BSAD520 Quizzes

 One of the effects of gas prices rising from about $2 to about $4 per gallon was airlines ordering new, fuel-efficient aircraft.

True

Trade can make everyone better off except in the case where one person is better at doing everything.

False

The invisible hand ensures that economic prosperity is distributed equally.

False

The government can potentially improve market outcomes if market inequalities or market failure exists.

True

Fundamentally, economics deals with

Scarcity

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

resources are scarce

The phenomenon of scarcity stems from the fact that

resources are limited

In most societies, resources are allocated by

the combined actions of millions of households and firms.

Economics is the study of how society manages its

unlimited wants and limited resources.

While pollution regulations yield the benefit of a cleaner environment and the improved health that comes with it, the regulations come at the cost of reducing the incomes of the regulated firms' owners, workers, and customers. This statement illustrates the principle that

people face tradeoffs.

Efficiency means that

society is getting the most it can from its scarce resources.

Efficiency

refers to how much a society can produce with its resources. Equality refers to how evenly the benefits from using resources are distributed among members of society. Senator Jackson argues that replacing the federal income tax with a national sales tax would increase the level of output. Senator Feldman objects that this policy would benefit the rich at the expense of the poor. Senator Jackson's argument is primarily about efficiency, while Senator Feldman's argument is primarily about equality. The basic principles of economics suggest that government should become involved in markets when those markets fail to produce efficient or fair outcomes. A rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit. False An economy's production of two goods is efficient if it is impossible to produce more of one good without producing less of the other. The production possibilities frontier provides an illustration of the principle that  people face trade-offs. Refer to Figure 2-3 . I t is not possible for this economy to produce at point c. C. Refer to Figure 2-3. This economy cannot currently produce 70 washers and 70 dryers because it does not have the resources and technology to produce that level of output. Refer to Figure 2-4, Graph (a) . Production at point K is                                           graph a                                                       graph b possible but inefficient. Refer to Figure 2-4, Graph (a) . Production is                                           graph a                                                       graph b  possible at points J, K, L, and M, but efficient only at points J, L, and M. Refer to Table 2-3. Which of the following combinations of corn and wheat is not currently attainable but would be attainable if there was an improvement in overall production technology? Table 2-3 Production Possibilities Corn (Bushels) Wheat (Bushels)  2,000 0  1,600 700   1,200 1,300  800 1,800 400 2,200 0 2,500 1,000 bushels of corn and 2,200 bushels of wheat Refer to Figure 2-6. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of each car is  the slope of the production possibilities frontier, or 3/2 sofas. Economic models omit many details to allow us to see what is truly important. True Refer to Figure 2-10. When this economy produces 30 doghouses and 25 dishwashers there is full employment. False Refer to Figure 2-11. The opportunity cost of moving from point A to point B is zero. False Points on the production possibilities frontier represent efficient levels of production. True The opportunity cost of something is what you give up to get it. True When a production possibilities frontier is bowed outward, the opportunity cost of the first good in terms of the second good increases as more of the second good is produced. False If new government regulations designed to protect wetlands remove very productive farmland from production, then the production possibilities frontier will shift inward. True

Please enter question and answer before this statement