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75 Cards in this Set

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  • Back
Text defines economics as a theory of ______ and its ________
choice;unintended consequences
The theory of economics, with surprinsingly few exceptions, are simply extensions of the assumption taht people take those actions they think will
yield them the largest net advantage
To economize means to
allocate available resources in a way that yields the most value to the economizer
The central problem for economizers is always
scarcity of resources
scarcity can be eliminated by
none/neither of these - abolishing money, abolishing competition, abolishing capitalism
In 1998 Chicago Cubs' slugger Sammy Sosa donated tens if not hundreds of thousands of dollars toward hurricane relief in his native Dominican republic. From the economic point of view, Sosa's charitable project suggest that
it was chosen over other uses of his money, and therefore even Sosa had to economize
Barry Bonds and Jennifer Lopez have wich of the following in common?
each of them chooses to advance some projects over others
Adam Smith used the term commercial society to refer to a society in which
everyone lives by exchanging
Which of the following is most important for the succesful functioning of any economy?
clearly understood and generally accepted rules!
In a typical college classroom without a seating chart, dozens of students nevertheless occupy classroom seats with a minimum of confusion and disorder. Economics explains this orderly process by suggesting that students
follow a simple, perhaps even unwritten, rule, such as "seats belong for this hour to those who first occupy them."
Suppose the data shows that most pot-smokers drank milk as young children. If we conclude that, because most pot smokers "started" on milk, milk drinking "leads" to pot-smoking (at least among certain susceptible groups of milk users), we most are most likely
confusing statistical correlation with causation among these data
Wealth consists ultimately of
whaterver the heck people value
Individuals tend to trade because
All of these - they expect to increase their own wealth as a result of the trade, expect to gain more than they give up, place different values on their property
A truly voluntary exchange
is hardly ever an exchange of equal values
A mugger steals $25 from John Doe. what can an economist conclude?
only the muggler's wealth has increased
Chelsea buys a can of soda from the vending machine for 75 cents. As long as this was a voluntary exchange, what can an economist conclude?
All of these - She values the soda more than the money, her wealth has increased, the vendor values the soda less than the money, the vendor's wealth has increased
Making bread at home would be more efficient than making it in commercial bakeries
for people who place a sufficiently high value on home-baked bread
Land can be used to grow commercial Christmas trees or pulpwood. what is the more efficient use of that land
it depends in part on the relative prices of Christmas trees and pulpwood
Suppose shoppers typically pay twice as much for frozen "convenience" foods compared to similar dinners they could prepare themselves. An economist would say
This is efficient if the consumer feels the savings in preparation time justifies the higher price
Bobby drives her car to work; Bill take the bus. An economist claims both are behaving efficientlyas long as we assume that
both Bobby and Bill voluntarily selected the forms of transportation they take to work
What is the more efficient use of one's tight budget: going to a first-run movie at $7.50 or waiting to rent the video at $3.50
it depends on the choosers own evaluations of the costs and benefits
A large and diverse communityhas suffered a two-month drought. In attempting to deal with the crisis, fouf identifiable groups emerge; one decides to pray, a second decides to engage in a rain dance, a third decides to use modern meteorological principles to "seed" the clouds, and a fourth decides to do nothing. From the standpoint of economic theory..
individuals in each group are acting efficiently, given their own values and understanding of ends and means
what is an efficient way to study for an economics exam?
Any method might be efficient depending on one's perceived costs and benefits
New airplanes that consumes less fuel per passenger-mile become less efficient for commercial airlines to purchase and use as
fulel prices fall because the aiplane is costlier so there's no gain if everything else stays the same
When an airline that has overbooked a flight offers to pay any passenger who will consent to take a later flight, which category of passenger is most likely to give up their reservation?
passengers not in a hurry
is cutting down a tree in two hours with an ax more efficient than cutting it down in ten minutes with a gasoline-powered saw?
it could be more efficient if the person cutting down the tree places a high enough value on the exercise
"opportunity cost" is
the next best opportunity that one sacrifices when making a choice
Samantha is at a friend's house for dinner. He friend says "I can re-heat either the lasagna or the fried rice" Samantha like them both, but chooses the fried rice. Does Samantha's choice entail a cost?
yes- samantha sacrificed the opportunity to eat lasagna
the production possibilities frontier assumes
a given set of resources
The production possibilities frontier is used by economists to depict
the opportunity cost of production
George Herman (Babe) Ruth was a superb baseball player, both an excellent pitcher and a record-breaking batter. Other members of the NY yankee team who were not as competent pitchers as Ruth nonetheless had a comparative advantage over Ruth in pitching because
Ruth was such a competent batter
Harry and Gus fish the same lake together from the same boat. Each morning Harry typically catches either 20 bluegills or 5 walleyes (depending on how deep he fishes) while Gus typically catches either 20 bluegills or 2 walleyes. If they wish to fill their boat with the largest combination of bluegills and walleyes tomorrow morning ...
harry should catch the walleyes and gus should fish only for bluegills
the skinned knee corporation can produce either 300 skateboards each month, or 500 snowboards each month. What is their opportunity cost of producing 300 skateboards each month?
500 snowboards
George was assigned to read a chapter in economics tonight, bu he has a math exam tomorrow. he chooses to study for the math exam and postpone his economics studies till afte the exam. What is the opp cost of George's decision?
the economics knowledge he sacrificied by not reading the assigned chapter
Look for the following production possibilites table for drill presses and corn. the table shows the max combination of drills and bushels of corn that can be produced when all resources are fully employeed

D 10 20 30 40 50
C 150 140 120 90 500

Based on the above info
the opportunity cost of producing 40 drill instead of 30 drills is 30 bushels of corn. For every unit of of D you sacrifice a until of C. Figure it out!
The production possiblities curve presents
the max combo of goods and services that can be produced with fixed resources and technology, given efficient use of the resources
One of the assumptions undelying the production possibilities curve is that
the quantity of the resources available for the production of the economic goods is fixed over a gien time period
In economics, the term capital
refers to goods used to produce other goods and services
Economists use the term investment to mean
the production of more capital goods
The combo of pc's and tv's show in the ppc figure by point W (below the curve)
is attainable but involves the inefficient use of some of society's resources. Point being that when a point falls below the curve it takes less to do but there is loss of opp cost to produce more. When the points falls on the curve it's break even and when it falls farther outside the curve it's unreachable
In talking about ppc curve If opp costs are constant, then
the pp curve is a straight line
One opp cost assoc with going to college is
givin up employment possibilities while in college
comparative advantage implies choosing the activity which
has the lower opp cost
Opp costs are
subjective cuz each person decides the value of the forgone alternative
Bill graduates from college with a choice of playing professional football at $2 million a year or coaching for $50,000 a year. He decides to play football, but eight years later he quits football to make movies for $3 mil. His opp cost at graduation was _____ and 8 yrs later was _____-
50k and 2mil
Between points b (500c or 800cloth) and C (750c or 600cloth) in the figure (a curve where b is above c), the opp cost of another bushel of corn is
whatever is falls between b & c which is the difference of C (750c) - B (500c) = 250/ 1/2 (point in between the both) so the answer is 1.25 yards of cloth
The opp cost of more capital goods today is
fewer consumer goods today
Economic growth can be pictured in a production possibilities curve diagram by
shifting the ppc out
in economic teminology, the accumulated training and education that workers receive that increases their productivity is referred to as
human capital
which of the following are considered factors of production?
all of these - land, labor, phsycal capital, entrepeneuship
when a country dumps some of its products in another country, it
sells its products abroad at a price lower than it costs to produce the goods
a new industry develops and we want to protect it from foreign competition. Which one of the following arguments would appropriately describe this type of protection
infant industry - new industy argument on sellers side..wining about giving the a chance to grow first because it's in its infantile time
which is the correct statement?

Days to produce each
Product US Mexico
PC 2 6
Bikes 4 12
The US has an absolute advantage in both BUT a comparative advantage in PC's
a quote is
a gvt imposed restriction on the quantity of a specific good that can be imported
a tariff is
a tax on imported goods
marginal utility describes
EXTRA utility for each additional good consumed
newspaper vending machines are often built so that customers can pay to lift a door and select a paper off of a pile of newpapers. Newspaper distributors are not concerned about customers taking the whole stack of papers because the
marginal utility of a second daily newspaper is zero
the total utility of water is
higher than the total utility of diamonds, but the marginal utility of diamonds is higher
If we graph total utility, then the total utility curve will
be increasing as LONG AS marginal utility is positive DUH!!
What is the marginal utility (extra incentive) for the 10th unit for Mary and John

Mary John
9 230 440
10 220 450
Mary -10, John +10
Ashley Olsen 18, is dating a 30 yr old. According to the economic way of thinking:
both are ENGAGED in a positive sum game
One poss that a woman would want to date an older man is
the costs are lower wih an older guy cuz boys are immature and play games and it's also a cool factor to date somebody older
One poss that an older woman wants to date a younger guy is
a. its a signal that she needs to grow up..nah that she is still young and vibrant
b. the costs are lower because the younger guy has less "baggage"
the benefits are higher because teh younger guy still want to have "fun"
The rise in dating services is due to the fact that
a. time has become more valuable to people who are searching for dates and
c. dating services reduce transaction costs for people who want to date
arguably, it is more likely that people who want to hook up prefer clubs to pubs
true that!
if you see your friend hooking up with an ugly person, the you an assume that
a. he/she gets utility from hooking up
b. the marginal cost of waiting for a hot person were rising
c. obviously ex ante your friend expected the benefits of hooking up to be higher than the costs
d. they were in a location were reputational capital losses would be low
if a guy sks a girl out on Friday night or offers to pay for the date, and the girl responds with "how about we meet on Monday afternoon" or "no, I do not allow men to pay for me"
b. she obviosly doesn't like the guy
c. the guy should prob. be a good economist and not waste his time
acc to henry h, nine tenths of the fallacies economists make are due to looking at
short term not Long term ONE group not all
T/F - hazlitt man argued that if you limited imports you would limit exports
TRUE that
T/F - Arnold argued that the more gvt interference with the economy the better he did and the country did
Nah..hell nah FALse
nader, when he argued taht we could afford to worry about everything, basically must believe that
a. scarcity does not exist
b. trade offs are not necessary
c. resources are free
T/F-when barry bonds or sammy sosa hit the weights in teh off season they are investing in their human capital
in recent TNT tv movie see Arnold Run, arnold ended a relationship he had with this woman because it would interfere with his bodybuilding. Arnold understood that
a. Time is scarce and he had a trade off
b. arnold reached the top of his total utility curve
T/F -the spring break there will men and women with various types of bathing suits. Some very modest others showing more skin. This can be explained using the concept of trade offs
T/F-you hear me say "i'm getting exploided by mason but I'm still here teaching" his revealed preference proves otherwise