it has bought. "We can compete and create great American jobs," vows CEO Robert Chapman. "But not without offshoring."

—“The Future of Outsourcing,” Bloomberg Businessweek Magazine, 2006

www.businessweek.com (accessed July 24, 2014)

The excerpt provides an example of how the U.S. economy has changed because

of

• growing economic interdependence

• increasing government involvement

• transforming attitudes towards unions

• decreasing demand for skilled workers

Dell Software today announced the release of a fully localized Simplified Chinese

version of Toad for Oracle. The new release marks the latest milestone for Dell

Software’s flagship database development and management solution.

What basic economic question is addressed in the press release?

• What to produce?

• How to produce?

• For whom to produce?

• How much to produce?

Jenny wants to buy a computer and a new television before she leaves for college.

She only has enough money to purchase the computer. Which of the following is

the opportunity cost of purchasing the computer?

• A new television

• College tuition money

• Moving expenses

• new computer

Which of the following economic systems in characterized by a lack of competition?

• Communist

• Capitalism

• Free enterprise

• Mixed

Which of the following best completes the graphic organizer?

• Benefits of the free enterprise system

• Problems of command economies

• Solutions to reducing government debt

• Arguments for expanded government regulation

The basic idea of choice presents which of the problems in economics?

• Decisions produce costs

• People get to decide what they want.

• Businesses can sell what they want.

• Choice is a way of life

David's mother sends him to the grocery store to buy milk. While at the store,

David decides he is hungry and buys a dozen doughnuts for a snack. At the cash

register, David finds that after paying for the doughnuts, he doesn't have enough

money to pay for the milk. David's mother decides it is time for him to get a job

and earn his own money. David's best friend tells him that Deluxe Car Wash is

hiring. He applies and is hired to become a car dryer. David is very excited about

his new job and the money he will soon be earning.

The grocery store is which sector of the circular-flow model?

• Business firms

• Households

• Factor

• Production

In a free market society, the answer to the question about how much to produce is

determined by —

• consumer demand

• profit projections

• census data

• government quotes