Final Economics Exam

Name

Jenny is a senior in high school who needs to decide between going to college to earn a degree or beginning a career right away. She weighs her options, including the advantages and disadvantages of each option. What is this decision-making process called?

• a. incentives
• b. thinking at the margin
• c. tradeoffs
• d. cost-benefit analysis

Mary is weighing her options for spending her time after school. She decides to attend basketball practice. In making this choice, she chose not to spend that time doing homework, spending quality time with her friends, and studying for her Econ final; these forgone options are her

• a. trade offs.
• b. opportunity cost.
• c. scarce resources.
• d. incentives.

Jeff wants his brother to do the dishes for him. He decides to offer his brother $5 a week to do the dishes. What is Jeff giving his brother?

• a. A tradeoff
• b. An incentive
• c. A coercive bribe
• d. An invisible hand

If this economy devotes its resources to the production at bullet point B, then it will produce

• 100 Igloos and 60 Icees
• 180 Igloos and 125 Icees
• 140 Igloos and 90 Icees
• 100 Igloos and 600 Icees
• 10 Igloos and 60 Icees

The Production Possibilities Frontier (PPF) measures

• a. the economy of an efficiency.
• b. the efficiency of an economy.
• c. the number of shoes one economy can produce.
• d. how many resources an economy has.

If this economy were producing at 100 guns and 100 butter, what situation would the economy be experiencing?

• a. Inefficiency
• b. Efficiency
• c. Unattainable Production
• d. Opportunity Cost

If this economy were to shift production from 0 guns to 165 guns, what would the opportunity cost be?

• a. 165 guns
• b. 25 guns
• c. 25 butter
• d. 165 butter

Scarcity forces people to make

• a. better use of their time.
• b. higher quality factors of production.
• c. trade offs.
• d. better use of incentives.

Kiley went to school to become a nurse. She attained her degree and clinical experience. Kiley has invested in which factor of production?

• a. Physical Capital
• b. Human Capital
• c. Labor
• d. Land