Section 1 Practice Questions yessir

Is the following question a positive or normative statement:

Society should take measures to prevent people from engaging in dangerous personal behavior.

• Positive statement; it states a fact

• Normative statement; it states a fact

• Normative statement; it states what a society should do

• Positive statement; it states what a society should do

Is the following question a positive or normative statement:

People who engage in dangerous personal behavior impose higher costs on society through higher medical costs.

• Normative statement; it states a fact

• Normative statement; it states what society should do

• Positive statement; it states what a society should do

• Positive statement; it states a fact

Use the table to answer the question:

The table shows the daily production possibilities for China and Malaysia in producing trucks and coffee using the same amount of resources. Based on the data provided, which of the following terms of trade are mutually beneficial for the two countries?

• 1 ton of coffee for 3 trucks

• 1 ton of coffee for 4 trucks

• 1 ton of coffee for 5 trucks

• 1 truck for 1 ton of coffee

• 1 truck for 5 tons coffee

Michael and Martha run a mechanic shop. In one hour...

• ...Michael can perform eight oil changes or change ten tires
• ...Martha can perform seven oil changes or change fourteen tires

Given this information which of the following is true?

• Martha has a comparative advantage in changing oil

• Martha has an absolute advantage in changing oil

• Michael has a comparative advantage in changing tires

• Michael has an absolute advantage in changing tires

• Michael has an absolute and comparative advantage in changing oil

The table above shows the landscaping productivity of Simone and Irina during an eight hour workday. Simone can mow twelve lawns or trim twenty four trees in eight hours. Irina can mow nine lawns or trim twelve trees in eight hours.

Based on the information in the table, which of the following is true?

• Irina has an absolute advantage in mowing lawns

• Irina has an absolute advantage in trimming trees

• Irina has a comparative advantage in trimming trees

• Simone has an absolute advantage in trimming trees and mowing lawns

• Simone has a comparative advantage in trimming trees and mowing lawns

Which of the following contributes to the economic problem of scarcity?

• Human wants are insufficient

• Resources are unlimited

• Resources are efficient

• Resources are expensive

• Resources have alternative uses

What type of resource is a bulldozer?

• Land

• Capital

• Financial Capital

• Labor

The labor force is made up of everyone who is...

• employed

• old enough to work

• employed or unemployed

• employed or capable of working

The other things equal assumption allows economists to...

• avoid making assumptions about reality.

• focus on the effects of only one change at a time.

• oversimplify.

• allow nothing to change in their model.

• reflect all aspects of the real world.

A city government received a$1

million grant to build swimming pools and skating rinks for youth. Based on the data provided in the graph, what is the opportunity cost of building one swimming pool?

• 0.50 skating rink

• 0.50 swimming pool

• 2 skating rinks

• 2 swimming pools

• 5 skating rinks