Question 1

Macroeconomics is the study of aggregate variables such as national production and unemployment.

Accepted Answer

Macroeconomics is concerned with the overall performance and behavior of an economy, and the study of aggregate variables such as national production, unemployment rates, and inflation.

Question 2

Rich people don't have to deal with scarcity.

Accepted Answer

While rich people may have more resources and opportunities, they still face scarcity in some areas such as time, health, and relationships. Additionally, some rich people may have acquired their wealth through previous experiences with scarcity and actively work to avoid it in the future.

Question 3

Jerry is studying three nights per week and his grade point average is 3.1. He wants a higher GPA and decides to study an extra night each week. His GPA now rises to 3.5. Had Jerry not decided to study an extra night, he would have spent this night with his friends. What is Jerry's marginal benefit from studying for one additional night a week? What is his marginal cost of increasing the study time by one night per week? Why does Jerry decide to study an extra night?

Accepted Answer

The answer of Jerry is studying three nights per week...

Question 4

Scarcity affects only those who are in need.

Accepted Answer

Scarcity affects not only those in need, but also those who have an abundance of resources. Scarcity creates competition for resources and can lead to higher prices and limited access to goods and services for everyone.

Question 5

Scarcity arises because of opportunity costs.

Accepted Answer

Scarcity arises because resources are limited while human wants are unlimited. Opportunity cost is a consequence of scarcity, representing the next best alternative foregone when a choice is made.

Question 6

What is the difference between a total benefit and a marginal benefit?

Accepted Answer

The answer of What is the difference between a total...

Question 7

What is a normative statement? Give an example.

Accepted Answer

The answer of What is a normative statement? Give an...

Question 8

Explain whether the statement, "There is life on Mars," is a normative or positive statement.

Accepted Answer

The answer of Explain whether the statement, "There is life...

Question 9

Suppose you are working four nights per week at your courses and your grade point average is 3.5. You want a higher grade and decide to study an extra night each week. Your GPA now rises to 3.8. What is your marginal benefit from studying for one additional night a week?

Accepted Answer

The answer of Suppose you are working four nights per...

Question 10

The tools, instruments, machines, and buildings that people use to produce goods and services are called human capital.

Accepted Answer

The tools, instruments, machines, and buildings that people use to produce goods and services are actually physical capital. Human capital refers to the knowledge, skills, and abilities that people possess and use to produce goods and services.

Question 11

In New State, the bottling law requires that people get a refund of five cents when they return an empty bottle or can. Why does the state pay people to return bottles? In your answer, be sure to mention the role played by incentives.

Accepted Answer

The answer of In New State, the bottling law requires...

Question 12

Two economists can agree that raising the minimum wage creates unemployment yet one might argue that raising the minimum wage is a good policy and the other that it is a bad policy. Why can this difference exist? Be sure to use the terms positive and normative in your answer.

Accepted Answer

The answer of Two economists can agree that raising the...

Question 13

What is the difference between positive and normative statements?

Accepted Answer

The answer of What is the difference between positive and...

Question 14

"The difference between positive and normative statements is that a positive statement is always true while a normative statement might or might not be true." True or false? Explain.

Accepted Answer

The difference between positive and normative statements is that a positive statement is about what is, while a normative statement is about what ought to be. A positive statement can be tested against the facts and may be proved to be right or wrong, whereas a normative statement depends on values and cannot be tested.

Question 15

Scarcity applies to both the rich and the poor.

Accepted Answer

Scarcity refers to the fact that resources are limited in relation to the unlimited wants and needs of individuals and society as a whole. This applies to both the rich and the poor, as even the wealthiest individuals and nations have limited resources and face constraints in satisfying their desires and needs.

Question 16

Explain whether the statement, "Hillary Clinton was elected President of the United States in 2008," is a normative or positive statement.

Accepted Answer

The answer of Explain whether the statement, "Hillary Clinton was...

Question 17

What is a positive statement? Give an example.

Accepted Answer

The answer of What is a positive statement? Give an...

Question 18

Explain whether the statement "The government should increase tariffs on Japanese cars to protect the American car industry from competition," is a normative or positive statement.

Accepted Answer

The answer of Explain whether the statement "The government should...

Question 19

Microeconomics is the study of topics such as national production and unemployment.

Accepted Answer

Microeconomics is the study of individual economic units such as households, firms, and markets, and how they interact with one another. National production and unemployment fall under the realm of macroeconomics.

Question 20

If the government raises the tax on cigarettes, what is the effect on people's incentives and choices?

Accepted Answer

The answer of If the government raises the tax on...

Quiz 1: What Is Economics