Eco2023 Test 1

Front 1

The overriding reason as to why households and societies face many decisions is that...

Back 1

resources are scarce

Front 2

the principle that "people face tradeoffs" applies to

Back 2

individuals, families, societies

Front 3

which of the following phrases best captures the notion of efficiency?

Back 3

minimum waste

Front 4

when the government attempts to improve equity in an economy the result is often

Back 4

a reduction in efficiency

Front 5

when you calculate your true costs of going to college, what portion of your room and board expenses should be included?

Back 5

you should include only the amount by which your room and board expenses exceed the expenses for rent and food if you were not in college

Front 6

college age athletes who drop out of college to play professional sports

Back 6

are well aware that their opportunity cost of attending college is very high

Front 7

rational people make decisions at the margin by

Back 7

comparing marginal costs and marginal benfits

Front 8

if the U.S. decides to trade with Mexico, we know that

Back 8

Mexico and the U.S. can both benefit

Front 9

an economic theory about international trade that is based on the assumption that there are only 2 countries and 2 goods

Back 9

can be useful in helping economists understand the complex world of international trade involving many countries and many goods

Front 10

according to Miller, et al, the terrible trade off in teh FDA's decision to introduce new prescription drugs can be described by the following sentence

Back 10

the longer it takes to approve a new drug the greater the nmber of ppl who die form lack of access to the potentially helpful drug, whereas the less time it takes to approve a potentially helpful drug the fewer the number of people who die because they had access to it

Front 11

factors of production are

Back 11

used to produce goods and services

Front 12

in the simple circular-flow diagram, households

Back 12

own the factors of production

Front 13

production is efficient if the economy is producing at a point

Back 13

on the production possibilties frontier

Front 14

a production possibilities frontier shifts outward when

Back 14

the economy experiences economic growth

Front 15

regan grows flowers and makes ceramic vases. Jayson also grows flowers and makes vases, but regan is better at producing both, in this case trade could...

Back 15

benefit both Jayson and Regan

Front 16

a countries consumption possibilities frontier can be outside its producton possibilities frontier if

Back 16

the country engages in trade

Front 17

according to miller, et al, running automobiles on ethanol

Back 17

has replaced gasoline only at a high opportunity cost

Front 18

the producer that requires a smaller quantity of inputs to produce a certain amount of a good, relative to the quantities of inputs required by other producers to produce the same amount of that good

Back 18

has an absolute advantage in the production of that good

Front 19

the principle of comparative advantage does not provide answers to certain questions. One of those questions is as follows

Back 19

how are the gains from trade shared among the parties to a trade?

Front 20

belarus has a comparative advantage in the production of linen, but russia has an absolute advantage in the production of linen. if these 2 countries decide to trade

Back 20

belarus should export linen to russia

Front 21

suppose today ppl change their expectation about the future this change in expectations

Back 21

can affect today's demand

Front 22

the negative relationship between price and quanity demanded

Back 22

applies to most goods in the country

is represented by a downward sloping demand curve

is referred to as the law of demand

Front 23

suppose the AMA announces that men who shave their heads are less likely to die of heart failure, we could expect the current demand for

Back 23

razors to increase

Front 24

other things equal, when the price of a good rises, the

Back 24

quantity supplied of the good increases

Front 25

according to miller, et al, death by airplane crash is a bad thing. the question is how safe we shold make airline travel

Back 25

put just enough emergency exit doors such that the expected marginal beefit of providing them exceeds or equals the marginal cost of installing and maintaining them

Front 26

elasticity improves our understanding of supply and demand by adding

Back 26

a quantitative element to our analysis

Front 27

for a good that is a necessity

Back 27

demand tends to be inelastic

Front 28

holding all other forces constand, when the rpice of gasoline rises, the number of gallons of gasoline demanded would fall substantially over a 10 year period because

Back 28

buyers tend to be much more sensitive to a change in price when given more time to react

Front 29

the price elasticity of demand for a good measures the willingness of

Back 29

consumers to move away from the good as price rises

Front 30

if the price elasticity of demand for a good is 1.65, then a 3 percent decrease in price results in a

Back 30

4.95% increase in the quantity demanded

Front 31

According to miller, et al, the increasing weight of american males and females can be explained by the supply and demand for food. which explanation fo the authors emphasize?

Back 31

due to advances in food processing technology the full cost (money + time cost) of preparing a meal has increased

Front 32

eric produces jewelry boxes. if the demand for jewelry boxes is elastic and eric wants to increase his total revenue, he should

Back 32

decrease the price of his jewelry boxes

Front 33

the presence of price controls in a market usually is an indication that

Back 33

policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers

Front 34

a price ceiling is binding when it is set

Back 34

below the equilibrium price, causing a shortage

Front 35

an outcome that can result from either a price ceiling or a price floow is

Back 35

a nonbinding price control

Front 36

when OPEC raised the price of crude oil in the 1970s, it caused the

Back 36

supply of gas to decrease

quantity of gas demanded to decrease

equilibrium price of has to increase

Front 37

which of the following statements about the effects of rent control is correct

Back 37

the short run effect of rent control is a relatively small shortage of apartments, and the lng run effect of rent control is a larger shortage of apartments

Front 38

one economist has argued that rent control is "the best way to destroy a city, other than bombing". Why would an economist say this?

Back 38

he fears that rent control will eliminate the incentive to maintain buildings leading to a deterioration of the city

Front 39

at a minimum wage that exceeds the equilibrium wage

Back 39

the quantity supplied of labor, will exceed the quantity demanded

Front 40

according to Miller, et al, why are women paid less than men?

Back 40

men, more than women, are employed in hazardous jobs and hence earn a higher wage known as the compensatin differential