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economics is the study of how society allocates its unlimited resources
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most economists believe that an increase in the quantity of money results in
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Econ 1
| Question | Answer |
|---|---|
| economics is the study of how society allocates its unlimited resources | FALSE |
| most economists believe that an increase in the quantity of money results in | increase in demand for goods/services, lower unemployment in the short run, higher inflation in the long run |
| if charge product $10 and 7 people buy, if charge product $15 and 5 people buy, which price should do even if doesn't affect their revenue | charge $15 not $10 |
| when calculate true costs of going to college what portion of your room and board expenses should be included | only the amount by which your room and board expenses exceed the expenses for rent and food if you were not in college |
| economists use the word equality to describe a situation in which | each member of society has the same income |
| the fact that different countries experience different standards of living is largely explained by different ___ | productivity levels |
| trade allows people to buy a greater variety of goods and services at lower cost, bulgaria can potentially benefit from trade with any other country, trade increases competition | true |
| a rational decision maker | takes an action only if the marginal benefit of that action exceeds the marginal cost of the action |
| when the productivity level of a country decreases what happens | the standard of living decreases as well |
| when calculating cost of college which should you NOT include: income would have earned had you not gone to college, cost of rent for off campus apartment, cost of books required for college classes, cost of tuition | cost of rent for your off campus apartment |
| John is an athlete and debating whether to buy running shoes or a heart rate monitor and both cost 120$, what principle does this illustrate | people face trade offs |
| trade can make every nation better off | true |
| the opportunity cost of an item is | what you give up to get tht item |
| if gov were to set price of dozen eggs above market price then what would happen | decrease in quantity demanded and increase in quantity supplied |
| markets are usually a good way to organize economic activity | true |
| for markets to work there must be | property rights |
| air pollution from burning fossil fuels causes damage to crops and public health, this is an example of | a market failure caused by externality |
| one advantage market economies have over centrally planned economies is that market economies | are more efficient |
| worker in India can produce 32 units in 8 hour day, and worker in Bangladesh can produce 30 units in 10 hour day, we can conclude that | the standard of living will likely be higher in India than in Bangladesh |
| a market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interests | false |
| economics is the study of how evenly goods and services are distributed within society | false |
| Barb has 100 bucks to spend on self and has 4 choices that all cost 100 bucks, she chooses option B- what is her opportunity cost? | the value of the option she would have chosen had option B not been available |
| in considering how to allocate its scarce resources among various members, a household considers | each member's desires/abilities/efforts |
| D spent $600 purchasing/repairing old fishing boat that he wants to sell for 900$, needs to repair more 400$ to make it worth 900$ but can sell boat now for $400 what should he do | he should complete the repairs and sell boat for $900 |
| in the 1990s inflation in US was | about 3 percent per year |
| something that induces a person to act | incentive |
| trade can make everyone better off except in case where one person better at everything | false |
| when single person (or small group) has ability to influence market prices there is | market power |
| cost of flying a 100 seat plan for airline is $50,000 and there are 10 empty seats on flight. marginal cost of flying a passenger is | cannot be determined from info given |
| example of activity that will most likely impose an external cost | secretary smokes cigarette in crowded break room |
| if average cost of transporting passenger on train $75, it would be irrational for allowing anyone to ride less than $75 | false |
| causes of market failure include | externalities and market power |
| broken window fallacy states that when a window breaks and someones spends money to repair it- create new economic activity that would have not taken place otherwise | true |
| if frank goes to college he will spend 21,000 tuition, 11,000 room and board, 1800 books and if he doesnt will earn 16,000 and spend 7,200 on room and board, what is his cost of going to college | 42,600 |
| market failure means | the failure of a market to produce an efficient allocation of resources |
| an individual deciding how to allocate her limited time is dealing with both scarcity and trade offs | true |
| college athletes who drop out of college to play professional sports | are well aware that their opportunity cost of attending college is very high |
| according to adam smith, the success of decentralized market economies is primarily due to | individuals pursuit of self interest |
| what do equality and efficiency mean | equality refers to the uniform distribution of those benefits and efficiecy refers to maximizing benefits from scarce resources |
| the failure of communism in a large number of countries is at least partly explained by | the lack of information, on the part of the central planners about tastes and preferences in their economies |
| in the US, incomes historically have grown about 2 percent per year, at this rate average income doubles every | 35 years |
| incomes of US households in 1970s and 1980s | grew slowly due to slow growth of output of goods.services per hour of US workers time during those decades |
| when government implements programs such as progressive income tax rates what is likely to occur | equality is increased and effiiciency is decreased |
| when a production possibilities frontier is bowed outward, the opportunity cost of first good in terms of the second good increases as more of the second good is produced | false |
| normative statements are not | descriptive |
| in circular flow diagram, outer loop represents flow of dollars and inner loop represents | flows of inputs from ouseholds to firms |
| John Maynard Keynes referred to economics as an easy subject | at which very few excel |
| president of US receives tax policy advice from economists in | department of treasury |
| in a circular flow diagram, what flows from households to firms through the markets for goods and services | dollars spent on goods and services |
| what does bowing outward on production possibilities indicate | increasing opportunity costs |
| if an economy can produce more of one good without giving up any of another good, then the economy's current production point is inefficient | true |
| positive statements are descriptive, while normative statements are prescriptive | true |
| who said "the whole of science is nothing more than the refinement of everyday thinking" | adam smith |
| in a circular flow diagram, what flows from households to firms through markets for the factors of production | land, labor, and capital |
| economists who are primarily responsible for advising congress on economic matters work in what agency | congressional budget office |
| in a PPF bowed outward, opportunity cost of producing an additional unit of a good | increases as more of the good is produced |
Created by:
sngibbons