Section 1
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John is considering a purchase of a new Toyota that costs $20,000 at a local dealership. John estimates the annual cost of maintenance, registration, insurance, and gas to be about $1,500. After extensive internet research, John estimates that he can sell his Toyota in three years for $10,000. What is John's estimated cost of owning and driving the car for three years?
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Cards (51)
Section 1
(50 cards)
John is considering a purchase of a new Toyota that costs $20,000 at a local dealership. John estimates the annual cost of maintenance, registration, insurance, and gas to be about $1,500. After extensive internet research, John estimates that he can sell his Toyota in three years for $10,000. What is John's estimated cost of owning and driving the car for three years?
3x$1,500+$20,000-$10,000=$14,500
Trade and specialization are related because:
in order to specialize in one activity the individuals have to be able to trade.
Lena and Jess are roommates. Lena hates to clean the bathroom. Jess will agree to clean the bathroom only if Lena vacuums the living room. This statement best represents this economic concept:
There are gains from trade
Suppose that in an hour Chip can gather 8 pounds of fruit or 4 pounds of nuts. In an hour, Monk can gather 9 pounds of fruit or 3 pounds of nuts. Which of the following choices would benefit both Chip and Monk if trade occurred?
1 pounds of nuts for 2.5 pounds of fruit
Because people tend to exploit gains from trade:
Markets tend to achieve efficiency
An economy is efficient if it is:
not possible to produce more of one good without producing less of another good
True or False: Suppose that in an hour Chip can gather 8 pounds of fruit or 4 pounds of nuts. In an hour, Monk can gather 9 pounds of fruit or 3 pounds of nuts. Monk has the comparative advantage in gathering fruit. This is _____.
True
Sometimes the government varies its spending, depending on the needs of the country. This statement best represents the economic concept that:
government policies can change spending
Ed is taking off from work for 5 hours this afternoon and going to a baseball game. The ticket to the game costs $20 and it costs $15 to park at the stadium. Ed earns $10 an hour at his job. Ed's opportunity cost of going to the ball game is:
$85
True or False: Human capital is money that belongs to individuals rather than businesses. This is _____.
False
If the productive capacity of the economy is greater than the amount that people want to spend on goods and services, the result is:
Unemployment
Ed is taking off from work for 4 hours this afternoon and going to a baseball game. The ticket to the game costs $25 and it costs $15 to park at the stadium. Ed earns $15 an hour at his job. Ed's opportunity cost of going to the ball game is:
$100
The provision of disabled-parking passes to those with disabilities often requires that more than enough spaces be available for those with disabilities. As a result, many of these spaces are vacant quite often when they could be used by able-bodied individuals. Such a situation illustrates the:
trade-off between efficiency and equity
An increase in efficiency means that an economy has:
made more people better off without making others worse off
Highways in some large cities have dedicated high occupancy lanes for vehicles with two or more passengers. These lanes are an attempt to improve _____ of the transportation so that less gasoline is used to transport the same number of people.
Efficiency
Suppose that in an hour Chip can gather 8 pounds of fruit or 4 pounds of nuts. In an hour, Monk can gather 9 pounds of fruit or 3 pounds of nuts. ____ should specialize in gathering fruit.
Monk
_____ is a form of trade in which individuals exchange goods or services directly for other goods and services.
Barter
Incentives to engage in an activity can be increased by either _____ the benefits or _____ the cost of that activity.
Increasing; decreasing
When a factory closes, why does it spell bad news for the local restaurants?
Unemployed factory workers have lower incomes and are less likely to dine out
Which of the following statements is TRUE?
If a market is in equilibrium, there will be no remaining opportunities for individuals to make themselves better off
Abby received requests from three families to babysit a toddler for four hours on Friday night. She can only babysit for one of the three families. The Fleming family offered her $30, the Gilbert family offered her $40, and the Lewis family offered her $60. If Abby chooses to babysit for the Lewis family her opportunity cost of this decision is:
$40
You have $1 to spend on a vending machine snack. A bag of chips will cost you $1 and a candy bar will also cost you $1. If you choose the bag of chips, the opportunity cost of buying the chips is:
the enjoyment you would have received from the candy bar
During economic downturns the number of Americans without jobs increases. According to the principle that one person's spending is another person's income:
the reduction in spending by the unemployed workers will further lower incomes
A computer manufacturer slashed prices of its products following a competitor's move. Most likely the competitor's move involved _____ in prices so that the market moved _____ the equilibrium
A reduction; away from
Scarcity exists when:
individuals can have more of one good but only by giving up something else
According to the principle that one person's spending is another person's income, a decrease in consumer confidence can _____ spending on goods and services and therefore _____ incomes.
Decrease; lower
You are analyzing a trade-off when you compare the _____and _____ of doing something.
costs; benefits
True or False: The end result of individual choices may be different from what one individual intends. This is _____.
True
If every individual were required to be self-sufficient:
living standards would fall
Margo spends $10,000 on one year's college tuition. The opportunity cost of spending one year in college for Margo is:
whatever she would have purchased with the $10,000 plus whatever she would have earned had she not been in college
When individuals act in their own self-interest:
society may be worse off in some cases
When people want more goods and services than are available, the economy undergoes inflation. This statement best represents this economic concept:
Overall spending sometimes gets out of line with the economy's productive capacity
Overall, trade between China and the United States will:
benefit both countries
Suppose that in an hour Chip can gather 8 pounds of fruit or 4 pounds of nuts. In an hour, Monk can gather 9 pounds of fruit or 3 pounds of nuts. The opportunity cost of a pound of fruit for Monk is _____ pound(s) of nuts.
0.33
You decide whether to eat one more slice of pizza based on how hungry you feel. This statement best represents this economic concept:
"How much" is a decision at the margin
After swimming 100 laps at the pool, Erik decides to swim 10 more before lifting weights. This statement best represents this economic concept:
"How much" is a decision at the margin
True or False: If an economy is operating at a point on its production possibilities frontier, it is always efficient in production and allocation. This is _____.
False
If in Equitania, 20% of the population receive 80% of the income and the remaining 80% of the population receive 20% of the income, Equitania's economy:
may be efficient
Macroeconomics developed as a separate branch of economics:
in the 1930s in response to problems of the Great Depression.
True or False: An increase in the amount of money in circulation will increase spending. This is _____.
True
Market failure occurs when:
individual actions have side effects that are not properly taken into account
Corner offices in high-rise office buildings usually cost more to rent than other offices. This best illustrates the economic principle of:
scarce resources
Too little spending in an economy often leads to:
a recession
An economy is efficient when:
all opportunities to make some people better off without making other people worse off have been taken
In order to stimulate spending in the economy, a government can _____ direct spending on things like education and military or _____ the amount of money in the economy.
Increase; increase
Macroeconomics deals with:
the working of the entire economy or large sectors of it
Florida schools offered cash bonuses to students who scored high on the state's standardized exams. The cash bonuses are an example of this economic principle:
People usually take advantage of opportunities to make themselves better off
The federal government regulates how much carbon dioxide a factory can emit. This statement best represents this economic concept:
When markets don't achieve efficiency, government intervention can improve society's welfare
In order to encourage attendance a professor can either _____ benefits from attending class or _____ the cost of missing classes.
Increase; increase
According to the principle that one person's spending is another person's income, an increase in consumer confidence can _____ spending on goods and services and therefore _____ incomes.
Increase; increase
Section 2
(1 card)