Economics 1-4
mimo_doll
hw_1-4.docxQUESTION 1
1. Which of the following is the best definition of economics?
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the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided |
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the study of how consumers spend their income |
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the study of how business firms decide what inputs to hire and what outputs to produce
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the study of how the federal government allocates tax dollars |
10 points
QUESTION 2
1. The reason that opportunity costs arise is that
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an economy relies on money to facilitate exchange of goods and services.
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resources are scarce
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there are no alternative decisions that could be made.
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people have limited wants. |
10 points
QUESTION 3
1.
The process by which resources are transformed into useful forms is
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capitalization.
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consumption.
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production. |
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allocation.
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10 points
QUESTION 4
1. Which of the following would an economist classify as capital?
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a $50 bill |
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a corporate bond
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a post office employee
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a guitar used by a musician |
10 points
QUESTION 5
1. The production possibility frontier is a graph that shows
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all the combinations of goods and services that are consumed over time if all of society's resources are used efficiently.
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the amount of goods and services consumed at various average price levels
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the rate at which an economy's output will grow over time if all resources are used efficiently.
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all the combinations of goods and services that can be produced if all of society's resources are used efficiently. |
QUESTION 6
1.
According to the previous figure, the point where only hybrid cars are produced is
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A
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B
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C
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E |
10 points
QUESTION 7
1. In input or factor markets,
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consumers purchase products.
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firms supply goods.
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households supply resources.
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households demand goods.
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10 points
QUESTION 8
1. In an output market,
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consumers purchase products
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firms purchase resources.
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households earn income.
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land, labor and capital may be exchanged. |
10 points
QUESTION 9
1. The "law of demand" implies that
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as prices fall, demand increases.
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as prices rise, demand increases.
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as prices fall, quantity demanded increases.
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as prices rise, quantity demanded increases. |
10 points
QUESTION 10
1.
According to the previous figure, which of the following would be most likely to cause the demand for Dr. Pepper to shift from D0 to D1?
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a increase in income, assuming that Dr. Pepper is a normal good
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a decrease in the preferences of consumers for Dr. Pepper
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undertake.a reduction in the price of sugar used to make Dr. Pepper |
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a decrease in the price of Dr. Pepper
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