Economics (外事系一)
Homework 1 (100%, 4 points for each)
Due on 10/09 (Submit answer sheet only, answer sheet has posted on website)
1. The study of economics would be superfluous if ______did not exist.
a. / government economic policyb. / money
c. / corporations
d. / profit
e. / scarcity
ANS: e
2. Economics is
a. / the study of the markets for stocks and bondsb. / the study of choice under conditions of scarcity
c. / exclusively the study of business firms
d. / fundamentally the same as sociology
e. / applicable only when scarcity is not a problem
ANS: b
3. Economics is the study of
a. / how to start a businessb. / how to make money in stocks, bonds, and real estate
c. / choice under conditions of abundance
d. / choice under conditions of scarcity
e. / multinational business
ANS: d
4. Under capitalism, individuals are forced to make choices because
a. / scarce time, but not scarce spending powerb. / scarce spending power, but not scarce time
c. / neither scarce time nor scarce spending power
d. / both scarce time and scarce spending power
e. / a low material standard of living
ANS: d
5. Society's resources include
a. / land and laborb. / labor and machinery
c. / land, labor, and capital
d. / land, capital, and money
e. / labor, capital, and money
ANS: c
6. Economists refer to a physician's knowledge and skills as
a. / human capitalb. / labor
c. / physical capital
d. / entrepreneurship
e. / intellectual raw materials
ANS: a
7. Which of the following is studied in microeconomics?
a. / the total output of an economyb. / the measurement of a nation's inflation rate
c. / how producers and consumers interact in individual markets
d. / how tax policies influence economic growth
e. / whether wage growth will outpace inflation in the coming year
ANS: c
8. Which of the following might a microeconomist study?
a. / how inflation changes over time for several countriesb. / how money supply aggregates are measured
c. / economic growth in less-developed countries in Africa
d. / the relationship between aggregate income and aggregate personal consumption
e. / why wages for females are lower than for males in a particular labor market
ANS: e
9. Which of the following would be studied in macroeconomics?
a. / a drop in the price of personal computersb. / an individual household's decision on allocating its spending power
c. / a rise in employment in movie theaters across the nation
d. / total output in the nation
e. / a local bank's increase in the interest rate offered on savings deposits
ANS:d
10.Macroeconomics studies the determination of
a. / total output, total employment, the general price level, and the general level of interest ratesb. / total output and the general level of interest rates only
c. / total employment and the general level of prices only
d. / the interaction of individual economic actors in specific markets and industries
e. / the levels of employment and prices in specific markets and industries
ANS: a
11. Which of the following is a positive statement?
a. / Driving speeds should be lowered so that fewer accidents will occur.b. / When per capita income falls, fewer meals are consumed at restaurants.
c. / The minimum wage is too low; college students deserve a raise.
d. / Cigarette sales should be made illegal in order to reduce the incidence of cancer.
e. / Social Security is a good program for U.S. workers.
ANS: b
12. The three groups of decision makers in the economy are
a. / households, business firms, and banksb. / households, business firms, and governments
c. / business firms, governments, and banks
d. / business firms, banks, and foreign traders
e. / households, governments, and banks
ANS: b
13. Opportunity costs exist because
a. / there is a price attached to virtually every good or serviceb. / technology is not fixed in the economy
c. / people have different tastes and preferences
d. / limited resources cannot be used to satisfy all of the wants in society
e. / the production possibilities frontier is bowed inward with respect to the origin
ANS: d
14. Figure 2-1 illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time. What is the opportunity cost for this person of moving from point a to point b?
a. / $5 of income per weekb. / $10 of income per week
c. / two hours of studying per week
d. / $10 per hour of studying per week
e. / $20 of income per week
ANS: b
15. Kate takes a part-time job and the resulting sacrifice of study time causes her grade point average to fall from 3.5 to 2.9. Assume that her grade point average would have stayed at a 3.5 if study time had not been reduced. Her opportunity cost of having taken the job is the
a. / cost of tuitionb. / 3.5 grade point average
c. / 0.6 decrease in the grade point average
d. / 2.9 grade point average
e. / money earned from the part-time job
ANS: c
16.A consultant who earns $100 per hour takes four hours off work to go to a movie. The out-of-pocket cost for the cab and the movie ticket are $12. For this consultant, the total cost of the movie is
a. / $12b. / $412
c. / $400
d. / $388
e. / $112
ANS: b
17. All production involves an opportunity cost because
a. / to produce costs moneyb. / costs of production are sky rocketing
c. / to produce more of one thing, we must produce more of everything
d. / to produce more of one thing, we must produce less of something else
e. / when an individual obtains more of a good, he may not be fully satisfied
ANS: d
18. Assume that U.S. agricultural land is used either to raise cattle for beef or to grow wheat. Figure 2-3 depicts the production possibility frontier for beef and wheat. Between points F and G, the opportunity cost of one bushel of wheat equals
a. / 0.25 million pounds of beefb. / 1.75 million pounds of beef
c. / 0.125 pounds of beef
d. / 8.0 pounds of beef
e. / 0.5 pounds of beef
ANS: c
19. Assume that U.S. agricultural land is used either to raise cattle for beef or to grow wheat. Figure 2-3 depicts the production possibility frontier for beef and wheat. Production at point H is
a. / unattainable given currently available technology and resourcesb. / attainable by more fully employing already available resources
c. / attainable by using better technology which is already available
d. / attainable if beef production drops to zero
e. / attainable if all available resources are used to produce wheat
ANS: a
20. Assume that U.S. agricultural land is used either to raise cattle for beef or to grow wheat. Figure 2-3 depicts the production possibility frontier for beef and wheat. Between points F and G, the opportunity cost of each pound of beef equals
a. / 0.25 million bushels of wheatb. / 1.75 million bushels of wheat
c. / 0.125 bushels of wheat
d. / 8 bushels of wheat
e. / 0.5 bushels of wheat
ANS: d
21. Figure 2-4 shows the production possibilities frontier for a plant that can produce both VHS tapes and DVDs. The opportunity cost of moving from point B to C is
a. / 20 DVDsb. / 120 VHS tapes
c. / 100 DVDs
d. / 60 VHS tapes
e. / 180 VHS tapes
ANS: d
22.If technology improves, all else constant,
a. / the production possibilities frontier will shift inwardb. / society faces larger opportunity costs of shifting productive resources from one use to another
c. / goods and services will increase in price
d. / the economy must have some idle resources
e. / the production possibilities frontier will shift outward
ANS: e
23. If Japan could produce more steel in a year than the United States using the same amount of resources, then
a. / Japan must have an absolute advantage in producing steelb. / the United States must have a comparative advantage in producing steel
c. / Japan must have a comparative advantage in producing steel
d. / neither the United States nor Japan has a comparative advantage in producing steel
e. / there are no gains from specialization
ANS: a
24. Specialization and exchange result in
a. / lower production levels than would otherwise be possibleb. / higher living standards than would otherwise be possible
c. / more downtime as workers switch activities more frequently
d. / the assignment of workers to activities according to their preferences
e. / self-sufficiency
ANS: b
25. One disadvantage of specialization is that it
a. / can be boringb. / costs people their jobs
c. / reduces political power
d. / can be an excuse to boss people around
e. / reduces people's intelligence
ANS: a