Question

7. How can cost benefit analysis help explain why people are more likely to overeat at all you can eat buffets than at restaurants where we pay for extra portions? a. At all-you-can-eat buffets, the food always tastes better, so people eat more. b. The marginal cost of additional food is lower at all-you-can-eat buffets since they don't charge for a second helping of food. c. Marginal benefit is always less than marginal cost for food at all-you-can-eat buffet d. All of the choices are correct. 8. Which of the following is scarce? Oil b, gold e all of the above none of the above because they are all natural resources that can be found on the earth 9. All points on the production possibilities curve represent unemployment of labor resources only. underemployment of resources and inefficiency in the use of resources. points that are not possible given current resources and technology full employment and efficient use of resources. 10. All points inside the production possibilities curve represent unemployment and or inefficient use of resources. full employment and high levels of economic growth points that are NOT currently possible given current resources and full employment and efficient use of resources 11. Which of the following is the best definition of economic growth? Massive increases in the money supply coupled with high rates of inflation b. A decrease in home ownership c. An increase in real per capita GDP d An increase in nominal GDP combined with a similar increase in the price level 12. Economic growth is most likely to be enhanced when: there are barriers to establishing legal ownership of land and capital resources b. scarce resources are made available to citizens free of charge c. special interest groups have power to restrict competition and get government assistance when they make mistakes that lead to economic losses d new technologies are developed and utilized to enhance productivity

Answer 1

7) Solution: The marginal cost of additional food is zero at all you-can-eat buffets since they don’t charge extra for a second helping of food

Explanation: A cost-benefit analysis helps to analyze the decisions. The marginal cost of additional food equals zero at when there is no additional charge extra for a second helping of food

　

8) Solution: all of the above

Explanation: The natural resources are scarce

　

9) Solution: full employment and efficient use of resources

Explanation: Full employment on production possibilities frontier would be a point on the PPF

　

10) Solution: unemployment and/or inefficient use of resources

Explanation: Unemployment on a production possibilities frontier would be a point inside the PPF.

　

11) Solution: increase in real per capita gdp

Explanation: Economic growth refers to a rise in either real GDP or real GDP per capita

　

12) Solution: when new technologies are developed and utilized to enhance productivity

Explanation: Innovated technologies lead to an improvement in economic growth