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ECON 130 exam 1 || Questions and 100% Verified Answers.
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  • ECON 130

Microeconomics correct answers the branch of economics that studies the choices of individuals, including households, business firms, and government agencies. Macroeconomics correct answers the branch of economics that studies large-scale economic phenomena, particularly inflation, unemployment,...

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  • August 17, 2024
  • 12
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • microeconomics

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  • ECON 130
  • ECON 130

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ECON 130 exam 1 || Questions and 100% Verified Answers.
Microeconomics correct answers the branch of economics that studies the choices of individuals,
including households, business firms, and government agencies.

Macroeconomics correct answers the branch of economics that studies large-scale economic
phenomena, particularly inflation, unemployment, and economic growth.

Goods correct answers have a physical tangible presence

what is an example of a good? correct answers pizza

Services correct answers have no physical tangible presence but have economic value

what is an example of a service? correct answers Delivery of pizza

What percent of US workers produce goods? correct answers U.S. 20%

what percent of Tanzanian workers produce goods? correct answers Tanzania 80%

What percent of workers in Hawaii produce service? correct answers 96% of workers in Hawaiʻi
produce services

what are the three factors of production? correct answers Labor, capitol, natual resources

Labor correct answers "The contributions to production made by people working with their
minds and muscles

Capital correct answers "all means of production that are created by people, including tools,
industrial equipment, and structures".

what are some examples of capital? correct answers factories, concrete mixers, deep fat fryers,
computer software

Natural Resources correct answers "Anything that can be conceived as a productive input in its
natural state, such as farmland, building sites, forests, and mineral deposits."

What goods and services will we produce? correct answers The factors of production are limited
If a factor has more than one use, using it to produce one thing means giving up the opportunity
to produce something else
Economists call this "Opportunity Cost"

Opportunity Cost correct answers "the cost of a good or service measured in terms of the forgone
opportunity to pursue the best possible alternative activity with the same time and resources".

, You won a free ticket to see an Eric Clapton concert (which has no resale value). Bob Dylan is
performing on the same night and is your next-best alternative activity. Tickets to see Dylan cost
$40. The benefit you get from seeing Bob Dylan is equal to $50. Based on this information, what
is the opportunity cost of seeing Eric Clapton?

A. $0
B. $10
C. $40
D. $50 correct answers B. $10

How will these goods and services be produced? correct answers There is more than one way to
produce almost any good or service.
For example, cars or teaching.
Efficiency is a key consideration in deciding how to produce.

Pareto Efficiency in distribution correct answers "you have gotten to the point where you can't
make somebody better off without making somebody worse off

Efficiency in production correct answers it's efficient if you can't make more of one good without
making less of another good

Inefficient in Distribution correct answers you can still make somebody better off without
making anybody worse off

Inefficient in Production correct answers you can still make more of a good or service without
making less of a good or service

Who will produce which goods and services? correct answers It is generally much more efficient
to cooperate in production
This idea is called the "Division of Labor" and it is attributed to Adam Smith

what is Adam smith's two most important ideas? correct answers The Division of Labor
and The "Invisible Hand" of the market

Comparative Advantage correct answers Is "the ability to produce a good or service at a
relatively lower OPPORTUNITY COST than someone else"

Absolute Advantage correct answers is "the ability to produce a good or service at a relatively
lower INPUT cost than someone else"

your friend invites you ove for a party at their house. it cost you $20 for a taxi to their house.
You could spend the same time working at your part-time job at the library and earn $50. You
are trying ti decide to attend the party or go work. what is the total ECOMONIC COST for
attending the party?
A. $20
B. $30

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