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WorksheetsECN 151 Exam 1 SP 23
Total questions: 26
Worksheet time: 23mins
Economics is primarily the study of
how to make money in the stock market
how to operate a business successfully
the allocation of scare resources in an effort to satisfy wants that are virtually unlimited.
the methods business firms use to reduce their costs of production.
The economic way of thinking is
a body of statistical data that indicates how an economy should be organized.
a set of complex, highly abstract theories that provides persons skilled in statistics with the information necessary to tell others what choices they should make.
a set of basic concepts that helps one understand human choices.
a set of historical generalizations that indicates what goods should be produced.
The opportunity cost of going to college is
zero, since a college education will allow a student to earn a larger income after graduation.
the value of the best opportunity a student gives up to attend college.
zero for students who are fortunate enough to have all of their college expenses paid by someone else.
the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses.
Which of the following is a normative economic statement?
If social security were to be privatized, workers would earn a higher rate of return on their retirement contributions.
An increase in spending on airport security will reduce the number of hijackings.
Companies should be concerned with more than just their profits.
If we doubled the size of welfare payments, we would reduce the number of homeless persons.
The fallacy of composition is the fallacious view that
association does not necessarily indicate causation.
what is true for the individual will also be true for the group.
economic activity will benefit everyone.
it is possible for the whole to be greater than the sum of the individual parts.
Air travel from New York to Miami costs $300 and takes 6 hours. A bus ticket between the cities costs $150 and takes 56 hours. Other things constant, the minimum value of one's time that would induce a rational individual to fly rather than drive would be
$50 per hour.
$5 per hour.
$1 per hour.
$3 per hour.
In voluntary exchange, if the seller of a product gains,
the buyer must lose an amount equal to what the seller gains.
the buyer will generally lose an amount greater than the gain to the seller.
the buyer must also gain; mutual gain provides the foundation for exchange.
someone else must lose an equal amount.
When private ownership rights are well-defined and enforced, owners
have little incentive to take care of things.
can ignore the wishes of others, without bearing the cost.
can do anything they want with their property.
can be held accountable for damage to others through misuse of their property.
A point inside the production possibilities curve represents a combination of goods that is
attainable.
unattainable.
inefficient.
efficient.
Using a production possibilities curve, a technological advance that increases the amount of output for the same amount of inputs would be illustrated as
an inward shift of the curve.
an outward shift of the curve.
a movement from one point to another point along the curve.
a movement from a point on the curve to a point inside the curve.
The economic principle that states that individuals or nations can gain by specializing in the production of goods that they produce cheaply and exchanging for other desired goods that they could only produce at a higher cost is
the law of absolute advantage.
the law of comparative advantage.
the exchange maximum principle.
the law of production possibilities.
If a large percentage increase in the price of a good results in a small percentage reduction in the quantity demanded of the good, demand is said to be
relatively elastic.
relatively inelastic.
income proof.
horizontal.
In which statement(s) is "demand" used correctly?
(I) "An increase in the price of hamburgers will reduce the demand for hamburgers."
(II) "An increase in the price of hamburgers will reduce the demand for hamburger buns."
in neither statements I nor II
in both statements I and II
in statement I only
in statement II only
According to the law of supply, as the price of a good increases,
sellers will produce less of the good.
buyers will buy less of the good.
buyers will buy more of the good.
sellers will produce more of the good.
In which statement(s) are "supply" and "quantity supplied" used correctly?
(I) "An increase in the price of toasters will increase the quantity supplied of toasters."
(II) "A technological advance that lowers the cost of producing toasters will increase the supply of toasters."
in statement II only
in neither statements I nor II
in statement I only
in both statements I and II
Use the table below to choose the correct answer. The table is a schedule of the supply and demand for ground hamburger meat (both given in thousands of pounds per month).
The equilibrium market price of ground hamburger meat would be
$2.50 per pound.
$2 per pound.
$3 per pound.
$1 per pound.
The price of a good will tend to rise when
there is excess demand for the good.
there is excess supply of the good.
the supply of the good increases.
demand for the good decreases.
Economic choice and competitive behavior are the result of
private ownership of resources.
public ownership of resources.
poverty.
scarcity.
Melanie has a choice of driving or flying from Durham, North Carolina to Knoxville, Tennessee for a one-day business trip. If she travels by air, she will be able to work seven hours in Knoxville, while if she drives, she will only have time to work four hours once there. Her expected income from each hour of work in Knoxville is $40. If Melanie a rational decision maker, she will chose to fly if and only if the price differential (air cost minus driving cost) is less than
$280
$40
$120
$160
Production possibilities curve are usually bowed outward. This is because
the more resources a society uses to produce one good, the fewer resources it has available to produce another good.
it reflects the fact that the opportunity cost of producing a good decreases as more and more of that good is produced.
resources are specialized, that is, some are better at producing particular goods rather than other goods.
of the effects of technological change.
Which of the following will most likely cause an outward shift in the production possibilities curve?
a reduction in the man-made productive resources available to the economy as the result of a decline in investment
an increase in government payments to farmers for taking land out of production
an increase from 40 to 50 hours in the average number of hours worked per week
None of the above would cause an outward shift in the production possibilities curve.
Jayden can produce 10 pens or 20 pencils in one hour while Alexander can produce 15 pens or 5 pencils in one hour. Which of the following statements is correct?
Alexander has a comparative advantage over Jayden in the production of pens
Alexander has a comparative advantage over Jayden in the production of pencils
Jayden has a comparative advantage over Alexander in the production of pens
Alexander and Jayden cannot gain from specialization and exchange.
The height of the demand curve for a product indicates the
minimum price consumers are willing to pay for an additional unit of it.
minimum quantity consumers are willing to purchase at the current price.
maximum price consumers are willing to pay for an additional unit of it.
minimum price required to induce suppliers to produce an additional unit of it.
Isabella buys a new camera for $80. She receives consumer surplus of $35 on her purchase if her willingness to pay is
$45.
$115.
$35.
$80.
Which of the following would lead to an increase in the demand for designer blue jeans?
a decrease in the price of designer blue jeans
an increase in the income of youthful Americans
a reduction in the price of the cotton used to produce the jeans
an increase in the price of the cotton used to produce the jeans
Which of the following occurs when a shortage occurs in the market for a good?
Quantity demanded exceeds quantity supplied and the market mechanism pushes the price up, which in turn encourages more production and less consumption.
Quantity supplied exceeds quantity demanded and the price rises, which encourages more production and less consumption.
Quantity demanded exceeds quantity supplied and the market mechanism pushes the price down, which encourages more production and less consumption.
Quantity supplied exceeds quantity demanded and the price falls, which encourages more production and less consumption.
