Question

Which of the following events will NOT shift the Production Possibilities for the USA outwards?

Select one:

a. Kansas builds a new 8,000-Megawatt wind energy farm

b. 5 million people from Central American legally immigrate to California to work there

c. Florida makes it illegal for people to use Uber or Lyft.

d. New Jersey decides to provide free college for its residents.

e. Nebraska develops genetically modified corn that can grow twice is fast and resist pests

Which category of resources is likely to increase if Congress passes a law that people cannot collect retirement benefits until the age of 70?

Select one:

a. Renewable Natural Resources

b. Human Capital

c. Labor

d. Physical Capital

e. Non-renewable Natural Resources

Which of the following BEST illustrates the tenant that people make decisions on the margin?

Select one:

a. Ashanti decides to play Minecraft because all of her friends are playing it

b. Cam decides to purchase an electric car when the price of gasoline rises above $4 per gallon

c. Kemba decides to stop using plastic bottles when he learns that many of them end up in the ocean and can harm marine life

d. Alejandro decides to practice tennis for 20 additional minutes each week because he is preparing for a tournament

e. Gisella decides to go on a trip to Europe after she gets a promotion at work

Which of the following resources is a renewable natural resource?

Select one:

a. A Ph.D. in History

b. Soil

c. A Wood Cabinet

d. Natural Gas

e. Platinum

Deshaun decides to complete his last year of college Clemson and get his bachelor degree instead of going to the NFL draft where he would be drafted as a quarterback. What is Deshaun's opportunity cost of staying in Clemson?

Select one:

a. There is no opportunity cost since Deshaun can always play in the NFL a year later

b. The money and experienced he would have gained in the NFL

c. The tuition and cost of books at Clemson

d. The additional money that he could make with a degree in communication

e. The cost of his uniform, housing, training and other expenses that Clemson invests in Deshaun

Staci decides to stop smoking when New York City increases the tax on cigarettes to $5.85 5 per package. This BEST illustrates that:

Select one:

a. People make decisions on the margin

b. People respond to incentives

c. Preferences are subjective

d. People are irrational

e. People live under scarcity

Which of these topics is most likely to be included in a Microeconomics course (check all that apply)?

Select one or more:

a. Why consumer are shifting to purchasing items online

b. The effect of a federal government stimulus check

c. The effect of the COVID-19 pandemic on the global economy

d. The decision of Myrtle Beach to increase its sales taxes

e. The amount of US dollars in circulation

Ceteris paribus, (meaning, assuming that all other things remain constant) which of these events is likely to lower the equilibrium price of digital cameras?

Select one:

a. Cell phone become less expensive and with a better cameras

b. The cost of producing camera increases because of a rise in the cost of raw material

c. Income in the economy increases due to an economic expansion

d. The number of camera producers like Cannon decreases

e. A new study that shows that cell phone is likely to cause brain cancer

Which one of these individuals lives under relative scarcity? Check all that apply.

Select one or more:

a. Maria lives in Zurich, Switzerland. She is wealthy and feels like she has everything that she wants

b. Omkar lives in North India. He abandoned all material possession to live a simple life in a Hindu temple

c. Adeola lives in Abuja, Nigeria. She has no access to clean water or a safe home for her family.

d. Abdul lives in a palace in Dubai. He has a fleet of luxury cars, a private jet, and numerous possessions, but always want more

e. Karin lives in a small apartment Boston. She works 60 hours a week and does not have money to buy a car that she wants, but she had food, clothes, and some basic possessions

Which of the following is the BEST example of an income effect?

Select one:

a. Brian stops going to the movies at the theater when the price of movie tickets rises and starts watching more Hulu instead

b. Ricardo starts purchasing expensive suits after he gets a promotion and raise at work

c. General Mill produces less cereal when the price of oat, wheat and other grains increase

d. More visitors come to Myrtle Beach in the summer because the weather is warm and they have more vacation time

e. Rochelle decides to go out less after her rent increases

Answer 1

1. c. Florida makes it illegal for people to use Uber or Lyft

A production possibiltiy frontier shifts outwards only when there is increase in resources or advancement in state of technology.

2. c. Labor

If Congress passes a law that people cannot collect retirement benefits until the age of 70 then labor will increase since everybody is likely to work until they are 70.

3. d. Alejandro decides to practice tennis for 20 additional minutes each week because he is preparing for a tournament

This is an example of decision making at the margin. All other options are absolute decisions and do not include the element of 'additional' units.

4. c. A Wood Cabinet

Since wood is growable it is considered a renewable natural resource. Natural gas, soil and platinum are non renewable natural resources.

5. b. The money and experienced he would have gained in the NFL

Opportunity cost is the cost of next best alternative foregone.

6. a. People make decisions on the margin

7. a. Why consumer are shifting to purchasing items online ; d. The decision of Myrtle Beach to increase its sales taxes

Microeroeconomics studies the behavior of individuals and firms in making decisions, that is, it deals with micro units of the economy. All other options are examples of macroeconomics.

8. a. Cell phone become less expensive and with a better cameras

If a cell phones less expensive and upgrades its camera quality then people will start substitiuting digital cameras with cell phones. Thus the demand for cell phones will shift leftward and at the new intersection of supply and demand the equilibrium price of cell phones will decrease.

9. c. Adeola lives in Abuja, Nigeria. She has no access to clean water or a safe home for her family

10. b. Ricardo starts purchasing expensive suits after he gets a promotion and raise at work

This is an example of income effect since as his income increases his consumption also increases.