question
Which of the following phrases best captures the notion of efficiency?
answer
Minimum Waste
question
Which of the following is correct concerning opportunity cost?
answer
Except to the extent that you pay more for them, opportunity costs should not include the cost of things you would have purchased anyway
question
When calculating the cost of college, which of the following should you probably not include?
answer
The cost of rent for your off-campus apartment
question
Suppose Country A has a high average wage level and a high level of output per person, while Country B has a low average wage level and a low level of output per person. Which country can benefit from trade?
answer
Both Country A and Country B can benefit
question
If a electric power plant does not bear the entire cost of the pollution it emits, it will
answer
emit too much pollution
question
Which of the following is an example of an externality?
answer
(All of these are correct) A paper mill dumps waste into the river; A neighbor's loud music disrupts sleep; A drunk driver causes an accident that injures another person
question
Suppose a gardener produces both tomatoes and squash in his garden. I he must give up 8 bushels of squash to get 5 bushels of tomatoes, then his opportunity cost of 1 bushel of tomatoes is
answer
1.6 bushels of squash
question
The producer that requires a smaller quantity of inputs to produce a certain amount of a good, relative to the quantities of inputs required by other producers to produce the same amount of that good,
answer
has an absolute advantage in the production of that good.
question
Suppose the U.S. and Japan both produce airplanes and televisions and the U.S. has a comparative advantage in the production of airplanes while Japan has a comparative advantage in the production of televisions. If the U.S. exports airlines to Japan and imports televisions from Japan,
answer
both countries, as a whole, will be better off
question
Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates
answer
the ticket price was below the equilibrium price.
question
Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause a(n)
answer
decrease in the demand for printers and a decrease in the quantity supplied of printers.
question
Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in this market?
answer
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
question
Suppose the number of buyers in a market decreases and a technological advancement occurs also. What would we expect to happen in this market?
answer
Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
question
Which of the following events would cause the price of oranges to fall?
answer
The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges.
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