quiz 1 review

Question 1

An investment project for sure requires:

Answer 1

two of the above (A - time to develop it & B- a monetary cost)

Question 2

Both sides in exchange are made better off, because:

Answer 2

marginalism

Question 2

Both sides in exchange are made better off, because:

Answer 2

economic value is subjective.

Question 3

Economics deals primarily with the concept of

Answer 3

scarcity

Question 4

Economics is the study of

Answer 4

how society manages its scarce resources.

Question 5

Efficiency means that

Answer 5

society is getting the maximum benefits from its scarce resources

Question 6

High-school athletes who skip college to become professional athletes

Answer 6

understand that the opportunity cost of attending college is very high.

Question 7

If labor in Mexico is less productive than labor in the United States in all areas of production,

Answer 7

then both Mexico and the United States still can benefit from trade because of comparative advantages

Example:
Imagine Mexico is relatively better at producing a particular type of agricultural product, while the United States is relatively better at producing a specific type of technology. Even if the US is more productive overall, specializing in technology and trading with Mexico for the agricultural product could benefit both countries

Question 8

In Economics value is subjective. As a consequence:

Answer 8

both sides in exchange are made better off than otherwise

Question 9

In economics, the cost of something is

Answer 9

what you give up to get it.

Question 10

It once took 90 percent of our population to grow our food. It now takes only 3 percent of the population to grow our food. Which of the following statements is true?

Answer 10

Economists understand this is progress because the proportion of the population that used to be farmers is now employed in other professions.

Question 11

Marginalism, the view that we value things at the margin or unit by unit instead by categories, was developed by:

Answer 11

Carl Menger, in the 1870s

Question 12

Mitch has $500 to spend and wants to buy either a new amplifier for his guitar or a new smartphone. Both the amplifier and the smartphone player cost $500, so he can only buy one. This illustrates the basic concept that

Answer 12

people face trade-offs

Question 13

Moira decides to spend two hours taking a nap rather than attending her classes. Her opportunity cost of napping is

Answer 13

the value of the knowledge she would have received had she attended class.

Question 14

Money is an economic good that:

Answer 14

we might not like, but value it because others value it.

Question 15

Sophia is planning her activities for a hot summer day. She would like to go to the local swimming pool and see the latest blockbuster movie, but because she can only get tickets to the movie for the same time that the pool is open she can only choose one activity. This illustrates the basic principle that

Answer 15

people face tradeoffs

Question 16

Suppose the state of Iowa passes a law that increases the price of cigarettes by $1 per pack. As a result, residents in Iowa start purchasing their cigarettes in surrounding states. Which of the following principles does this best illustrate?

Answer 16

people respond to incentives

Question 17

Suppose the state of Massachusetts passes a law that bans smoking in restaurants. As a result, residents of Rhode Island who do not like breathing second-hand smoke begin driving across the border to Massachusetts to eat at restaurants there. Which of the following principles does this best illustrate?

Answer 17

people respond to incentives

Question 18

The adage, “There is no such thing as a free lunch,” is used to illustrate the principle that

Answer 18

people face tradeoffs

Question 19

The adage, “There is no such thing as a free lunch,” means

Answer 19

people face tradeoffs

Question 20

The adage “savings equals investment” is based on the:

Answer 20

all of the above

(A- monetary cost of the investment.

B- time used to develop the investment project.

& C- physical effort employed in the investment project.)

Question 21

The income of a typical worker in a country is most closely linked to which of the following?

Answer 21

productivity

Question 22

The main reason why we value money is because:

Answer 22

others value it

Question 23

The principle that “trade can make everyone better off” applies to interactions and trade between

Answer 23

all of the above are correct (families, states within the US, and nations)

Question 24

The principle that trade can make everyone better off applies to

Answer 24

all of the above (individuals families and countries)

Question 25

The term "productivity"

Answer 25

refers to the quantity of goods and services produced from each unit of labor input.

Question 26

Trade between countries tends to

Answer 26

increase both competition and specialization.

Question 27

What you give up to obtain an item is called your

Answer 27

opportunity cost

Question 28

Why is money an economic good to manage time?

Answer 28

Because it is a good that can be used for our current and later goals.

Question 29

Why is money an economic good to manage time?

Answer 29

Because it does not quickly rotten away.

Question 30

Resources are

Answer 30

scarce for households and scarce for economies

Question 31

in considering how to allocate its scarce resources among various members, a household considers

Answer 31

all of the above, (each member's abilities, efforts, and desires)

Question 32

economics deals primarily with the concept of

Answer 32

scarcity

Question 33

in most societies, resources are allocated by

Answer 33

the combined actions of millions of households and firms

Question 33

positive statements are

Answer 33

claims about how the world is

Question 34

normative statements are

Answer 34

claims about how the world should be

Question 35

one way to characterize the difference between positive statements and normative statements is as follows:

Answer 35

Positive statements offer descriptions of the way things are, whereas normative statements offer opinions on how things ought to be.

Question 36

Normative statements describe how the world is, while positive statements prescribe how the world should be.

Answer 36

false

Question 37

"Society would be better off if the welfare system were abolished" is a normative statement, not a positive statement.

Answer 37

true

Question 38

"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement.

Answer 38

false