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Principles, economics 130 study revision, Economics 130 Exam 1, ECON130 || with 100% Accurate Solutions.

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Principles, economics 130

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Principles, Economics 130

Economists use the term "utility" to refer to: correct answers The benefits to an individual from consuming a good. If the unemployment rate increases from 10% to 14%, the economy will correct answers Move away from the ppf toward the origin The economy was expanding during all of the years t...

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economists use the term utility to refer to

Institution Principles, economics 130
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Principles, economics 130 study revision, Economics 130
Exam 1, ECON130 || with 100% Accurate Solutions.
Economists use the term "utility" to refer to: correct answers The benefits to an individual from
consuming a good.

If the unemployment rate increases from 10% to 14%, the economy will correct answers Move
away from the ppf toward the origin

The economy was expanding during all of the years that I was a student, but as soon as I
graduated, the economy contracted. Therefore, the labor market was waiting until I started
looking for a job to contract. This statement is an example of correct answers post hoc, ergo
prompter hoc fallacy

The concept of opportunity cost correct answers can be applied to the analysis of any decision-
making process

Suppose an economy produces hybrid engines and solar panels in perfectly competitive
industries. The economy is currently operating at a point on its ppf. If a single firm gains control
over the production of solar panels, which of the following is most likely to happen? correct
answers The economy will move to a less desirable point on the PPF.

Production inefficiency occurs correct answers only when an economy produces underneath its
production possibility frontier.

Rent control laws are imposed when city officials believe landlords have been exploiting tenants.
Which of the following criteria are they using to guide their actions? correct answers equity

Microland is currently operating at Point B. You correctly deduce that correct answers in
Microland all resources are fully employed and there are no production inefficiencies

If someone has a comparative advantage in growing pineapples, correct answers they can grow
pineapples at a lower opportunity cost than other pineapple growers

According to Figure 2.4, the point where only hybrid cars are produced is correct answers A

Health insurance should be provided to every citizen in a wealthy nation such as the United
States. This statement is best described as correct answers A normative statement.

Whenever the Democrats gain control of the Congress, spending on social programs increases;
whenever Republicans gain control of the Congress, spending on defense increases. Hence, we
know what the next party in control will do. This statement is an example of correct answers post
hoc, ergo prompter hoc fallacy.

,The economic problem can best be stated as correct answers Given scarce resources, how exactly
do societies go about deciding what to produce, how to produce it, and for whom to produce?

Macroland is currently operating at Point A. The best explanation for this is that
(point is below ppf) correct answers The economy's resources are being used inefficiently

Firms are organizations that correct answers transform resources into products

You have decided that you want to attend a costume party as Iron Man. You estimate that it will
cost $40 to assemble your costume. After spending $40 on the costume, you realize that the
additional pieces you need will cost you $25 more. The marginal cost of completing the costume
is correct answers $25

The slope of a horizontal line is correct answers zero

If you observe that Event A happens before Event B happens, and you conclude that Event A
caused Event B, you would be guilty of an error called the correct answers post hoc, ergo
prompter hoc fallacy

Which of the following is most likely to shift the production possibility frontier from ppf1 to
ppf2?
(shifting outwards - away from origin) correct answers an increase in the general educational
level of the population

To isolate the impact of one single factor, economists invoke the assumption of correct answers
ceteris paribus

Suppose Frieda is offered a free voucher for one of the following: a movie, dinner at a restaurant,
or a concert. Frieda values the movie at $15, dinner at $20 and the concert at $40. Frieda's
opportunity cost of going to dinner is: correct answers $40

The shape of Macroland's production possibility frontier shows correct answers increasing
opportunity costs

Which of the following is an example of a normative statement? correct answers There should be
no unemployment in an advanced industrial society

Someone has a comparative advantage in producing a good if they can produce that good correct
answers at a lower opportunity cost

normal goods correct answers Goods for which demand goes up when income is higher and for
which demand goes down when income is lower.

inferior goods correct answers goods for which demand decreases as income increases

PPF correct answers whats possible given scarce resources for a society

,four elements of consumers choice correct answers income, price of goods, rationality, consumer
preferences

budget set correct answers all the different bundles of goods a consumer can afford

budget line correct answers A line that shows the different combinations of two products a
consumer can purchase with a specific money income, given the products' prices. WHEN THEY
SPEND ALL THEIR INCOME

changes in income shift the budget line correct answers parallel to the original

an increase in the price of a good has this effect on a budget line correct answers rotates it
depending on which good increases in price

income effect correct answers The IE focuses on a consumer‟s response to the
change in real purchasing power as price changes.

substitution effect correct answers The substitution effect is the economic understanding that as
prices rise — or income decreases — consumers will replace more expensive items with less
costly alternatives.

income effect correct answers the change in consumption resulting from a change in real income

real income correct answers Real income refers to the income of an individual or group after
taking into consideration the effects of inflation on purchasing power.

indifference curve shows us correct answers shows us the utility a person gets from a particular
bundle, all points along the indifference are just as good

the substitution effect always has a ---- effect or correlation correct answers negative

the income effect is usually correct answers positive or negative depending on whether the good
is inferior or normal.

total effect correct answers sum of SE and IE

institutions in economics are correct answers formal rules and informal conventions which guide
and regulate social and economic interactions

indifference curve allows us to correct answers compare various consumption bundles given a
persons preferences

Diminishing marginal utility correct answers Successive increments of a
good eventually become less
desirable.

, a consumer maximises their utility when they correct answers receive the same marginal utility
per dollar for both goods

equi-marginal principle correct answers the consumer should purchase a bundle of goods where
the marginal utility per dollar gained is equal from both goods

The bundle that maximises a consumer‟s utility is
found by bringing together correct answers their budget line and their indifference curve

real wage correct answers nominal wage adjusted for inflation

input(factor of production) correct answers is a good or service used to produce an output

saving is a choice correct answers of two goods, goods today and goods tomorrow

Three determinants of saving are: correct answers income (from which people save)
the interest rate (which yields a return to saving)
how much people care about current consumption
relative to future consumption (time preference).

The inter-temporal budget constraint shows correct answers shows the possible combinations of
consumption in the working period and in the retirement period

resource allocation correct answers demand and supply interact to determine relative prices,
which determines resource allocation

determinants of demand correct answers change in consumer tastes and preferences.
change in number of buyers.
change in income (affects normal vs inferior goods).
change in prices of related goods (complementary or substitute goods).
change in buyer expectations (future prices vs future incomes).

supply correct answers amount producers are willing and able to sell.
individual supply.
market supply.

market equilibrium correct answers occurs where demand curve and supply curve intersect.
equilibrium price and equilibrium quantity.
surplus and shortage.
rationing function of prices.
efficient allocation.

productive efficiency correct answers producing goods in the least costly way.
using the best technology.
using the right mix of resources.

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Exam (elaborations)

Principles, economics 130 study revision, Economics 130 Exam 1, ECON130 || with 100% Accurate Solutions.

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