compilation: econ quiz 1 (for my consumption only)

An indifference curve shows all

• • possible equilibrium positions on an indifference map.

• equilibrium combinations of two products that are obtainable with a given money income.

• • combinations of two products that will yield the same utility to a consumer.

• possible combinations of two products that a consumer can purchase, given her income and the prices of the products.

• none of the above

If an economy is operating on its production possibilities frontier (PPF), are there any unemployed resources in the economy?

• • Yes, because if there weren't any unemployed resources the economy would be producing beyond its PPF.

• No, because if there were any unemployed resources the economy would be producing below its PPF.

• It depends on whether the economy's PPF is a concave (downward-sloping) curve or a straight line.

• Yes, because there are always some natural resources that are unemployed.

Within the production possibilities frontier (PPF) framework, choice is depicted by the

• PPF itself.

• PPF being bowed outward.

• need to select among the points making up the PPF.

• straight-line PPF.

If a person's income falls, his or her budget constraint moves

• inward toward the origin, and its slope changes.

• outward away from the origin, and its slope remains the same.

• inward toward the origin, and its slope remains the same.

• outward away from the origin, and its slope changes.

• none of the above

The increased production of lamps comes at constant opportunity costs in terms of bookshelves. This means

• that it takes more resources to produce a lamp than a bookshelf.

• that it takes fewer resources to produce a lamp than a bookshelf.

• that for every lamp produced, a constant number of bookshelves is forfeited.

• that for every lamp produced, a different number of bookshelves is forfeited.

Suppose you are eating buffalo wings at a local happy hour. The total utils from doing so after the fourth, fifth, sixth, and seventh wings are 80, 116, 136, 146, respectively. The marginal utility of the seventh wing is __________ utils.

• 14

• 146

• 10

• 20.9

In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, John can produce either 8 loaves of bread or 8 pounds of butter. The opportunity cost of producing 1 pound of butter is

• 1/3 hour for Andy and 1 hour for John.

• 1 hour for Andy and 1 hour for John.

• 3 loaves of bread for Andy and 1 loaf of bread for John.

• 1/3 loaves of bread for Andy and 1 loaf of bread for John.

• none of the above

 

Suppose you just finished your third plateful of Thanksgiving dinner and it yielded zero units of additional satisfaction. Should you go back for more?

• Why not? Since the third plateful gave you zero units, the fourth can't give you any less than zero.

• No way. You could get negative utility from the fourth plateful.

• Yes or no. It won't make any difference because your total utility is at its peak.

• Yes. If you received zero units of satisfaction from the third, then obviously the law of diminishing marginal utility is not working in this case.

Which of the following statements is true

• The less you have of any one good, the less you would be willing to pay for one more unit of it.

• The less you have of any one good, the more you would be willing to pay for one more unit of it.

• The amount you have of any one good does not influence the price you would be willing to pay for it, but it does affect the marginal utility received from consuming a particular unit.

• none of the above

Which of the following statements is true?

• In a world of efficiently used scarce resources, more of one good necessarily means less of some other good.

• The law of increasing opportunity costs assumes that all people have the same ability to produce goods.

• Inefficiency implies that it is impossible to get more of one good without getting less of another.

• Even if a country has unemployed resources, it can still be operating on its production possibilities frontier (PPF).