Bonus Quiz For Econone - T3 Ay0910

The statement is true because holding onto something due to sentimental value implies that the owner is not willing to sell it regardless of any price offers. This means that the owner values the item more than any potential monetary gain, effectively making them the highest bidder and refusing to sell.

A budget line and a production possibilities frontier both represent limits to the amounts of goods and services that can be obtained given finite resources. This means that there are constraints on the maximum quantities that can be produced or consumed due to limited resources such as time, labor, and capital. The budget line represents the different combinations of goods and services that can be purchased with a given income, while the production possibilities frontier represents the different combinations of goods and services that can be produced with a given set of resources. Both concepts highlight the scarcity of resources and the need to make choices about how to allocate them efficiently.

The law of diminishing marginal returns states that as more units of a variable input (in this case, labor) are added to a fixed input (such as capital), the marginal product of the variable input will eventually decrease. This means that initially, adding more labor will result in an increase in output, but after a certain point, the additional output gained from each additional unit of labor will start to decline. Therefore, the correct answer is that labor's marginal product decreases after a certain point.

The statement "Resources are unlimited in a wealthy society" is false. While a wealthy society may have more access to resources compared to a poorer society, resources are still limited. Even in a wealthy society, there are finite amounts of natural resources, such as land, water, and minerals, which cannot be replenished indefinitely. Additionally, the distribution and allocation of resources within a wealthy society may still be unequal, leading to scarcity for certain individuals or groups. Therefore, the statement is incorrect.

The slope of a line is the coefficient of the x-term in the equation of the line. In this case, the equation of the line is Y = 5x + 10. The coefficient of the x-term is 5, so the slope of the line is 5.

Economic growth may occur when new resources are acquired and better ways of doing things are devised. Acquiring new resources can lead to increased production and expansion of industries, which in turn can contribute to economic growth. Similarly, devising better ways of doing things, such as improving technology or finding more efficient methods, can enhance productivity and drive economic growth. Therefore, both A (new resources) and B (better ways of doing things) can play a role in stimulating economic growth.

In a free market, the basic coordinating mechanism for buying and selling activities is price. Price acts as a signal that helps to allocate resources efficiently. It is determined by the interaction of supply and demand forces in the market. When the demand for a product or service increases, the price tends to rise, signaling producers to increase their supply. Conversely, when demand decreases, the price falls, indicating producers to reduce supply. This price mechanism allows for the efficient allocation of resources based on consumer preferences and helps to balance supply and demand in the market.

In the theory of the firm, "long run" refers to a period of time where the firm has the capability to choose the scale of its operations and adjust its output levels accordingly. This means that in the long run, the firm has the flexibility to change its production capacity, expand or contract its operations, and make adjustments to its output levels based on market conditions and its own strategic decisions. Unlike the short run, where some inputs remain fixed, the long run allows the firm to fully optimize its operations and adapt to changes in the market.

A downward-sloping Income Consumption Curve indicates that as income increases, the quantity consumed of the good decreases. This pattern is typically observed for inferior goods, which are goods for which demand decreases when consumer income rises. Inferior goods are generally of lower quality or less desirable compared to other goods, so as consumers' income increases, they tend to switch to higher-quality or more desirable alternatives. Therefore, the correct answer is an Inferior good.

Every point on the production possibilities frontier represents the maximum possible combination of goods and services that an economy can produce given its resources and technology. These points are considered technically efficient because they reflect the full utilization of available resources and the most efficient production methods. Therefore, the statement that every point on the production possibilities frontier is technically efficient is true.

Elasticity refers to the degree of responsiveness of one variable when another variable changes. It measures the percentage change in one variable in response to a percentage change in another variable. In other words, it quantifies the sensitivity of one variable to changes in another variable. Therefore, elasticity is the correct answer in this context.

The statement is true because diminishing marginal productivity refers to the decrease in the additional output gained from each additional unit of input. If both photographers are able to complete five in-studio shoots a day, it suggests that they are still able to maintain the same level of productivity without a decrease in output. Therefore, diminishing marginal productivity has not yet set in for them.

When two people engage in a trade, it is because they both expect to benefit from the exchange. This implies that both parties believe they will be made better off by the trade. It is unlikely for someone to willingly engage in a trade if they believe they will be worse off as a result. Therefore, the correct answer is that both parties expect to be made better off by the exchange.

A country that devotes more of its resources to capital will most likely see its capability to produce goods and services expand faster than another country focused on consumer goods. This is because capital investment leads to the development of infrastructure, technology, and machinery, which enhances productivity and efficiency in the production process. By prioritizing capital, a country can increase its capacity to produce goods and services, leading to economic growth and development.

Economic outcomes are evaluated based on various criteria such as growth, stability, efficiency, and equity. However, sufficiency is not considered as one of the criteria to judge economic outcomes. Sufficiency refers to having enough resources or income to meet basic needs, whereas the other criteria focus more on the overall performance and fairness of the economy.

Opportunity cost refers to the value of the best alternative that is given up when making a decision. It is the value of the option that is not chosen or pursued. This concept recognizes that when we choose one option, we are sacrificing the benefits or potential gains that could have been obtained from the other alternatives. Therefore, the correct answer is "Is the value of the best alternative foregone."

A price change would have the largest income effect in the case of a car. This is because a car is a high-priced item that typically represents a significant portion of a person's income. Therefore, any change in its price would have a substantial impact on the individual's overall budget and purchasing power. In contrast, goods like magazines, PCs, and T-shirts are generally lower-priced items that would have a relatively smaller income effect when their prices change.

A price ceiling below the equilibrium price will create a shortage because it sets a maximum price that suppliers can charge, which is lower than the market equilibrium price. This means that suppliers are not able to cover their costs and may choose to reduce their quantity supplied or exit the market altogether. At the same time, consumers are incentivized to demand more of the product due to the lower price, leading to an increase in quantity demanded. The result is a situation where the quantity demanded exceeds the quantity supplied, creating a shortage in the market.

The correct answer is "Economic costs include both a normal rate of return on investment and opportunity costs of every input used." Economic costs refer to the total cost of producing a good or service, taking into account not only the direct costs of hiring factors of production but also the opportunity costs of using those resources. This includes the foregone returns from investing in alternative ventures or the next best alternative use of resources. By considering both the normal rate of return on investment and opportunity costs, economic costs provide a more comprehensive measure of the true cost of production.

The cost of food you will consume while being in college is not an opportunity cost of attending college because it is not a sacrifice or trade-off that you are making by choosing to attend college. Opportunity cost refers to the value of the next best alternative that you give up when making a decision. In this case, the tuition you pay, the income you could have earned if you were working instead, and alternative uses of your time are all examples of opportunity costs because they represent the potential benefits or opportunities that you are giving up by choosing to attend college.

The statement is false because in consumer theory, the best affordable bundle of x and y lies on the budget line, not below it. The budget line represents all the combinations of x and y that can be purchased given the consumer's budget constraint. The consumer aims to maximize their utility by choosing the point on the budget line that provides the highest level of satisfaction. Therefore, the best affordable bundle will be on the budget line, not below it.

If economic profit is zero, it means that the firm is earning exactly enough revenue to cover all of its costs, including both explicit (such as wages and rent) and implicit (such as opportunity cost of the owner's time and capital) costs. This indicates that the firm is earning a normal rate of return, which means it is earning a profit that is equal to the opportunity cost of the resources used in production. In other words, the firm is earning a fair return on its investment and is not making above-average profits.

The correct answer is A and B. Economic cost is generally bigger than accounting cost because it includes not only the explicit costs recorded in accounting but also the implicit costs such as opportunity cost. Opportunity cost refers to the value of the next best alternative foregone when making a decision. Therefore, economic cost considers both the explicit and implicit costs, making it larger than accounting cost which only includes the explicit costs.

A convex indifference curve represents preferences between imperfectly substitutable things deemed desirable in greater quantities. This means that as the quantity of one good increases, the individual's preference for the other good also increases. It indicates that the individual is willing to trade off one good for another, but not at a constant rate. The convex shape of the indifference curve implies that the marginal rate of substitution between the two goods is diminishing, meaning that the individual requires more of one good to compensate for a decrease in the other.

In economics, capital refers to things that have been produced and are used to produce other goods. These can include machinery, equipment, buildings, and even money. Capital is an important factor of production and is necessary for economic growth and development. Therefore, the statement that things that have been produced but are used to produce other goods are understood as "capital" in economics is true.

In the long run, supply tends to be more elastic. This means that as time goes on, producers have more flexibility to adjust their production levels in response to changes in demand or input costs. This is because in the long run, producers can make changes to their production processes, invest in new technology, or enter or exit the market. As a result, the quantity supplied can change significantly in response to changes in price or other factors.

The marginal cost refers to the additional cost incurred from consuming one more unit of a product. In this case, since the question states that the sushi restaurant charges a fixed price of Php600 for its "eat all you can" special, regardless of the number of sushi consumed, the marginal cost of the 10th piece of sushi is zero. This is because the cost remains constant, and consuming one more sushi does not result in any additional cost.

Points lying on the same indifference curve represent quantities of two goods that make a person equally happy. Indifference curves represent different combinations of goods that provide the same level of satisfaction or utility to an individual. Therefore, any point on an indifference curve represents a combination of goods that yields the same level of happiness or satisfaction for the person.

The correct answer is "Is the firm's variable cost curve plus any fixed cost." In the short run, a firm's total cost curve is the sum of its variable costs and fixed costs. Variable costs are costs that change with the level of production, such as labor and raw materials. Fixed costs, on the other hand, are costs that do not change with the level of production, such as rent and insurance. Therefore, the short run total cost curve includes both variable costs and fixed costs.

A price ceiling is a maximum limit set by the government on the price that can be charged for a particular good or service. When a price ceiling is imposed, it restricts the price from rising above a certain level. This can lead to a shortage because if the maximum price is set below the equilibrium price, suppliers may not find it profitable to produce and sell the goods or services. As a result, the quantity supplied will be lower than the quantity demanded, leading to a shortage in the market.

A positive cross price elasticity of one good in terms of another means that the two goods are substitutes. This means that when the price of one good increases, the demand for the other good also increases. Consumers are willing to switch from one good to another because they perceive them as similar and interchangeable. The positive cross price elasticity indicates that there is a direct relationship between the prices of the two goods, suggesting that they are substitutes for each other.

This answer suggests that even though resources are being combined efficiently in production, the quantities of goods X and Y being produced may not align with the preferences or demands of society. In other words, the production may be technically efficient, but it may not be meeting the needs or desires of the people.

Investment in capital requires the allocation of resources, which are limited. Therefore, choosing to invest in capital means forgoing the opportunity to use those resources for present consumption. This is because the resources used for investment could have been used to satisfy immediate needs or desires. The concept of opportunity cost implies that by investing in capital, individuals or businesses are giving up the benefits they could have obtained from consuming those resources in the present.

Giffen goods and Veblen goods are not the same. While both are types of goods that defy the law of demand, they have different characteristics. Giffen goods are inferior goods for which demand increases as price increases, due to a lack of substitute goods and extreme poverty. On the other hand, Veblen goods are luxury goods for which demand increases as price increases, due to their perceived status and exclusivity. Therefore, it is incorrect to say that Giffen goods are Veblen goods.

The labor supply curve is upward-sloping in some regions due to a dominant substitution effect. This means that as the wage rate increases, individuals are more likely to substitute leisure time for work in order to earn higher income. This is because the opportunity cost of leisure time becomes higher compared to the potential earnings from work. However, it is important to note that the labor supply curve may not be indefinitely upward-sloping as there could be other factors such as income effects that may influence an individual's decision to work.

A vertical line has an undefined slope because it does not have a change in the y-coordinate for any change in the x-coordinate. This means that the line goes straight up and down without any slant, resulting in a slope that is not a finite number but rather infinite.

The statement "Making a product illegal will raise its price" cannot be definitively categorized as true or false because it depends on various factors. In some cases, when a product is made illegal, its supply decreases, which can lead to an increase in price due to scarcity. However, in other cases, the demand for the product may decrease significantly when it becomes illegal, resulting in a decrease in price. Therefore, whether the price of a product increases or not after being made illegal depends on the specific circumstances and market dynamics surrounding that product.

In the short run, a firm's marginal costs initially decrease until reaching a minimum and then start to increase. This occurs because as the firm increases its production, it can take advantage of economies of scale and lower average costs. However, at a certain point, the firm may start experiencing diminishing returns, where the additional units of production lead to higher costs. This causes the marginal costs to start increasing. Therefore, the correct answer is that the firm's marginal costs initially decrease until reaching a minimum, and then increase.

In the labor market, households are considered suppliers because they provide the labor force to businesses and organizations. Households can offer their skills, time, and effort in exchange for wages or salaries. This relationship between households and the labor market is an essential component of the overall economy, as it allows for the production of goods and services. Therefore, it is accurate to say that households act as suppliers in the labor market.

The law of diminishing marginal utility states that as a person consumes more units of a good, the additional satisfaction or utility derived from each additional unit decreases. In other words, the more of a good a person consumes, the less satisfaction they will derive from each additional unit. This is because as a person satisfies their basic needs with the initial units of a good, the desire or need for additional units decreases, resulting in a decrease in the additional satisfaction gained from consuming more units.

Equity is the correct answer because a tax system that increases persons' tax liabilities with their incomes is considered equitable. This means that individuals with higher incomes are required to pay a higher proportion of their income in taxes, which helps to distribute the tax burden more fairly among different income groups. By implementing a progressive tax system, where tax rates increase as income levels rise, it promotes a more equitable distribution of wealth and contributes to reducing income inequality.

Along a demand curve, the price of the good and the quantity of the good are the variables that change. The demand curve shows the relationship between the price of a good and the quantity demanded at that price, assuming all other factors remain constant. However, income is not held constant along a demand curve. Changes in income can shift the entire demand curve, causing a change in the quantity demanded at each price level. Therefore, the correct answer is income.

Perfectly elastic demand for a good implies that demand will remain the same regardless of any price change. This means that consumers are extremely sensitive to price changes and will not adjust their quantity demanded even if the price changes significantly. In this case, the burden of any tax imposed on the good will not be shouldered solely by consumers, as they can easily switch to substitutes or reduce their consumption. Therefore, the correct answer is "None of the above."

The explanation for the given answer is that "Absolute advantage" means one party has the ability to produce more of a good or service with the same amount of resources compared to another party. It is not about the lower opportunity cost, but rather about the higher productivity or efficiency in production. Therefore, the statement is false.

If the demand curve is more elastic than the supply curve, it means that consumers are more sensitive to changes in price compared to producers. In this case, when a tax is imposed, producers are less able to pass on the burden of the tax to consumers through higher prices because consumers have more options and can easily switch to substitute goods or services. As a result, producers end up bearing a larger portion of the tax burden.

A cardinal approach to utility is not based on "revealed preference" where people indicate and rank their choices. Instead, a cardinal approach to utility focuses on assigning numerical values to different levels of utility or satisfaction. This allows for the comparison and measurement of utility across different options or choices. Therefore, the statement that a cardinal approach to utility is based on "revealed preference" is false.

The statement suggests that the demand curve will slope downward only if the income effect dominates the substitution effect. However, this is not true. The slope of the demand curve is determined by the law of demand, which states that as the price of a good increases, the quantity demanded decreases, ceteris paribus. The income and substitution effects are factors that can influence the magnitude of the change in quantity demanded, but they do not determine the direction of the slope. Therefore, the correct answer is false.

The individual is assuming that because the financial crisis happened soon after they finished their studies, it must have been caused by their decision to look for a job. This is a post hoc ergo propter hoc fallacy, which is the fallacy of assuming that because one event happened before another, it must have caused the second event. In reality, the financial crisis was likely caused by a multitude of complex factors unrelated to the individual's job search.

Consumer surplus is the difference between the price that consumers are willing to pay for a good and the actual market price of the good. In the case of a straight line and downward sloping demand curve, consumer surplus can be represented by the area of the triangle formed by the intersection of supply and demand at the equilibrium price under the demand curve. Therefore, both options A and B are correct explanations for consumer surplus.

When ticket prices are far below equilibrium, it means that the demand for tickets is much higher than the available supply. This creates a situation where scalpers can buy tickets at a lower price and then sell them at a higher price, making a positive profit. This is because there is a high demand for tickets due to the popularity of the La Salle-Ateneo UAAP basketball game, but the supply of tickets is limited, causing prices to be below the equilibrium level.