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Exam 1: Limits, Alternatives, and Choices

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Question 41

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A nation can produce two products: tanks and autos. The table below is the nation's production possibilities schedule. The total opportunity cost of one unit(s) of tanks is

A) 100 units of autos.
B) 50 units of autos.
C) 1,000 units of autos.
D) 950 units of autos.

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Question 42

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Although sleeping in on a work day or school day has an opportunity cost, sleeping late on the weekend does not.

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Question 43

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Normative statements are expressions of facts.

A nation's production possibilities curve shows the maximum combinations of resources that a nation can use.

In the graph for the linear equation S = 15 − 5T, with T on the horizontal axis, the vertical intercept of the graph is −5.

Normative statements are concerned primarily with

In drawing a particular budget line, money income and the prices of the two products are fixed.

Another way of saying " ceteris paribus" is

Assume that a consumer purchases only two products and there is a decrease in the consumer's income. The prices of the two products stay constant. The decrease in income will result in

The role of an assumption in an economic theory is to

The present choice of position on the production possibilities curve will not influence the future location of the curve.

Rosa works at a gelato shop and observes that the number of people buying gelato varies greatly from day to day. For a couple of weeks, she has recorded the number of people at the shop each day, as well as the daily temperature, and has observed a positive relationship between temperature and the number of customers. Based on her observations, Rosa should

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities schedule. The marginal opportunity cost of the fifth unit of tanks is

The process by which capital goods are accumulated is known as investment.

Rational individuals may make different choices because their preferences and circumstances differ.

If A is the dependent variable and B is the independent variable, then a change in A results in a change in B.

A linear relationship only refers to one whose graph is either vertical or horizontal.

Macroeconomics explains the behavior of individual households and business firms; microeconomics is concerned with the behavior of aggregates or the economy as a whole.

If economic resources were perfectly adaptable to alternative uses, then there would be constant opportunity costs along the production possibilities curve.

The study of global businesses such as Apple Inc is one major focus of macroeconomic analysis.