ECON 10a Lecture Notes - Lecture 2: Opportunity Cost
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21. The English word that comes from the Greek word for "one who manages a household" is
A- market
B- consumer
C- producer
D- economy
B- should be counted only to the extent that they are more expensive at college than elsewhere. C- usually exceed the opportunity cost of going to college. D- plus the cost of tuition, equals the opportunity cost of going to college. |
B- in most economies, wealthy people consume disproportionate quantities of goods and services. C- governments restrict the production of too many goods and services. D- resources are limited. |
B- markets guiding economic activity. Today many countries that did not have this system have implemented it. C- government guiding economic activity. Today many countries that had this system have abandoned it. D- government guiding economic activity. Today many countries that did not have this system have implemented it. |
B- we should agree with Senator Johnson. C- a good decision requires that we recognize both viewpoints. D- there are no tradeoffs between equity and efficiency. |
B- it does not matter if they charge $10 or $15. C- they would do better charging $15 than $10. D- they should raise the price even more. |
B- helps to explain how the economy is organized. C- incorporates all aspects of the real economy. D- Both (a) and (b) are correct. |
B- households provide firms with labor, land, and capital. C- firms provide households with output. D- firms provide households with profit. |
B- grew rapidly, due to several increases in the minimum wage during those decades. C- grew rapidly, due to government policies that discouraged the importation of foreign products during those decades. D- grew slowly, due to the slow growth of the output of goods and services per hour of U.S. workers' time during those decades. |
Question 30. 30. For economists, statements about the world are of two types: |
A- assumptions and theories.
B- true statements and false statements.
C- specific statements and general statements.
D- positive statements and normative statements.
QUESTION 1
Assume there are two basic goods produced in a nation, consumer goods and capital goods. The production possibilities graph for these two goods is bowed out from the origin. This reason for this shape of the graph is because of:
A. | the other-things-equal assumption. | |
B. | the law of increasing opportunity costs. | |
C. | diminishing marginal utility. | |
D. | present choices and future possibilities. |
1 points
QUESTION 2
From an economic perspective, when a student decides to attend another year of college, the student has concluded that the:
A. | marginal costs of attending college are reduced by the availability of grants and subsidies. | |
B. | marginal benefits of attending college have increased because the future is brighter. | |
C. | marginal benefits of attending college are greater than the marginal costs. | |
D. | marginal costs of attending college have decreased to make college affordable. |
1 points
QUESTION 3
A person observes that as consumer prices fall, economic growth increases. The person concludes that fall consumer prices leads to economic growth. This conclusion would be an example of:
A. | confusing correlation with causation. | |
B. | the fallacy of composition. | |
C. | trade-offs among economic goals. | |
D. | the other-things-equal assumption. |
1 points
QUESTION 4
The problem of unlimited wants and limited income is known as
A. | the scientific method. | |
B. | unequal wealth distribution. | |
C. | normative economics. | |
D. | the economizing problem. |
1 points
QUESTION 5
A point outside the production possibilities curve is:
A. | unattainable without economic growth. | |
B. | attainable and the economy is efficient. | |
C. | unattainable without inflation. | |
D. | attainable, but the economy is inefficient. |
1 points
QUESTION 6
Which one of the following would be an example of loaded terminology?
A. | market forces | |
B. | tentative hypothesis | |
C. | entrepreneurial functions | |
D. | creeping socialism |
1 points
QUESTION 7
Suppose there are two economies, Alpha and Beta, both of which have the same production possibilities curves. If Beta devotes more resources to produce investment goods than consumer goods as compared to Alpha, then in the future:
A. | Alpha will not be able to achieve full employment. | |
B. | Beta will not be able to achieve full employment. | |
C. | Alpha will experience greater economic growth than Beta. | |
D. | Beta will experience greater economic growth than Alpha. |
1 points
QUESTION 8
Macroeconomics, as opposed to microeconomics, is concerned with
A. | individual businesses. | |
B. | new computer technology. | |
C. | the stock market. | |
D. | the economy as a whole. |
1 points
QUESTION 9
Which one of the following is an example of a positive economic statement?
A. | The size of the Federal government should be reduced. | |
B. | Midwest states affected by drought should be given more federal disaster aid. | |
C. | Education and income are highly correlated. | |
D. | The minimum wage for workers should be raised to help low-income workers. |
1 points
QUESTION 10
Economics is primarily concerned with
A. | interactions between the government and market participants. | |
B. | how scarce resources are used. | |
C. | the production and distribution of capital goods. | |
D. | how income is divided among individuals. |
1 points
QUESTION 11
The production possibilities table below shows the hypothetical relationship between the production of guns (national defense) and butter (social goods) in an economy.
A B C D E
Guns 0 4 7 9 10
Butter 4 3 2 1 0
If the economy is producing at alternative C, what is the opportunity cost of producing another unit of butter?
A. | 3 units of guns. | |
B. | 1 units of guns. | |
C. | 2 units of guns. | |
D. | 4 units of guns. |
1 points
QUESTION 12
Assume that a consumer can buy only two goods X and Y, and has an income of $120. The price of X is $10 and the price of Y is $20. If the consumer spends all of her money on X and Y, which of the following would be a possible combination:
A. | 4X and 2Y | |
B. | 5X and 3Y | |
C. | 6X and 3Y | |
D. | 8X and 1Y |
1 points
QUESTION 13
In the production possibilities model of an economy, when there is full employment of resources
a nation will be operating at an interior point within its production possibilities curve. | ||
a nation will be operating on the production possibilities curve. | ||
the production possibilities curve will shift outward to the right. | ||
the production possibilies curve will shift inward to the left. |
1 points
QUESTION 14
In economics the concept that there is "no free lunch" means
A. | scarce resources were used to produce these "free" goods so there is an opportunity cost to producing them. | |
B. | consumers are irrational when they ask for a free lunch unless they can make the case that the free lunch benefits business. | |
C. | the marginal cost of the "lunch" is greater than the marginal benefit. | |
D. | businesses could not make a profit if they gave away free goods to consumers. |
1 points
QUESTION 15
Assume that a consumer can only purchase two goods with her income. A straight-line budget constraint indicates that the opportunity cost of obtaining an additional unit of one good is:
A. | negative. | |
B. | constant. | |
C. | increasing. | |
D. | decreasing. |
QUESTION 1
Assume there are two basic goods produced in a nation, consumer goods and capital goods. The production possibilities graph for these two goods is bowed out from the origin. This reason for this shape of the graph is because of:
A. | the other-things-equal assumption. | |
B. | the law of increasing opportunity costs. | |
C. | diminishing marginal utility. | |
D. | present choices and future possibilities. |
1 points
QUESTION 2
From an economic perspective, when a student decides to attend another year of college, the student has concluded that the:
A. | marginal costs of attending college are reduced by the availability of grants and subsidies. | |
B. | marginal benefits of attending college have increased because the future is brighter. | |
C. | marginal benefits of attending college are greater than the marginal costs. | |
D. | marginal costs of attending college have decreased to make college affordable. |
1 points
QUESTION 3
A person observes that as consumer prices fall, economic growth increases. The person concludes that fall consumer prices leads to economic growth. This conclusion would be an example of:
A. | confusing correlation with causation. | |
B. | the fallacy of composition. | |
C. | trade-offs among economic goals. | |
D. | the other-things-equal assumption. |
1 points
QUESTION 4
The problem of unlimited wants and limited income is known as
A. | the scientific method. | |
B. | unequal wealth distribution. | |
C. | normative economics. | |
D. | the economizing problem. |
1 points
QUESTION 5
A point outside the production possibilities curve is:
A. | unattainable without economic growth. | |
B. | attainable and the economy is efficient. | |
C. | unattainable without inflation. | |
D. | attainable, but the economy is inefficient. |
1 points
QUESTION 6
Which one of the following would be an example of loaded terminology?
A. | market forces | |
B. | tentative hypothesis | |
C. | entrepreneurial functions | |
D. | creeping socialism |
1 points
QUESTION 7
Suppose there are two economies, Alpha and Beta, both of which have the same production possibilities curves. If Beta devotes more resources to produce investment goods than consumer goods as compared to Alpha, then in the future:
A. | Alpha will not be able to achieve full employment. | |
B. | Beta will not be able to achieve full employment. | |
C. | Alpha will experience greater economic growth than Beta. | |
D. | Beta will experience greater economic growth than Alpha. |
1 points
QUESTION 8
Macroeconomics, as opposed to microeconomics, is concerned with
A. | individual businesses. | |
B. | new computer technology. | |
C. | the stock market. | |
D. | the economy as a whole. |
1 points
QUESTION 9
Which one of the following is an example of a positive economic statement?
A. | The size of the Federal government should be reduced. | |
B. | Midwest states affected by drought should be given more federal disaster aid. | |
C. | Education and income are highly correlated. | |
D. | The minimum wage for workers should be raised to help low-income workers. |
1 points
QUESTION 10
Economics is primarily concerned with
A. | interactions between the government and market participants. | |
B. | how scarce resources are used. | |
C. | the production and distribution of capital goods. | |
D. | how income is divided among individuals. |
1 points
QUESTION 11
The production possibilities table below shows the hypothetical relationship between the production of guns (national defense) and butter (social goods) in an economy.
A B C D E
Guns 0 4 7 9 10
Butter 4 3 2 1 0
If the economy is producing at alternative C, what is the opportunity cost of producing another unit of butter?
A. | 3 units of guns. | |
B. | 1 units of guns. | |
C. | 2 units of guns. | |
D. | 4 units of guns. |
1 points
QUESTION 12
Assume that a consumer can buy only two goods X and Y, and has an income of $120. The price of X is $10 and the price of Y is $20. If the consumer spends all of her money on X and Y, which of the following would be a possible combination:
A. | 4X and 2Y | |
B. | 5X and 3Y | |
C. | 6X and 3Y | |
D. | 8X and 1Y |
1 points
QUESTION 13
In the production possibilities model of an economy, when there is full employment of resources
a nation will be operating at an interior point within its production possibilities curve. | ||
a nation will be operating on the production possibilities curve. | ||
the production possibilities curve will shift outward to the right. | ||
the production possibilies curve will shift inward to the left. |
1 points
QUESTION 14
In economics the concept that there is "no free lunch" means
A. | scarce resources were used to produce these "free" goods so there is an opportunity cost to producing them. | |
B. | consumers are irrational when they ask for a free lunch unless they can make the case that the free lunch benefits business. | |
C. | the marginal cost of the "lunch" is greater than the marginal benefit. | |
D. | businesses could not make a profit if they gave away free goods to consumers. |
1 points
QUESTION 15
Assume that a consumer can only purchase two goods with her income. A straight-line budget constraint indicates that the opportunity cost of obtaining an additional unit of one good is:
A. | negative. | |
B. | constant. | |
C. | increasing. | |
D. | decreasing. |
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