ECON312N Week 1 Homework Latest 2019 September

ECON312N
Principles of Economics

Week 1 Homework

Question 1

Label each entry in
the list as dealing with a microeconomic topic or a macroeconomic topic. Type
microeconomic or macroeconomic for each item.

Motor vehicle production in China is growing
by 10 percent a year.

Coffee prices rocket.

Globalization has reduced African poverty.

The government must cut its budget deficit.

microeconomic Apple
sells 20 million iPhone 6 a month.

Question 2

A professor changes
the penalty for cheating on exams from getting a 0 on the exam to getting an F
in the course. The professor has

recognized that students don’t respond to
incentives.

increased the marginal cost of cheating.

decreased the marginal benefit of cheating.

made all the students act in the social
interest.

recognized that students don’t make rational
choices.

Question 3

John has two hours of
free time this evening. He ranked his alternatives, first go to a concert,
second go to a movie, third study for an economics exam, and fourth answer his
e-mail. What is the opportunity cost of attending the concert for John?

attending a movie

studying for an economics exam

answering his e-mail

going to the concert because that is what
John choose to do

attending a movie, studying for an economics
exam, and answering his e-mail

Question 4

The vertical axis in a
graph

has no origin.

measures time only in a time series graph.

measures time in a cross-section and time
series graph.

is named the x-axis.

is named the y-axis.

Question 5

If workers in Mexico
produce fewer goods and services per hour than workers in the United States in
all areas of production, then

both the United States and Mexico will
benefit from trade with the other.

the United States will benefit from trade
with Mexico but Mexico will not.

Mexico will benefit from trade with the
United States but the United States will not.

it is unknown whether either country can
benefit from trade with the other.

neither Mexico nor the United States will
benefit from trade with the other.

Question 6

In a production
possibilities frontier graph, the cost of producing more units of a good is
measured by the

None of the above answers is correct.

area in the arc between the PPF and a
straight line drawn between the starting point and the ending point.

dollar value of the resources used to produce
the good.

dollar value of the additional output.

amount of the other good or service that must
be forgone.

Question 7

If Jessie studies
economics for two hours instead of going to the movies with her friends, then

the benefit of studying is the missed movie.

Jessie is not responding to any incentives.

the opportunity cost of studying is the
missed movie.

Jesse definitely is making a rational choice.

Jessie is ignoring a sunk cost.

Question 8

Which of the following
is the best definition of economic growth?

The opportunity cost of consumption

The investment in capital and consumption
goods by an economy

The sustained expansion of production
possibilities

Increased development of land and
entrepreneurship

The opportunity cost of capital

Question 9

The figure above shows
the relationship between the price of a dozen roses and the quantity of roses a
florist can sell. The slope between points A and B is

16.

2.

nonexistent because at point A, no roses are
sold.

4

20.

Question 10

When Ford decides to
increase production of hybrid cars, it directly answers the ________ question.

where

how

for whom

why

what

Question 11

Because human wants
are insatiable and unlimited while available resources are limited, people are
said to face the problem of

scarcity.

social interest versus self-interest.

why to produce.

macroeconomics.

microeconomics.

Question 12

Economics is the
social science that studies

the real reasons people buy goods and
services.

whether a nation has enough natural
resources.

the psychology of individuals and businesses.

how people make choices to cope with
scarcity.

how choices made in the social interest could
eliminate scarcity.

Question 13

A country has a
comparative advantage in the production of a good if it can

tradeoff producing the good for another good.

produce more of the good most efficiently.

produce the good at the lowest opportunity
cost.

produce the good on and remain on its
production possibilities frontier.

produce more of the good than another
country.

Question 14

“As the price of
gasoline increases, fewer people buy cars that are gas guzzlers.” A graph
showing this relationship would

have a positive relationship.

be a horizontal line.

have a
negative slope.

be a vertical line.

have a direct relationship.

Question 15

A graph shows the
average SAT scores for males and females in 2012. The kind of graph used to
show these data would be a

time-series graph.

time-stationary graph.

scatter diagram.

trend figure.

cross-section graph.

Question 16

Suppose that Germany,
France, Estonia, and India all have the same production possibilities,
illustrated in the figure above. Based on the production points in the figure,
which country is most likely to expand its PPF to PPF3?

India

France and Germany equally

France

Estonia

Germany

Question 17

If a nation devotes a
larger share of its current production to consumption goods, then

its economic growth will slow down.

it must produce at a point within its PPF.

its PPF will shift inward.

its PPF will shift outward.

some productive factors will become
unemployed.

Question 18

Hank requires 1 hour
to cut the grass and 3 hours to clean the house. His sister Holly requires 1
hour to cut the grass and 4 hours to clean the house. Which of the following
statements is true?

Holly has a comparative advantage in cutting
the grass.

Hank has a lower opportunity cost of cutting
the grass.

Hank has a comparative advantage in both
cutting the grass and cleaning the house.

Hank has an absolute advantage in both
cutting the grass and cleaning the house.

Hank and Holly both have a comparative
advantage in cutting the grass.

Question 19

The above figure shows
the production possibility frontier for an economy. The point or points that
are attainable and production efficient are

points A, B, C, and D.

points B and C.

points A, B, and C.

points A and D.

point E.

Question 20

When Fresh Express
Salads decides to mechanically pick all of its lettuce, it directly answers the
________ question.

for whom

where

what

how

when

Question 21

As a shoe factory adds
more workers, shoe production grows, reaches a maximum, and then shrinks. In a
diagram that has the number of workers on the horizontal axis and the number of
shoes on the vertical axis, the relationship between the number of workers and
the number of shoes starts as ________ and then, after the maximum point, is
________.

positive; negative

positive; nonexistent

positive; linear

linear; negative

negative; positive

Question 22

In the above figure, a
negative relationship between x and y is shown in Figure

B.

C.

D.

A.

B and C.

Question 23

Canada has
nationalized health care, so that everyone, regardless of their ability to pay,
has some access to health care. Based on this observation, Canada has decided
that “everyone, regardless of their ability to pay” is the answer to
what microeconomic question?

For whom will health care be produced?

How will health care be produced?

What type of health care will be produced and
in what quantity?

Must we offer health care?

Why will we offer health care?

Question 24

For country Gamma, the
opportunity cost for producing 1 computer is 10 tons of steel. For country
Beta, the opportunity cost for producing 1 computer is 6 tons of steel. Which
country has the comparative advantage in the production of steel?

Neither country has the comparative advantage
in the production of steel.

More information is needed to determine which
of the two nations has the comparative advantage.

Beta

Both have the comparative advantage in the
production of steel.

Gamma

Question 25

A graph shows the wage
rate of factory workers. The slope of the line is positive for periods when the
wage rate is

high and falling.

low and falling.

rising.

falling.

high and not changing.

Question 26

Which of the following
would most likely cause a country’s production possibilities set to shift
outward at every point along the frontier?

a decrease in idle capital

a general technological advance that affects
all sectors of the economy

none of the above

a technological advance in only one sector of
the economy

a decrease in unemployment

Question 27

A major earthquake
occurs in the central part of the United States. What impact would this have on
the nation’s production possibilities frontier and why?

It would shift inward because some of the
nation’s resources, such as capital and labor, would be destroyed.

Nothing would happen because the nation would
still have the same capabilities.

It would shift outward because unemployment
would be reduced.

A tradeoff would occur to replace the
resources and goods destroyed.

It would not shift because people would get
to work to replace any capital that was destroyed.

Question 28

The decision to go to
graduate school is a rational one for a college student if the

opportunity cost of graduate school equals
zero.

marginal benefit of graduate school exceeds
the marginal cost.

student carefully compared the social
benefits of this decision.

marginal cost exceeds the marginal benefit of
graduate school.

cost is not too great.

Question 29

If John can produce 10
chairs or 20 lamps during a week while Mary can produce 12 chairs or 22 lamps
in the same time, who has the absolute advantage in producing each good?

Mary in producing chairs, John in producing
lamps

John in producing both goods

Mary in producing both goods

Both Mary and John in both goods

John in producing chairs, Mary in producing
lamps

Question 30

To increase its
economic growth, a nation should

limit the number of people in college because
they produce nothing.

eliminate expenditure on capital goods.

increase current consumption.

encourage education because that increases
the quality of labor.

encourage spending on goods and services.