Question 1

Figure 2.3
-In Figure 2.3,the movement from production possibility curve XV to production possibility curve YZ could be caused by
A) decreased unemployment.
B) more land, labor, or capital.
C) a decline in technology.
D) all of the above

Accepted Answer

The movement from production possibility curve XV to production possibility curve YZ suggests an increase in the economy's capacity to produce goods and services. This could be caused by an increase in the availability of resources such as land, labor, or capital. Option A, decreased unemployment, could be a contributing factor to the increase in available labor. Option C, a decline in technology, would result in a shift of the production possibility curve inward, not outward, so it is not a plausible explanation for the shift depicted in Figure 2.3. Therefore, the best choice is B, more land, labor, or capital.

Question 2

Figure 2.3
-In Figure 2.3,the movement from production possibility curve YZ to production possibility curve XV could be caused by
A) increased unemployment.
B) more land, labor or capital.
C) a decline in technology.
D) all of the above

Accepted Answer

The answer of  
Figure 2.3
-In Figure 2.3,the movement from...

Question 3

Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s).
-Using figures from the Application,the opportunity cost of running your business
A) should only include the opportunity cost of the invested capital.
B) should include your invested capital.
C) should not include the invested capital.
D) should only include the opportunity cost of your time.

Accepted Answer

The answer of Recall the Application about running a lawn-cutting...

Question 4

Table 2.1
-A group of people has formed a house cleaning and yard maintenance business.The number of houses or yards that they can clean or maintain in any given day is depicted in Table 2.1.As the group cleans more houses,the opportunity cost of cleaning houses
A) falls.
B) rises.
C) stays the same.
D) is the sum of the opportunity costs of cleaning all the houses prior to that one.

Accepted Answer

The opportunity cost of cleaning houses rises as the group cleans more houses. This is because as they clean more houses, they are sacrificing the opportunity to do other things, such as taking on additional jobs or spending time on personal pursuits. The opportunity cost becomes higher as the group reaches the limits of their time and resources.

Question 5

Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s).
-According to the Application,the opportunity cost of your invested capital is
A) the interest you could get if you invested in a savings account.
B) zero.
C) the revenue you could get once the capital is used.
D) the sum of the value of all your equipment.

Accepted Answer

The application states that the opportunity cost of your invested capital is the interest you could earn if you invested in a savings account. This means that by investing in your lawn-cutting business, you are giving up the potential interest income that you could have earned if you had instead chosen to keep your money in a savings account or other investment vehicle.

Question 6

The opportunity cost of getting a Master's degree in engineering equals the tuition plus the cost of books.

Accepted Answer

The opportunity cost of getting a Master's degree in engineering includes not only the tuition and cost of books, but also the income that could have been earned during the time spent in school and any other alternative uses of that time and money.

Question 7

Figure 2.3
-In Figure 2.3,point A
A) implies unemployment of some resources.
B) is the optimum.
C) cannot be produced.
D) all of the above

Accepted Answer

Point A implies unemployment of some resources because it typically represents a point inside the production possibility frontier, indicating that not all resources are being used efficiently.

Question 8

An increase in the benefit from undertaking an activity will result in an increase in the opportunity cost of that activity.

Accepted Answer

An increase in the benefit from undertaking an activity actually decreases the opportunity cost, as opportunity cost is the value of the next best alternative foregone, not the value of the activity itself.

Question 9

Figure 2.3
-In Figure 2.3,an efficient production point on production possibility curve XV is
A) point A.
B) point B.
C) point C.
D) none of the above

Accepted Answer

The answer of  
Figure 2.3
-In Figure 2.3,an efficient production...

Question 10

Figure 2.3
-In Figure 2.3,point B
A) implies unemployment of some resources.
B) is the optimum.
C) cannot be produced.
D) all of the above.

Accepted Answer

The answer of  
Figure 2.3
-In Figure 2.3,point B
A) implies...

Question 11

Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s).
-Using figures from the Application,$5,000 (which is the market value of all your equipment)is the
A) invested capital.
B) opportunity cost of the invested capital.
C) the opportunity cost of running the business.
D) opportunity cost of your time.

Accepted Answer

The $5,000, representing the market value of all the equipment used in the lawn-cutting business, is considered the invested capital. This is the amount of money put into the business to purchase the necessary equipment for operations.

Question 12

The opportunity cost of going to a particular college is not the same for everyone.

Accepted Answer

The opportunity cost of going to a particular college can vary depending on individual factors such as location, cost, program offerings, and potential career outcomes. Factors such as family obligations, job opportunities, and personal preferences can also affect the opportunity cost of attending a particular college. Therefore, the opportunity cost is not the same for everyone.

Question 13

Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s).
-According to the Application,if the interest rate rises,then the opportunity costs of running a business
A) rises.
B) falls.
C) is unchanged.
D) cannot be determined with the information given.

Accepted Answer

If the interest rate rises, borrowing money becomes more expensive, and the cost of capital increases. As a result, the opportunity cost of running a business also increases, as the business has to spend more money on financing costs rather than investing it in other profitable uses.

Question 14

In order to go to college,James incurs an opportunity cost even though all he gave up was a full time job as a clerk at Wally World.

Accepted Answer

Opportunity cost refers to the benefits foregone by choosing one alternative over another. In this case, James gave up a full-time job as a clerk at Wally World to go to college, which means he forewent the salary and benefits he would have earned from that job. Therefore, he incurs an opportunity cost by going to college.

Question 15

Opportunity cost is the difference between the benefit and cost of some action.

Accepted Answer

Opportunity cost refers to the value of the next best alternative that is forgone as a result of making a decision; it is not simply the difference between the benefit and cost of the chosen action.

Question 16

A principle is a self-evident truth that most people readily understand and accept.

Accepted Answer

A principle is a universally accepted truth that doesn't require proof or explanation. It is generally accepted by society as common knowledge.

Question 17

Figure 2.3
-In Figure 2.3,an efficient production point on production possibility curve YZ is
A) point A.
B) point B.
C) point C.
D) none of the above

Accepted Answer

The answer of  
Figure 2.3
-In Figure 2.3,an efficient production...

Question 18

Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s).
-According to the Application,the opportunity cost of your time should be ________ the opportunity cost of your invested funds.
A) added to
B) subtracted from
C) multiplied with
D) divided by

Accepted Answer

The opportunity cost of your time should be added to the opportunity cost of your invested funds to get a comprehensive understanding of the total opportunity cost involved in running the business. This approach ensures that both the value of the time spent and the financial resources invested are accounted for in assessing the overall cost of the business operation.

Question 19

An increase in the wages received by lawyers in general will result in an increase in the opportunity cost of law school.

Accepted Answer

The answer of An increase in the wages received by...

Question 20

Table 2.1
-A group of people has formed a house cleaning and yard maintenance business.The number of houses or yards that they can clean or maintain in any given day is depicted in Table 2.1.As the group cleans more houses,the opportunity cost of doing yard work
A) falls.
B) rises.
C) stays the same.
D) becomes equal to the opportunity cost of cleaning houses.

Accepted Answer

According to the given information, as the group cleans more houses, the opportunity cost of doing yard work rises. Therefore, the best choice is B, which indicates that the opportunity cost of doing yard work increases as the group cleans more houses.

Quiz 2: The Key Principles of Economics

Figure 2.3 -In Figure 2.3,the movement from production possibility curve XV to production possibility curve YZ could be caused by

Figure 2.3 -In Figure 2.3,the movement from production possibility curve YZ to production possibility curve XV could be caused by

Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s) . -Using figures from the Application,the opportunity cost of running your business

Table 2.1 -A group of people has formed a house cleaning and yard maintenance business.The number of houses or yards that they can clean or maintain in any given day is depicted in Table 2.1.As the group cleans more houses,the opportunity cost of cleaning houses

Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s) . -According to the Application,the opportunity cost of your invested capital is

The opportunity cost of getting a Master's degree in engineering equals the tuition plus the cost of books.

Figure 2.3 -In Figure 2.3,point A

An increase in the benefit from undertaking an activity will result in an increase in the opportunity cost of that activity.

Figure 2.3 -In Figure 2.3,an efficient production point on production possibility curve XV is

Figure 2.3 -In Figure 2.3,point B

Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s) . -Using figures from the Application,$5,000 (which is the market value of all your equipment) is the

The opportunity cost of going to a particular college is not the same for everyone.

Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s) . -According to the Application,if the interest rate rises,then the opportunity costs of running a business

In order to go to college,James incurs an opportunity cost even though all he gave up was a full time job as a clerk at Wally World.

Opportunity cost is the difference between the benefit and cost of some action.

A principle is a self-evident truth that most people readily understand and accept.

Figure 2.3 -In Figure 2.3,an efficient production point on production possibility curve YZ is

Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s) . -According to the Application,the opportunity cost of your time should be ________ the opportunity cost of your invested funds.

An increase in the wages received by lawyers in general will result in an increase in the opportunity cost of law school.

Table 2.1 -A group of people has formed a house cleaning and yard maintenance business.The number of houses or yards that they can clean or maintain in any given day is depicted in Table 2.1.As the group cleans more houses,the opportunity cost of doing yard work