Econ102- Exam #1

Front 1

Scarcity is:

Back 1

our inability to satisfy all our wants

Front 2

Bill graduates from college with a choice of playing pro football at $2 mill a year or coaching for $50,000 a year. He decides to play football, but eight years later, though he could continue to play football at $2 mill a year, he quits football to make movies for $3 million a year. His opportunity cost of playing football at graduation was _____ and 8 years later the opportunity cost of making movies was _____.

Back 2

$50,000; $2 million

Front 3

Which of the following is a normative statement?

Back 3

The gov.'s cuts in welfare spending impose an unfair hardship on the poor.

Front 4

Which of the following is a positive statement?

Back 4

People buy more of a good or service when its price falls.

Front 5

An outcome is considered efficient if

Back 5

it is not possible to make someone better off without making anyone else worse off.

Front 6

During the summer you have made the decision to attend summer school, which prevents you from working atyour usual summer job in which you normally earn $6,000 for the summer. Your tuition cost is $3,000 and books and supplies cost $1,300. In terms of dollars, the opportunity cost of attending summer school is

Back 6

$10,300.

Front 7

If this country wishes to move from its current production point and have 10 more tons of food, it can do this by producing

Back 7

5 fewer tons of clothing.

Front 8

The table shows production combos on a country's PPF. What is theopportunity cost of increasing the production of X from 0 to 3 units?

Back 8

4/3 units of good Y per unit of good X

Front 9

As output moves from point a to point b to point c along the PPF in the above figure, the opportunity cost of 1 more unit of good X

Back 9

rises. The opportunity cost of one more unit of good Y falls.

Front 10

Marginal benefit is the benefit ________ one more unit of the good and ________ of the good increases.

Back 10

from consuming; decreases as consumption

Front 11

The table above shows the marginal benefit from pizza & marginal cost of pizza in cans of soda forgone. If____ pizzas are produced, the quantity of soda that ppl are willing to give up to get an additional is more than the quantity of soda that they must give up to get that additional pizza.

Back 11

fewer than 40.

Front 12

If 4 million computers are produced per year then the ________ should be produced toachieve the allocatively efficient use of resources

Back 12

marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers

Front 13

The opportunity cost of economic growth is

Back 13

present consumption that a nation gives up to accumulate capital

Front 14

Technological progress makes the production possibilities frontier

Back 14

shift outward from the origin.

Front 15

An increase in the production of capital goods

Back 15

shifts the production possibilities frontier outward in the future.

Front 16

In March a factory used new technology to produce its output. Then in August a fire destroys half the factory.The new technology shifted the factory's PPF ________ and the fire shifted it ________.

Back 16

outward; inward

Front 17

Markets are best defined as

Back 17

arrangements where buyers and sellers get together to buy and sell.

Front 18

The social arrangement that gives John Grisham, the writer of best-selling novels, the ownership of his novels is

Back 18

property rights.

Front 19

The price of a bag of corn chips is $3, and the price of a bottle of soda is $1. What is the relative price of a bottleof soda?

Back 19

1/3 bag of corn chips per bottle of soda

Front 20

The relative price of a good is

Back 20

opportunity cost.

Front 21

The "income effect" in the market for aspirin means that

Back 21

an increase in the price of aspirin will reduce the total purchasing power of aspirin takers, making themable to afford fewer aspirin.

Front 22

If consumers' incomes increase and the demand for bus rides decreases,

Back 22

bus rides are an inferior good.

Front 23

The figure shows the market for bicycles. When there is a physical fitness craze so that everyone wants toexercise the

Back 23

demand curve for bicycles shifts from D1 to D2.

Front 24

The figure above shows supply curves for soft drinks. Suppose the economy is at point a. A movement to point dwould be the result of

Back 24

an increase in the relative price of a soft drink.

Front 25

Ticket scalpers at the NCAA basketball tournament last year charged prices high above the printed ticket price. This observation is evidence of

Back 25

a shortage at printed ticket prices.