Question 1

A positive statement is

Accepted Answer

A positive statement describes what is currently believed about how the world operates. It does not express opinions or judgments about what should or should not be.

Question 2

You have the choice to go skiing during spring break, staying at the university to study, or spending the week visiting your family.If you decide to go skiing, the opportunity cost of the holiday is

Accepted Answer

The best choice is to spend the week skiing because it provides a valuable experience and allows for relaxation and enjoyment. The opportunity cost would be either staying at the university to study or spending the week visiting your family, depending on what you would have done otherwise. Therefore, the choice to go skiing is the best option.

Question 3

A positive statement is

Accepted Answer

The answer of A positive statement is
...

Question 4

You have the choice of going on vacation to Florida for one week, staying at work for the week, or spending the week doing fix-up projects around your house.If you decide to go to Florida, the opportunity cost of the trip is

Accepted Answer

The answer of You have the choice of going on...

Question 5

Statements about "what ought to be" are called

Accepted Answer

Normative statements express value judgments or opinions about what ought to be, while positive statements describe the world as it is. Economic statements can be either positive or normative, depending on whether they are making a factual claim or a normative claim about the economy. Scientific statements are statements that can be empirically tested and verified. Hypotheses are specific, testable predictions about the relationship between variables.

Question 6

Statements about "what is" are called

Accepted Answer

Statements about "what is" are descriptive and factual, without expressing any value judgments or opinions. Therefore, they are referred to as positive statements. Normative statements, on the other hand, express value judgments or opinions about "what ought to be." Economic statements specifically relate to the study of the allocation of scarce resources. Scientific statements are objective assertions that can be tested through scientific experiments or observations. Hypotheses are tentative explanations for observations or phenomena, subject to further testing and refinement.

Question 7

Which of the following is an example of a positive statement?

Accepted Answer

Positive statements are based on factual claims about how the world actually works, rather than how it should work. Option B, "Increasing the minimum wage results in more unemployment," is a positive statement because it makes a factual claim about the consequences of increasing the minimum wage.

Question 8

Laura is a manager for HP.When Laura must decide whether to produce a few additional printers, she is choosing at the margin when she compares

Accepted Answer

Laura is choosing at the margin because she is considering the extra revenue that will be generated from selling a few additional printers and comparing it to the extra costs of producing those printers. This allows her to make an informed decision about whether producing those additional printers will be profitable for the company. Option A is not about choosing at the margin, as it considers the total revenue and total cost, not the extra revenue and extra cost. Options D and E are not relevant to Laura's decision as it only considers revenue and cost of production for HP printers, not competing brands. Option C is incorrect as she is concerned with the marginal cost, not the average cost.

Question 9

"The rich should face higher income tax rates than the poor." This is an example of

Accepted Answer

This statement expresses a value judgement on what should be the case, rather than describing what actually is the case (which would be a positive statement). Therefore, it is a normative statement.

Question 10

Chanel has the option of purchasing one of three products: Brand A, Brand B, or Brand C.The price of each product is $10.If Chanel decides to purchase Brand A, the opportunity cost of this decision is

Accepted Answer

The opportunity cost of choosing Brand A is the value of the next-best alternative forgone, which in this case would be either Brand B or Brand C, depending on which one Chanel considers to be the highest-valued alternative. Therefore, the best choice for Chanel would be to evaluate her preferences and choose either Brand B or Brand C, whichever she values most, in order to minimize the opportunity cost of her decision.

Question 11

Which of the following creates an incentive to increase the amount of an activity?

Accepted Answer

A decrease in the marginal cost of an activity and an increase in the marginal benefit from the activity both create an incentive to increase the amount of the activity. This is because the cost of doing the activity is lower and the benefits from doing the activity are higher. As a result, individuals are more likely to engage in the activity and increase the amount of it they do.

Question 12

Complete the following sentence.Economic models

Accepted Answer

Economic models are simplified representations of the economic world that focus on specific aspects or features of it. They do not include all the details of the economic world, but rather only those that are necessary for the purpose at hand.

Question 13

A university decides to change its late night bus service between the campus and student housing from a fare-based service to a free service. This statement means that the incentive to ride the bus ________ and the opportunity cost of a bus ride ________.The university's decision is a ________ decision.

Accepted Answer

The incentive to ride the bus changes because it is now free instead of having a fare. The opportunity cost of a bus ride decreases because students no longer have to pay for the ride. This is a microeconomic decision because it affects the behavior and decisions of individual students.

Question 14

Which of the following statements is normative?

Accepted Answer

Statement A expresses a normative view by stating what scientists should do or not do. All other statements are descriptive and do not express any value judgments or opinions.

Question 15

A normative statement is

Accepted Answer

Normative statements express value judgments and opinions about what should or ought to be, rather than describing objective facts about what is.

Question 16

The night before a history test, you decide to go to the movies instead of reviewing your notes.You get 60 percent on your test compared with the 75 percent that you normally score.You ________ a tradeoff and the opportunity cost of your evening at the movies was ________.

Accepted Answer

By choosing to go to the movies instead of reviewing notes, the student made a tradeoff between leisure time and studying. The opportunity cost of this decision was a 15 percent decrease in their test score. Therefore, the student faced the consequences of their decision and experienced the opportunity cost.

Question 17

Use the information below to answer the following question.
Fact 1.3.2 Cost of Sochi Winter Olympics
The Russian government spent $6.7 billion on Olympic facilities and $16.7 billion upgrading Sochi area infrastructure. Sponsors spent $27.6 billion on hotels and facilities hoping to turn Sochi into a year-round tourist magnet.
Source: The Washington Post, February 11, 2014
-Refer to Fact 1.3.2.The opportunity cost of the Sochi Olympics was

Accepted Answer

The opportunity cost of the Sochi Olympics is the cost of the best alternative forgone, which in this case is the $51 billion that the Russian government would not have spent had the Olympics not been held in Sochi. This cost includes both the $6.7 billion spent on Olympic facilities and the $16.7 billion spent upgrading Sochi area infrastructure, as well as the $27.6 billion spent by sponsors hoping to turn Sochi into a year-round tourist destination.

Question 18

Before starring as Tony Stark in Iron Man, Robert Downey Jr.had played in 45 movies that had average first-weekend box office revenues of a bit less than $5 million.Iron Man grossed $102 million in its first weekend.The success of Iron Man ________ the opportunity cost of hiring Robert Downey Jr.Movie producers now have ________ incentive to hire Robert Downey Jr.

Accepted Answer

The success of Iron Man increases the opportunity cost of hiring Robert Downey Jr. as he has demonstrated his ability to lead a successful and profitable movie. Thus, movie producers now have more incentive to hire Robert Downey Jr.

Question 19

The scientific purpose of simplifying assumptions in an economic model is to

Accepted Answer

Simplifying assumptions are made to isolate specific features of an economic problem or issue, without including irrelevant details or complexities. This allows for a clearer understanding and analysis of the problem at hand. By abstracting from unnecessary complexities, a model can better represent the key factors and relationships relevant to the specific issue being examined.

Question 20

Use the information below to answer the following question.
Fact 1.3.1 Costs Soar for London Olympics
The regeneration of East London, the site of the 2012 Olympic Games, is set to add extra £1.5 billion to taxpayers' bill.
Source: The Times, London, July 6, 2006
-Refer to Fact 1.3.1.The cost of regenerating East London ________ an opportunity cost of hosting the 2012 Olympic Games ________.

Accepted Answer

The cost of regenerating East London is considered an opportunity cost of hosting the 2012 Olympic Games if the regeneration would not have occurred without the event, implying resources were allocated specifically for the Olympics that could have been used elsewhere.

Quiz 1: What Is Economics

A positive statement is

You have the choice to go skiing during spring break, staying at the university to study, or spending the week visiting your family.If you decide to go skiing, the opportunity cost of the holiday is

A positive statement is

You have the choice of going on vacation to Florida for one week, staying at work for the week, or spending the week doing fix-up projects around your house.If you decide to go to Florida, the opportunity cost of the trip is

Statements about "what ought to be" are called

Statements about "what is" are called

Which of the following is an example of a positive statement?

Laura is a manager for HP.When Laura must decide whether to produce a few additional printers, she is choosing at the margin when she compares

"The rich should face higher income tax rates than the poor." This is an example of

Chanel has the option of purchasing one of three products: Brand A, Brand B, or Brand C.The price of each product is $10.If Chanel decides to purchase Brand A, the opportunity cost of this decision is

Which of the following creates an incentive to increase the amount of an activity?

Complete the following sentence.Economic models

A university decides to change its late night bus service between the campus and student housing from a fare-based service to a free service. This statement means that the incentive to ride the bus and the opportunity cost of a bus ride .The university's decision is a decision.

Which of the following statements is normative?

A normative statement is

The night before a history test, you decide to go to the movies instead of reviewing your notes.You get 60 percent on your test compared with the 75 percent that you normally score.You a tradeoff and the opportunity cost of your evening at the movies was .

The scientific purpose of simplifying assumptions in an economic model is to