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Econ Final

Terms in this set (122)

Economics is
a. a discipline in the physical sciences
b. a field that deals exclusively with normative issues
c. a field that deals exclusively with positive issues
d. only useful for examining behavior in capitalist economies
e. a discipline that focuses on how choices are made in society
e. a discipline that focuses on how choices are made in society
The study of how consumers and producers interact in individual markets is
a. macroeconomics
b. labor economics
c. microeconomics
d. econometrics
e. development economics
c. microeconomics
The statement that "IBM's stock closed at $85" is
a. a normative statement
b. a positive statement
c. a macroeconomic observation
d. financial manipulation
e. a sign that the market may be undervalued
b. a positive statement
Suppose that the Council of Economic Advisers tells the President that "the unemployment rate is 4 percent." The President responds, "That rate is still too high." The President statement is
a. a normative statement
b. a positive statement
c. empirically verifiable by checking economic data
d. an indisputable statistical fact
e. an incorrect positive statement
a. a normative statement
The ultimate purpose of building an economic model is to
a. challenge college students
b. constrain economic agents
c. predict behavior
d. change behavior
e. prevent behavior
c. predict behavior
Carl is considering attending a concert with a ticket price of $35. He estimates that the cost of driving to the concert and parking there will total an additional $20. In order to attend the concert, Carl will have to take time off from his part-time job or forgo studying for an extra scheduled for the next morning. He estimates that he will lose 5 hours at work, at a wage of $6 per hour, or 5 hours of study time. If Carl considers studying the best alternative use of his time, his opportunity cost of attending the concert equals
a. $55
b. $55 plus the value of the higher exam grade he could earn by studying for 5 hours
c. $85 plus the value of the higher exam grade he could earn by studying for 5 hours
d. $85 minus the value of the higher exam grade he could earn by studying for 5 hours
e. $55 minus the value of the higher exam grade he could earn by studying for 5 hours
b. $55 plus the value of the higher exam grade he could earn by studying for 5 hours
Scarcity means that society must make
a. goods
b. services
c. natural resources
d. output
e. choices
e. choices
When opportunity costs rise as more of a good is consumed, the production possibilities frontier will be concave (bowed out) with respect to the origin
a. true
b. false
a. true
If an economy's production possibilities frontier shifted to the right, this would illustrate
a. increasing opportunity cost
b. decreasing opportunity cost
c. a fall in resource utilization
d. economic growth
e. a rise in resource utilization
d. economic growth
A country currently is using all its land to produce wheat and grapes. However, the land most suited to growing grapes is being used to produce wheat, and the land most suited to growing wheat is being used to produce grapes. Which of the following statements is true?
a. the country is operating outside of its production possibilities frontier
b. the country is operating along its production possibilities frontier
c. wheat production must be sacrificed if the country increases grape production
d. grape production must be sacrificed if the country increases wheat production
e. the country is operating inside its production possibilities frontier
e. the country is operating inside its production possibilities frontier
Jenni can change a car's oil in 10 minutes and clean a bathroom in 20 minutes. Rob can change a car's oil in 20 minutes and clean a bathroom in 10 minutes. Therefore,
a. Jenni should clean the bathroom and Rob should change the car's oil
b. Rob should clean the bathroom and Jenni should change the car's oil
c. there are no gains from specialization
d. Rob has an absolute advantage in both activities
e. Jenni has an absolute advantage in both activities
b. Rob should clean the bathroom and Jenni should change the car's oil
A person has a comparative advantage if
a. she can produce everything more cheaply than her co-worker can
b. she can produce everything at a faster rate than her co-worker can
c. she can produce a good with a smaller opportunity cost than her co-worker can
d. she sees through corporate and government manipulation
e. she gets rich through inheritance
c. she can produce a good with a smaller opportunity cost than her co-worker can
A method of allocating scarce resources is a necessary component of
a. all economics systems
b. all economic systems except market capitalism
c. centrally-planned socialism and market socialism only
d. centrally-planned capitalism and market capitalism only
e. all economic systems except centrally planned socialism
a. all economic systems
In a market system, resources are allocated by
a. the order of authority
b. traditional practices
c. prices
d. absolute advantage
e. production possibilities frontiers
c. prices
In a command system, the decision about what should be produced is made by
a. a central authority
b. the market
c. repeating what was done in the past
d. business firms
e. consumers
a. a central authority
b. the market
c. repeating what was done in the past
d. business firms
e. consumers
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