ECO 2013 Lecture 2: The Economic Problem

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oliveskunk540

5 Oct 2016

School

University of Florida

Department

Economics

Course

ECO 2013

Professor

Knight David

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Document Summary

Economics: a social science that studies the allocation of society"s scarce resources. Scarcity: our unlimited amount of wants will never be fulfilled because there are only limited resources. Weighing the costs and benefits of decisions. Microeconomists study the decisions of individuals and companies (firms) Macroeconomics studies how all the decisions of individuals and companies come together in different markets to make the economy. Definition: a graphical representation of society"s ability or inability to produce different goods and services. Only works with 2 generalized goods at a time. One good cannot produce any more goods than what is in the table without decreasing production of the other good. Ppf (line on the graph): a curve that includes all feasible and productively efficient combinations of 2 goods/services that a society/individual can produce. Assuming society is using all of its resources efficiently. Points under the ppf show resources being used inefficiently. We can make more goods without losing resources!!

Related Questions

1/ All the problems studied in economics arise from

a. the unequal distribution of income

b. the scarcity of resources

c. inappropriate government action

d. overpopulation

e. war

2/ The overall performance of the economic system as a whole is the focus of

a. macroeconomics

b. public economics

c. international finance

d. labor economics

e. microeconomics

3/ After graduating from high school, Steve had the following three choices for his immediate future, listed in order of preference: (1) attend our campus, (2) work in a printed circuit board factory, or (3) attend a rival college. His opportunity cost of going to college here includes which of the following?

a. The income he could have earned at the printed circuit board factory plus the direct cost of attending college here (tuition, textbooks, etc.)

b. The benefits he could have received from going to the rival college.

c. Only the tuition and fees paid for taking classes here.

d. Cannot be determined from the information given.

e. The cost of books and supplies at the rival college.

4/ The question of scarce resources and unlimited wants are addressed in

a. psychology

b. history

c. anthropology

d. political science

e. economics

5/ Consider an economic model designed to analyze the purchasing decisions of households. An assumption that a household chooses between only two goods would be an example of an

a. positive assumption

b. simplifying assumption

c. macroeconomic assumption

d. financial assumption

e. critical assumption

6/ Which of the following explains why economists may disagree over normative issues?

a. They have different beliefs and values.

b. They often employ different statistical techniques when examining data.

c. Some work only on microeconomic issues, while others focus exclusively on macroeconomic issues.

d. They examine the same data to draw their conclusions.

e. They need to disagree to publish their research findings.

7/ Suppose your friends take you out for dinner on your birthday, and you have a much better time than you would have had to do anything else. There is still an opportunity cost, even though they will not let you pay for anything. True/False

8/ Microeconomics

a. addresses scarcity from a global perspective

b. is purely theoretical and has little value in explaining real-world phenomena

c. focuses on what is happening in the economy as a whole

d. examines how individuals, households, and firms make economic decisions

e. answers the fundamental economic questions of how, when, where, and why.

9/ People and organizations have to make choices about how to allocate time and money because

a. religious values conflict with economics

b. time and money are both scarce

c. government require it

d. there are unlimited resources

e. corporations control our lives

10/ The objective of an economic model is to

a. yield a better understanding of important relationships

b. use simplifying assumptions to make positive economic statements

c. be an accurate description of reality

d. predict real-world occurrences with complete accuracy

e. use basic principles of economics to derive fundamental assumptions about human behavior.

jaderaven304

Attending college can be viewed as a form of
investment in which costs are borne today and benefits are receivedin the future
investment in which benefits are received today and costs are bornein the future
consumption, because learning is an enjoyable activity
leisure, because learning is an enjoyable activity

2. A medium of exchange must be called:
approved by the government
socially acceptable in exchange for goods and services
easy to reproduce
used to eliminate specialization and the division of labor

3. Society's production possibilities frontier
helps explain the immense complexity of the real economy
demonstrates that, although resources are scarce for individuals,there is no problem of scarcity for society as a whole
is based on unrealistic assumptions and therefore has no value asan economic tool
is based on simplifying assumptions, but is still useful forillustrating scarcity, opportunity cost, and economic growth

4. On a production possibilities frontier, the opportunity cost ofone more unit of a commodity per time period is measured bythe
monetary price of the commodity
amount of the other commodity that must be sacrificed
amount of unemployed resources that must be used
amount of satisfaction it gives consumers

5. Pure capitalism and a pure command system represent
two different ways of answering the basic economic questions
two names describing the same method of answering the basiceconomic questions
the only two ways of answering the basic economic questions
the most efficient ways to answer the basic economicquestions

6. In what way is consumer demand different from consumerwants?
Demand is only for necessities.
Demand is only for luxuries.
Demand takes into account the ability to pay.
Consumer wants are only for luxuries.

7. In the case of a normal good, an increase in consumers' incomeswould shift the (Points : 1)
supply and demand curves inward
demand curve inward
demand curve outward
supply curve inward

8. Larger quantities of any good will be supplied at higher pricesbecause
consumers will be more satisfied
higher prices attract resources from other uses
people are naturally lazy and have to be bribed to give up theirleisure
price and quantity supplied are inversely related

9. If there is a shortage in the market for athletic shoes,
the price should rise to eliminate the shortage
inventories of athletic shoes will grow
demand will decrease to restore equilibrium
firms will reduce production to restore equilibrium

10. Which of the following is correct when a price is set below amarket's equilibrium price? (Points : 1)
quantity demanded exceeds quantity supplied at the set price
quantity demanded is less than quantity supplied at the setprice
quantity demanded is equal to quantity supplied at the setprice
at the set price there is a surplus

bronzecockroach220

QUESTION 1

Assume there are two basic goods produced in a nation, consumer goods and capital goods. The production possibilities graph for these two goods is bowed out from the origin. This reason for this shape of the graph is because of:

	A.	the other-things-equal assumption.
	B.	the law of increasing opportunity costs.
	C.	diminishing marginal utility.
	D.	present choices and future possibilities.

1 points

QUESTION 2

From an economic perspective, when a student decides to attend another year of college, the student has concluded that the:

	A.	marginal costs of attending college are reduced by the availability of grants and subsidies.
	B.	marginal benefits of attending college have increased because the future is brighter.
	C.	marginal benefits of attending college are greater than the marginal costs.
	D.	marginal costs of attending college have decreased to make college affordable.

1 points

QUESTION 3

A person observes that as consumer prices fall, economic growth increases. The person concludes that fall consumer prices leads to economic growth. This conclusion would be an example of:

	A.	confusing correlation with causation.
	B.	the fallacy of composition.
	C.	trade-offs among economic goals.
	D.	the other-things-equal assumption.

1 points

QUESTION 4

The problem of unlimited wants and limited income is known as

	A.	the scientific method.
	B.	unequal wealth distribution.
	C.	normative economics.
	D.	the economizing problem.

1 points

QUESTION 5

A point outside the production possibilities curve is:

	A.	unattainable without economic growth.
	B.	attainable and the economy is efficient.
	C.	unattainable without inflation.
	D.	attainable, but the economy is inefficient.

1 points

QUESTION 6

Which one of the following would be an example of loaded terminology?

	A.	market forces
	B.	tentative hypothesis
	C.	entrepreneurial functions
	D.	creeping socialism

1 points

QUESTION 7

Suppose there are two economies, Alpha and Beta, both of which have the same production possibilities curves. If Beta devotes more resources to produce investment goods than consumer goods as compared to Alpha, then in the future:

	A.	Alpha will not be able to achieve full employment.
	B.	Beta will not be able to achieve full employment.
	C.	Alpha will experience greater economic growth than Beta.
	D.	Beta will experience greater economic growth than Alpha.

1 points

QUESTION 8

Macroeconomics, as opposed to microeconomics, is concerned with

	A.	individual businesses.
	B.	new computer technology.
	C.	the stock market.
	D.	the economy as a whole.

1 points

QUESTION 9

Which one of the following is an example of a positive economic statement?

	A.	The size of the Federal government should be reduced.
	B.	Midwest states affected by drought should be given more federal disaster aid.
	C.	Education and income are highly correlated.
	D.	The minimum wage for workers should be raised to help low-income workers.

1 points

QUESTION 10

Economics is primarily concerned with

	A.	interactions between the government and market participants.
	B.	how scarce resources are used.
	C.	the production and distribution of capital goods.
	D.	how income is divided among individuals.

1 points

QUESTION 11

The production possibilities table below shows the hypothetical relationship between the production of guns (national defense) and butter (social goods) in an economy.

A B C D E

Guns 0 4 7 9 10

Butter 4 3 2 1 0

If the economy is producing at alternative C, what is the opportunity cost of producing another unit of butter?

	A.	3 units of guns.
	B.	1 units of guns.
	C.	2 units of guns.
	D.	4 units of guns.

1 points

QUESTION 12

Assume that a consumer can buy only two goods X and Y, and has an income of $120. The price of X is $10 and the price of Y is $20. If the consumer spends all of her money on X and Y, which of the following would be a possible combination:

	A.	4X and 2Y
	B.	5X and 3Y
	C.	6X and 3Y
	D.	8X and 1Y

1 points

QUESTION 13

In the production possibilities model of an economy, when there is full employment of resources

		a nation will be operating at an interior point within its production possibilities curve.
		a nation will be operating on the production possibilities curve.
		the production possibilities curve will shift outward to the right.
		the production possibilies curve will shift inward to the left.

1 points

QUESTION 14

In economics the concept that there is "no free lunch" means

	A.	scarce resources were used to produce these "free" goods so there is an opportunity cost to producing them.
	B.	consumers are irrational when they ask for a free lunch unless they can make the case that the free lunch benefits business.
	C.	the marginal cost of the "lunch" is greater than the marginal benefit.
	D.	businesses could not make a profit if they gave away free goods to consumers.

1 points

QUESTION 15

Assume that a consumer can only purchase two goods with her income. A straight-line budget constraint indicates that the opportunity cost of obtaining an additional unit of one good is:

	A.	negative.
	B.	constant.
	C.	increasing.
	D.	decreasing.

carmineferret43

ECO 2013 Lecture 2: The Economic Problem

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