ECO101H1 Lecture Notes - Lecture 1: Resource Allocation, Opportunity Cost, Human Capital

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11 Sep 2018

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ECO101H1 Lecture Notes - Lecture 1: Resource Allocation, Opportunity Cost, Human Capital

Document Summary

Economics is the study of interaction between firms and households as well as study of scarce resources allocation. There are 3 main decisions which economics analyze: what goods and services should be produced, how should these goods be produced, who should get these goods and services that have been produced. Scarcity: when a resource is limited so that all demands for it cannot be satisfied. There are 3 categories of resources: land- all natural resources of our planet: oil, forests, fish and etc, labor- human force: both physical and mental. Capital includes buildings, structures, equipment, vans and etc. It is obvious that, if you spend on something, you have to give up the good or service you could have purchased instead. Opportunity cost: the value (often expressed in dollars) of the alternative, foregone when using a resource. Opportunity cost is the main reason why we are thinking about buying or not buying a good or service.

Related Questions

1. Which of the following groups of countries are all advanced economies?

		Hong Kong, Japan, France, and the United Kingdom
		Italy, the United States, China, and Russia
		Singapore, Russia, France, and Chad
		Australia, Brazil, and the United States

QUESTION 2

1. The most people live in ________ economies and the fewest people live in ________ economies.

		developing; emerging market
		advanced; emerging market
		emerging market; developing
		advanced; developing

QUESTION 3

1. Households and firms in the U.S. economy interact with those in the rest of the world in the ________ market and the ________ market.

		goods; financial
		government; goods
		goods; factor
		financial; factor

QUESTION 4

1. As a factor of production, oil reserves are counted as

		labor.
		capital.
		entrepreneurship.
		land.

QUESTION 5

1. ________ the owners of the factors of production, while ________ what amounts of those factors to hire.

		Households are; the government determines
		Firms are; households that determine
		The government is; firms determine
		Households are; firms that determine

QUESTION 6

1. The emerging market economies are

		the nations that are currently agricultural in nature.
		most of the nations of Western Europe.
		the largest grouping including the nations of China and India.
		in the transition from state-owned production to free markets.

QUESTION 7

1. In the United States, the productive factor that, as a group, receives the largest fraction of the nation's total income was

		consumption of goods and services.
		entrepreneurship.
		capital.
		labor.

QUESTION 8

1. Items bought by individuals to provide personal enjoyment are termed

		personal goods.
		consumption of goods.
		consumption or investment goods.
		standard goods.

QUESTION 9

1. In the advanced economies, ________ of the factories use advanced capital equipment and in the developing economies ________ of the factories use advanced capital equipment

		virtually all; none
		some; some
		virtually all; virtually all
		virtually all; some

QUESTION 10

1. The productive resource that includes all the "gifts of nature" is called

		land.
		labor.
		entrepreneurship.
		capital.

QUESTION 11

1. What would be an example of government good?

		Donald Trump purchases furniture for his office.
		Antonio, the manager of the local Taco Hut, purchases a new deep fryer.
		The local driver's license office purchases a new digital camera and printer.
		Jake buys an iPhone.

QUESTION 12

1. The world population is approximately ________ people.

		2 trillion
		680 million
		6.8 billion
		6.8 million

QUESTION 13

1. Computers and insurance coverage produced in the United States and sold to people in other nations are categorized as

		U.S. exports of goods and services.
		U.S. government goods and services.
		foreign capital goods.
		U.S. consumer goods and services.

QUESTION 14

1. Of the following, the federal government obtains most revenue from

		corporate income taxes.
		excise taxes.
		sales taxes.
		social security taxes.

QUESTION 15

1. Items bought by businesses to help produce other goods and services are called

		capital goods.
		government goods and services.
		consumption of goods and services.
		exports of goods and services.

QUESTION 16

1. The majority of the income earned in the United States is paid in

		profit.
		interest.
		rent.
		wages.

QUESTION 17

1. Dan missed class the day the professor covered the circular flow model. Dan asked his friend Joan to explain markets to him. Joan correctly stated that a market

		must include a written contract between buyers and sellers.
		requires a physical location for buyers and sellers to get together.
		is only a place to purchase groceries.
		is an arrangement that brings buyers and sellers together.

QUESTION 18

1. The United States possesses a large amount of human capital. As a result of this fact, in the United States, there is a

		highly skilled and educated labor force.
		a large number of kind and generous humans.
		a large number of people and a great deal of land.
		a large amount of machinery and equipment.

QUESTION 19

1. Which of the following correctly lists the categories of factors of production?

		labor, machines, buildings, capital, and entrepreneurship
		land, buildings, capital, and entrepreneurship
		land, labor, capital, and entrepreneurship
		forests, fish, buildings, capital, and entrepreneurship

QUESTION 20

1. Which of the following correctly lists the categories of factors of production?

		capital, money, and labor
		hardware, software, land, and money
		land, labor, capital, and entrepreneurship
		machines, buildings, land, and money

QUESTION 21

1. In the United States, the poorest 20 percent of households receive roughly ________ percent of total income.

		10
		3
		15
		20

QUESTION 22

1. What would be an example of a consumption service?

		Jake buys an iPhone.
		The local driver's license office purchases a new digital camera and printer.
		Antonio, the manager of the local Taco Hut, purchases a new deep fryer.
		Rhianna gets a haircut.

QUESTION 23

1. The total value of capital in the United States is around

		$47 trillion.
		$10 trillion.
		$100 trillion.
		$79 trillion.

QUESTION 24

1. An export good is a good produced

		by foreigners in the United States and purchased by U.S. households.
		in another country and purchased by U.S. residents.
		in the United States and sold to foreigners living in the United States.
		in the United States and sold in other countries.

QUESTION 25

1. ________ paid for the use of land; ________ paid for the services of labor; and ________ paid for the use of capital.

		Interest is; wages are; profit is
		Rent is; wages are; interest is
		Rent is; interest is; wages are
		Mortgages are; interest is; wages are

fuchsiareindeer89

1. Which of the following groups of countries are all advanced economies?

		Hong Kong, Japan, France, and the United Kingdom
		Italy, the United States, China, and Russia
		Singapore, Russia, France, and Chad
		Australia, Brazil, and the United States

QUESTION 2

1. The most people live in ________ economies and the fewest people live in ________ economies.

		developing; emerging market
		advanced; emerging market
		emerging market; developing
		advanced; developing

QUESTION 3

1. Households and firms in the U.S. economy interact with those in the rest of the world in the ________ market and the ________ market.

		goods; financial
		government; goods
		goods; factor
		financial; factor

QUESTION 4

1. As a factor of production, oil reserves are counted as

		labor.
		capital.
		entrepreneurship.
		land.

QUESTION 5

1. ________ the owners of the factors of production, while ________ what amounts of those factors to hire.

		Households are; the government determines
		Firms are; households determine
		The government is; firms determine
		Households are; firms determine

QUESTION 6

1. The emerging market economies are

		the nations that are currently agricultural in nature.
		most of the nations of Western Europe.
		the largest grouping including the nations of China and India.
		in the transition from state-owned production to free markets.

QUESTION 7

1. In the United States, the productive factor that, as a group, receives the largest fraction of the nation's total income was

		consumption of goods and services.
		entrepreneurship.
		capital.
		labor.

QUESTION 8

1. Items bought by individuals to provide personal enjoyment are termed

		personal goods.
		consumption of goods.
		consumption or investment goods.
		standard goods.

QUESTION 9

1. In the advanced economies, ________ of the factories use advanced capital equipment and in the developing economies ________ of the factories use advanced capital equipment

		virtually all; none
		some; some
		virtually all; virtually all
		virtually all; some

QUESTION 10

1. The productive resource that includes all the "gifts of nature" is called

		land.
		labor.
		entrepreneurship.
		capital.

QUESTION 11

1. What would be an example of government good?

		Donald Trump purchases furniture for his office.
		Antonio, the manager of the local Taco Hut, purchases a new deep fryer.
		The local driver's license office purchases a new digital camera and printer.
		Jake buys an iPhone.

QUESTION 12

1. The world population is approximately ________ people.

		2 trillion
		680 million
		6.8 billion
		6.8 million

QUESTION 13

1. Computers and insurance coverage produced in the United States and sold to people in other nations are categorized as

		U.S. exports of goods and services.
		U.S. government goods and services.
		foreign capital goods.
		U.S. consumer goods and services.

QUESTION 14

1. Of the following, the federal government obtains most revenue from

		corporate income taxes.
		excise taxes.
		sales taxes.
		social security taxes.

QUESTION 15

1. Items bought by businesses to help produce other goods and services are called

		capital goods.
		government goods and services.
		consumption of goods and services.
		exports of goods and services.

QUESTION 16

1. The majority of the income earned in the United States is paid in

		profit.
		interest.
		rent.
		wages.

QUESTION 17

1. Dan missed class the day the professor covered the circular flow model. Dan asked his friend Joan to explain markets to him. Joan correctly stated that a market

		must include a written contract between buyers and sellers.
		requires a physical location for buyers and sellers to get together.
		is only a place to purchase groceries.
		is an arrangement that brings buyers and sellers together.

QUESTION 18

1. The United States possesses a large amount of human capital. As a result of this fact, in the United States, there is a

		highly skilled and educated labor force.
		a large number of kind and generous humans.
		a large number of people and a great deal of land.
		a large amount of machinery and equipment.

QUESTION 19

1. Which of the following correctly lists the categories of factors of production?

		labor, machines, buildings, capital, and entrepreneurship
		land, buildings, capital, and entrepreneurship
		land, labor, capital, and entrepreneurship
		forests, fish, buildings, capital, and entrepreneurship

QUESTION 20

1. Which of the following correctly lists the categories of factors of production?

		capital, money, and labor
		hardware, software, land, and money
		land, labor, capital, and entrepreneurship
		machines, buildings, land, and money

QUESTION 21

1. In the United States, the poorest 20 percent of households receive roughly ________ percent of total income.

		10
		3
		15
		20

QUESTION 22

1. What would be an example of a consumption service?

		Jake buys an iPhone.
		The local driver's license office purchases a new digital camera and printer.
		Antonio, the manager of the local Taco Hut, purchases a new deep fryer.
		Rhianna gets a haircut.

QUESTION 23

1. The total value of capital in the United States is around

		$47 trillion.
		$10 trillion.
		$100 trillion.
		$79 trillion.

QUESTION 24

1. An export good is a good produced

		by foreigners in the United States and purchased by U.S. households.
		in another country and purchased by U.S. residents.
		in the United States and sold to foreigners living in the United States.
		in the United States and sold in other countries.

QUESTION 25

1. ________ paid for the use of land; ________ paid for the services of labor; and ________ paid for the use of capital.

		Interest is; wages are; profit is
		Rent is; wages are; interest is
		Rent is; interest is; wages are
		Mortgages are; interest is; wages are

ivorybear711

2. Which one of the following statements does not indicate an important difference between traditional economics and ecological economics?

Ecological economics places greater emphasis on the importance of energy resources

Ecological economics places greater emphasis on the carrying capacity of the environment

Ecological economics places greater emphasis on the scale of economic activity

Ecological economics places greater emphasis on the importance of natural laws

Ecological economics places greater emphasis on the flow of goods between households and firms

3. The ability of the environment to absorb and render harmless the by-products of human activity is called ...

Carrying capacity

The sink function

Depletion

Throughput

The source function

4. Which of the following is an example of the source function of the environment?

Trees absorb some of the carbon dioxide emitted by human activity

Wetlands reduce the pollution levels in water

Winds carry air pollution away from a city

Humans harvest fish from the oceans

Bacteria break down discarded wastes

5. Which one of the following relationships is not included in the standard circular flow model?

The flow of goods and services from firms to households

The flow of labor from households to firms

The flow of pollution from firms to households

The flow of money from households to firms

The flow of wages from firms to households

6. What statement below best describes how the environment is incorporated into the standard circular flow model?

The long-term availability of natural resources is considered

The pollution generated by firms and households is considered

The input of solar energy is considered

Natural resources are considered as inputs into the production process

The build-up of waste heat is considered

7. What is the primary external input into the broader ecological circular flow model?

Pollution

Solar energy

Fossil fuels

Geophysical cycles

Factors of production

8. What is the only net output of the broader ecological circular flow model?

Goods and services

Solar energy

Factors of production

Geophysical cycles

Waste heat

9. What is the standard economic technique used to compare present and future benefits and

costs?

Property rights

Microeconomics

Externalities

Macroeconomics

Discounting

10. Human activity is producing changes in which cycle that may lead to significant changes in the global climate?

Carbon cycle

Nitrogen cycle

Water cycle

Phosphorus cycle

Organic cycle

11. The Malthusian hypothesis ...

Has proven to be remarkably accurate

Is irrelevant for studying modern environmental problems

Has continuing implications for the debate on current environmental issues

Applies only to developing countries

Applies only to developed countries

12. What is the key to escaping the Malthusian trap?

Increasing productivity per capita

Increasing population

Increasing natural capital

Increasing population density

Definition of property rights

13. Real GNP per capita is defined as ...

GNP divided by population

GNP adjusted for inflation

GNP adjusted for capital depletion divided by population

GNP adjusted for inflation divided by population

GNP adjusted for depreciation divided by population

14. What two factors do standard economics consider as the most important in explaining productivity increases?

Increasing energy supplies and technological progress

Increasing capital stock and technological progress

Increasing energy supplies and increasing natural resources

Increasing capital stock and increasing energy supplies

Increasing capital stock and increasing natural resources

15. Which one of the following statements about sustainable development is false?

Sustainable development requires all energy to be derived from solar energy

Sustainable development considers the scale of the macro-economy

Sustainable development requires a population level below carrying capacity

Sustainable development combines modern and traditional agricultural techniques

Sustainable development requires some type of population policy

16. Which one of the following statements about sustainable development is false?

Some people have complained that sustainable development is a term devoid of specific content

Some people consider sustainable development just a slightly modified form of traditional economic growth

Sustainable development should provide for human needs without undermining the global ecosystem

Sustainable development would redefine economic goals

Sustainable development will require increased resource consumption

17. Which one of the following is an example of demand-side management?

Building a new nuclear power plant

Increasing oil exploration in the Arctic

Building a new solar energy plant

Replacing incandescent with compact fluorescent light bulbs

Increasing reliance on domestic oil sources rather than imports

18. The standard economic approach to pollution control

aquamarinegoose75

ECO101H1 Lecture Notes - Lecture 1: Resource Allocation, Opportunity Cost, Human Capital

ECO101H1 Lecture Notes - Lecture 1: Resource Allocation, Opportunity Cost, Human Capital

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