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ECON312 Week 1 Homework (September 2018)

ECON 312 Principles of Economics

Week 1 homework

Question 1

John has two hours of free time this evening. He ranked his alternatives, first go to a concert, second go to a movie, third study for an economics exam, and fourth answer his e-mail. What is the opportunity cost of attending the concert for John?

attending a movie, studying for an economics exam, and answering his e-mail

going to the concert because that is what John choose to do

answering his e-mail

attending a movie

studying for an economics exam

Question 2

Hank requires 1 hour to cut the grass and 3 hours to clean the house. His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house. Which of the following statements is true?

Hank and Holly both have a comparative advantage in cutting the grass.

Hank has an absolute advantage in both cutting the grass and cleaning the house.

Hank has a comparative advantage in both cutting the grass and cleaning the house.

Hank has a lower opportunity cost of cutting the grass.

Holly has a comparative advantage in cutting the grass.

Question 3

The vertical axis in a graph

is named the y-axis.

measures time in a cross-section and time series graph.

has no origin.

measures time only in a time series graph.

is named the x-axis.

Question 4

Suppose that Germany, France, Estonia, and India all have the same production possibilities, illustrated in the figure above. Based on the production points in the figure, which country is most likely to expand its PPF to PPF3?

India

Germany

France

France and Germany equally

Estonia

Question 5

Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of

scarcity.

why to produce.

social interest versus self-interest.

macroeconomics.

microeconomics.

Question 6

Which of the following is the best definition of economic growth?

The investment in capital and consumption goods by an economy

Increased development of land and entrepreneurship

The sustained expansion of production possibilities

The opportunity cost of capital

The opportunity cost of consumption

Question 7

When Ford decides to increase production of hybrid cars, it directly answers the ________ question.

why

what

where

for whom

how

Question 8

The decision to go to graduate school is a rational one for a college student if the

opportunity cost of graduate school equals zero.

marginal benefit of graduate school exceeds the marginal cost.

cost is not too great.

marginal cost exceeds the marginal benefit of graduate school.

student carefully compared the social benefits of this decision.

Question 9

Canada has nationalized health care, so that everyone, regardless of their ability to pay, has some access to health care. Based on this observation, Canada has decided that “everyone, regardless of their ability to pay” is the answer to what microeconomic question?

What type of health care will be produced and in what quantity?

Why will we offer health care?

Must we offer health care?

How will health care be produced?

For whom will health care be produced?

Question 10

A graph shows the average SAT scores for males and females in 2012. The kind of graph used to show these data would be a

trend figure.

time-series graph.

time-stationary graph.

scatter diagram.

cross-section graph.

Question 11

When Fresh Express Salads decides to mechanically pick all of its lettuce, it directly answers the ________ question.

how

when

where

what

for whom

Question 12

“As the price of gasoline increases, fewer people buy cars that are gas guzzlers.” A graph showing this relationship would

have a negative slope.

be a horizontal line.

be a vertical line.

have a positive relationship.

have a direct relationship.

Question 13

If a nation devotes a larger share of its current production to consumption goods, then

its economic growth will slow down.

some productive factors will become unemployed.

its PPF will shift inward.

it must produce at a point within its PPF.

its PPF will shift outward.

Question 14

Which of the following would most likely cause a country’s production possibilities set to shift outward at every point along the frontier?

a decrease in idle capital

none of the above

a decrease in unemployment

a technological advance in only one sector of the economy

a general technological advance that affects all sectors of the economy

Question 15

A graph shows the wage rate of factory workers. The slope of the line is positive for periods when the wage rate is

low and falling.

rising.

high and not changing.

high and falling.

falling.

Question 16

For country Gamma, the opportunity cost for producing 1 computer is 10 tons of steel. For country Beta, the opportunity cost for producing 1 computer is 6 tons of steel. Which country has the comparative advantage in the production of steel?

Gamma

More information is needed to determine which of the two nations has the comparative advantage.

Both have the comparative advantage in the production of steel.

Neither country has the comparative advantage in the production of steel.

Beta

Question 17

To increase its economic growth, a nation should

limit the number of people in college because they produce nothing.

eliminate expenditure on capital goods.

increase current consumption.

encourage spending on goods and services.

encourage education because that increases the quality of labor.

Question 18

In a production possibilities frontier graph, the cost of producing more units of a good is measured by the

area in the arc between the PPF and a straight line drawn between the starting point and the ending point.

dollar value of the additional output.

None of the above answers is correct.

dollar value of the resources used to produce the good.

amount of the other good or service that must be forgone.

PartialQuestion 19

0.8 / 1 pts

Label each entry in the list as dealing with a microeconomic topic or a macroeconomic topic.

Motor vehicle production in China is growing by 10 percent a year.

Coffee prices rocket.

Globalization has reduced African poverty.

The government must cut its budget deficit.

Apple sells 20 million iPhone 6 a month.

Question 20

In the above figure, a negative relationship between x and y is shown in Figure

C.

B and C.

B.

D.

A.

Question 21

The figure above shows the relationship between the price of a dozen roses and the quantity of roses a florist can sell. The slope between points A and B is

20.

2.

4

nonexistent because at point A, no roses are sold.

16.

Question 22

The above figure shows the production possibility frontier for an economy. The point or points that are attainable and production efficient are

points B and C.

points A, B, and C.

point E.

points A and D.

points A, B, C, and D.

Question 23

Economics is the social science that studies

the real reasons people buy goods and services.

whether a nation has enough natural resources.

how people make choices to cope with scarcity.

the psychology of individuals and businesses.

how choices made in the social interest could eliminate scarcity.

Question 24

A major earthquake occurs in the central part of the United States. What impact would this have on the nation’s production possibilities frontier and why?

A tradeoff would occur to replace the resources and goods destroyed.

It would shift outward because unemployment would be reduced.

Nothing would happen because the nation would still have the same capabilities.

It would not shift because people would get to work to replace any capital that was destroyed.

It would shift inward because some of the nation’s resources, such as capital and labor, would be destroyed.

Question 25

If Jessie studies economics for two hours instead of going to the movies with her friends, then

Jesse definitely is making a rational choice.

the opportunity cost of studying is the missed movie.

Jessie is ignoring a sunk cost.

Jessie is not responding to any incentives.

the benefit of studying is the missed movie.

Question 26

If workers in Mexico produce fewer goods and services per hour than workers in the United States in all areas of production, then

it is unknown whether either country can benefit from trade with the other.

neither Mexico nor the United States will benefit from trade with the other.

both the United States and Mexico will benefit from trade with the other.

Mexico will benefit from trade with the United States but the United States will not.

the United States will benefit from trade with Mexico but Mexico will not.

Question 27

A professor changes the penalty for cheating on exams from getting a 0 on the exam to getting an F in the course. The professor has

decreased the marginal benefit of cheating.

made all the students act in the social interest.

recognized that students don’t respond to incentives.

increased the marginal cost of cheating.

recognized that students don’t make rational choices.

IncorrectQuestion 28

0 / 1 pts

If John can produce 10 chairs or 20 lamps during a week while Mary can produce 12 chairs or 22 lamps in the same time, who has the absolute advantage in producing each good?

John in producing chairs, Mary in producing lamps

Both Mary and John in both goods

Mary in producing chairs, John in producing lamps

John in producing both goods

Mary in producing both goods

Question 29

As a shoe factory adds more workers, shoe production grows, reaches a maximum, and then shrinks. In a diagram that has the number of workers on the horizontal axis and the number of shoes on the vertical axis, the relationship between the number of workers and the number of shoes starts as ________ and then, after the maximum point, is ________.

negative; positive

positive; nonexistent

linear; negative

positive; negative

positive; linear

Question 30

A country has a comparative advantage in the production of a good if it can

produce the good on and remain on its production possibilities frontier.

produce more of the good than another country.

produce more of the good most efficiently.

produce the good at the lowest opportunity cost.

tradeoff producing the good for another good.

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