question
Identify the cause and effect in the following examples:
-Lower infant mortality is __________ and an improvement in nutrition is ________.
-A surge in cocoa prices is __________ and a pest attack on the cocoa crop is _______.
-Lower infant mortality is __________ and an improvement in nutrition is ________.
-A surge in cocoa prices is __________ and a pest attack on the cocoa crop is _______.
answer
An effect... The cause.
An effect... The cause.
An effect... The cause.
question
A budget constraint represents __________.
answer
The bundles of goods or activities that a consumer can choose given her limited budget.
question
Suppose you have a part-time job and earn $400 a month. Suppose you decide to spend your income buying new shoes and jeans. The chart below shows the possible combinations that could be purchased in a month. Assume jeans cost $50 each and shoes cost $100 each.
Budget Pairs of shoes Pairs of jeans
$400 4 0
400 3 2
400 2 4
400 1 6
400 0 8
The table above shows that for a given budget if you increase the amount of one type of good that you buy, you must __________ the amount of the other good that you buy. Therefore, a budget constraint implies that the consumer faces __________.
Budget Pairs of shoes Pairs of jeans
$400 4 0
400 3 2
400 2 4
400 1 6
400 0 8
The table above shows that for a given budget if you increase the amount of one type of good that you buy, you must __________ the amount of the other good that you buy. Therefore, a budget constraint implies that the consumer faces __________.
answer
Decrease..... Trade-Offs
question
In which of the following areas will taking an economics course help benefit you throughout your life?
answer
It will help you analyze and predict human behavior in a variety of situations.
It will instill the concept that what activity is given up by a decision plays an important role when making choices.
It will give you the logic behind using cost-benefit analysis when evaluating decisions.
It will instill the concept that what activity is given up by a decision plays an important role when making choices.
It will give you the logic behind using cost-benefit analysis when evaluating decisions.
question
The three principles of economics include optimization, equilibrium, and empiricism.
Empiricism describes a situation where ______________.
Optimization describes a situation where _____________.
Equilibrium describes a situation where _____________.
Empiricism describes a situation where ______________.
Optimization describes a situation where _____________.
Equilibrium describes a situation where _____________.
answer
-Economists use data to analyze what is happening in the world.
-People weigh costs and benefits when making a decision.
-No one would benefit from changing his or her behavior.
-People weigh costs and benefits when making a decision.
-No one would benefit from changing his or her behavior.
question
Which of the following would be considered a scarce resource for producers?
answer
-Natural resources for production.
-Low-skill labor.
-Equipment and tools.
-Low-skill labor.
-Equipment and tools.
question
Since the inputs used to produce goods are scarce, the total amount produced of most goods is _________ the amount that consumers would like to buy. To allocate the goods produced to the people who value them the most, we use _________.
answer
Below... The price mechanism.
question
Free riding occurs when ___________
are out of sync with __________.
are out of sync with __________.
answer
People's private benefits... The public interest.
question
Which of the following is subject to the free-rider problem?
answer
-Public libraries
-A neighborhood watch.
-National security.
-A neighborhood watch.
-National security.
question
Which of the following is more susceptible to the free-rider problem:
state parks or street lights?
state parks or street lights?
answer
Use of street lights is more susceptible since even those who don't pay taxes still benefit, while state parks can charge for admission, so that everyone who goes pays their share.
question
Which of the following is true regarding the concept of causation?
answer
It describes how one event can bring about change in another.
question
Which of the following is not an example of causation?
answer
Washing your car will lead to raining that day.
question
The concept of opportunity cost is a measure of _________.
answer
The value of the best alternative use of a resource.
question
Suppose there are three activities in which you could participate:
1. The opportunity cost of the first activity is missing 3 hours of work.
2. The opportunity cost of the second activity is missing a concert that you have tickets to.
3. The opportunity cost of the third activity is missing the afternoon nap that you take every day.
Given this information, for which of these activities would you be able to compare opportunity costs?
1. The opportunity cost of the first activity is missing 3 hours of work.
2. The opportunity cost of the second activity is missing a concert that you have tickets to.
3. The opportunity cost of the third activity is missing the afternoon nap that you take every day.
Given this information, for which of these activities would you be able to compare opportunity costs?
answer
You can compare all the activities after you translate all the missed activities into dollar amounts.
question
Which of the following would not be considered one of the possible opportunity costs of a recent high school graduate backpacking across Europe for a year?
answer
-Getting a full-time job
-Joining the Peace Corps.
-Starting college right away.
-Joining the Peace Corps.
-Starting college right away.
question
How does microeconomics differ from macroeconomics?
answer
Microeconomics is the study of how individuals, households, firms, and governments make choices, while macroeconomics is the study of the economy as a whole.
question
Which of the following is not an item studied under macroeconomics?
answer
Firm profits.
question
Free riding occurs because _________.
answer
People sometimes pursue their own private interests and don't contribute voluntarily to the public interest.
question
Consider the following three statements:
Statement 1: You can either stand during a college football game or you can sit. You believe that you will see the game very well if you stand and others sit but that you will not be able to see at all if you sit and others stand. You therefore decide to stand.
Statement 2:
Your friend tells you that he expects many people to stand at football games.
Statement 3: An economist studies photos of many college football games and estimates that 75 percent of all fans stand and 25 percent sit.
Which of these statements deals with optimization, which deals with equilibrium, and which deals with empiricism? Explain.
Statement 1 deals with ____________.
Statement 2 deals with ____________.
Statement 3 deals with ____________.
Statement 1: You can either stand during a college football game or you can sit. You believe that you will see the game very well if you stand and others sit but that you will not be able to see at all if you sit and others stand. You therefore decide to stand.
Statement 2:
Your friend tells you that he expects many people to stand at football games.
Statement 3: An economist studies photos of many college football games and estimates that 75 percent of all fans stand and 25 percent sit.
Which of these statements deals with optimization, which deals with equilibrium, and which deals with empiricism? Explain.
Statement 1 deals with ____________.
Statement 2 deals with ____________.
Statement 3 deals with ____________.
answer
-Optimization, because you are choosing your best feasible option.
-Equilibrium, because your friend presumes everyone is behaving optimally.
-Empiricism, because it describes behavior using real-world data.
-Equilibrium, because your friend presumes everyone is behaving optimally.
-Empiricism, because it describes behavior using real-world data.
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