Diaz-intro To Economics Quiz (Ch. 1)-fall 2015

Causality refers to a relationship where one event, the cause, leads to the occurrence of another event, the effect. If something is proven to have a cause and effect relationship, it means that causality exists between them. Therefore, the statement "If something is proven to be a cause and effect relationship then it said to have causality" is true.

In the story, Homer and Ned possess skills and knowledge in making beer and bread. This represents human capital as it refers to the abilities, expertise, and knowledge that individuals possess, which can be used to produce goods or services. The stoves, water, and barrels mentioned in the other options are physical resources or inputs used in the production process, but they do not represent human capital.

Based on the given PPF (Production Possibility Frontier), if Homer produces 6 coconuts, he can produce 4 fish. This can be determined by looking at the point on Homer's PPF where the coconut production is 6, and then finding the corresponding fish production.

A student without a job has the lowest opportunity cost when making a decision to study for an exam because they do not have any work commitments or responsibilities that would take away their time and energy from studying. On the other hand, a student who works full time would have limited time available for studying due to their work obligations. Similarly, a student involved in multiple sports and extracurricular activities would also have less time to allocate towards studying. Therefore, the student without a job has the least competing demands on their time and can dedicate more hours to studying, resulting in a lower opportunity cost.

The correct answer is President Obama orders all schools to have a school police officer in their buildings. This is an example of macroeconomics because it involves a government policy that affects the entire economy or a large segment of it. The decision made by President Obama has a broad impact on all schools and their resources, which is a macroeconomic concern. The other options are more focused on individual preferences or decisions, which are typically considered microeconomic factors.

Cashiers at Fareway are an example of labor because they involve human effort and skills in providing a service. Labor refers to the physical and mental work performed by individuals to produce goods or services. In this case, the cashiers at Fareway are using their knowledge, expertise, and physical effort to assist customers in the process of purchasing items and completing transactions.

Scarcity is not a factor of production because it refers to the limited availability of resources in relation to unlimited wants and needs. It is a concept that influences the allocation of resources, but it is not a direct factor of production like land, labor, human capital, physical capital, or entrepreneurship. The other options listed are all factors that contribute to the production of goods and services.

Human capital resources refer to the knowledge and skills possessed by individuals that are utilized in the production of goods and services. This includes the expertise, abilities, and education that individuals bring to the workforce, which contribute to the creation and enhancement of products and services. Unlike physical resources or machines, human capital resources are intangible and can be developed and improved through education, training, and experience. These resources are essential for economic growth and productivity, as they enable individuals to perform tasks efficiently and effectively, leading to the production of high-quality goods and services.

The correct answer is scarcity in resources. According to economists, the economic problem arises because humans have unlimited wants but limited resources available to fulfill those wants. This scarcity in resources leads to competition and trade-offs, as individuals and societies have to make choices about how to allocate their limited resources to satisfy their most important needs and wants.

Economics is the study of how individuals and societies make choices and decisions to fulfill their needs and desires. It involves analyzing the production, distribution, and consumption of goods and services. By studying economics, we gain insights into how individuals and societies allocate their resources, such as money and time, to satisfy their unlimited wants in the face of limited resources.

Scarcity is an important concept in Economics because it necessitates individuals and societies to make choices. When resources are limited and cannot satisfy unlimited wants and needs, people are forced to prioritize and make decisions about what to produce, consume, and distribute. Scarcity creates competition and drives the allocation of resources, leading to the study of how individuals and societies make rational choices to maximize their utility or well-being. Without scarcity, there would be no need for decision-making, and the fundamental principles of Economics would not apply.

The individuals in the graphic represent the factor of production known as entrepreneurs. Entrepreneurs are individuals who take risks and organize resources to create new businesses or improve existing ones. They are responsible for making decisions, managing operations, and seeking opportunities for innovation and growth. Entrepreneurs play a crucial role in driving economic development and creating wealth in a society.

Microeconomics focuses on the behavior and decision-making of individuals, households, and firms in the economy. Studying trade relations between China and the United States falls under the domain of macroeconomics, which deals with the overall functioning of the economy. On the other hand, studying the purchase habits of teenagers is more relevant to microeconomics as it involves analyzing the choices and preferences of individual consumers. Therefore, the statement that microeconomics would be more interested in studying trade relations between China and the United States than the purchase habits of teenagers is false.

The statement is false because the marginal benefit of consuming a pizza typically decreases as you consume more slices. Initially, each additional slice of pizza provides a high level of satisfaction or utility. However, as you continue to eat more slices, the enjoyment or benefit derived from each additional slice tends to diminish. This concept is known as diminishing marginal utility, which suggests that the more you consume of a particular good, the less satisfaction you derive from each additional unit.

When new technology is introduced that leads to economic growth, the production possibility frontier (curve) shifts to the right. This means that the economy is now capable of producing more goods and services than before, indicating an increase in its productive capacity. The shift to the right represents the expansion of possibilities and the ability to achieve higher levels of output.

An entrepreneur is a leader who combines the factors of production to make goods and services. They are responsible for identifying opportunities, taking risks, and organizing resources to create and run a business. Entrepreneurs play a crucial role in driving innovation, creating jobs, and contributing to economic growth. They are distinct from executives, managers, and wealth managers, as their primary focus is on starting and managing their own ventures rather than working within existing organizations.

John Rolfe obtained land to help start his tobacco farming.

John Rolfe best fits the description of an entrepreneur. He took a risk by growing tobacco in Jamestown despite the threat of death from the Spaniards. He obtained tobacco seeds and started selling the first tobacco from Virginia in London, which eventually became a highly profitable crop. Rolfe's actions demonstrate his ability to identify and seize opportunities, take risks, and create a successful business venture.

Tobacco farmers chose to use slaves instead of indentured servants because it was difficult to recruit indentured servants to work on farms due to a high death rate during the voyage and exposure to hard work and disease. Additionally, indentured servants only worked for free for a limited period of 3 to 7 years. Slaves, on the other hand, were a cheaper form of labor in the long run as their work was bought for life. Therefore, all the given options are correct explanations for why tobacco farmers chose to use slaves instead of indentured servants.

Point H represents an impossible production mix on the PPF. This means that it is not feasible to produce the combination of goods represented by point H given the available resources and technology. The PPF shows the maximum potential production combinations, and point H falls outside of this boundary, indicating that it is not achievable.

A student in the DMACC welding program represents human capital because they are acquiring knowledge and skills in the field of welding, which can be considered an investment in their own abilities and productivity. Human capital refers to the skills, knowledge, and expertise that individuals possess, which can contribute to their productivity and economic value. In this case, the student's education and training in welding are examples of human capital.

A cost benefit analysis is a tool used to evaluate the potential costs and benefits of a decision or project. By comparing the costs involved with the expected benefits, individuals and organizations can make informed decisions about whether to proceed with the project or not. This analysis helps in assessing the financial viability and potential risks associated with the decision, enabling individuals and organizations to make good decisions that align with their goals and objectives.

The given answer is incorrect because the question is about the link between eating at McDonald's and divorce, not margarine and divorce. Therefore, the answer does not accurately address the information provided in the question.

Fishing waters are considered as a factor of production under the category of land. Land refers to natural resources such as water bodies, forests, and agricultural land that are used in the production process. Fishing waters specifically fall under this category as they are a natural resource that is utilized for fishing activities and contribute to the overall production of fish and seafood.

The country is using its resources efficiently at all points on the PPF. This means that the country is maximizing its production and not wasting any resources. At each point, the country is producing the maximum amount of goods and services that it can with the given resources and technology. Therefore, all options (A, G, and E) represent points on the PPF where the country is using its resources efficiently.

The decision of whether or not to go to school is an example of a microeconomic decision because it pertains to an individual's personal choices and preferences. Microeconomics focuses on the behavior and decision-making of individuals, households, and firms, rather than the overall economy. This decision involves weighing the costs and benefits of attending school, such as the potential for education and future opportunities, against other factors like time, effort, and personal priorities.

The statement "There is no such thing as a free lunch" means that everything in life comes with a cost or trade-off. It suggests that even if something appears to be free, there is always some hidden cost or consequence associated with it. This concept is often used to emphasize the idea that nothing is truly free and that everything has a price. Therefore, the correct answer is true.

The correct answer is ovens because ovens are a form of physical capital that is used in the production of beer and bread. Ovens are necessary for baking the bread and for the fermentation process in brewing beer. Without ovens, it would not be possible to produce these goods efficiently. Grain and fruits, on the other hand, are inputs or raw materials used in the production process, but they do not represent physical capital.

In the story, Homer and Ned are depicted as having skills and knowledge in making beer and bread. This represents human capital, which refers to the skills, knowledge, and abilities possessed by individuals that contribute to their productivity and economic value. The stoves, water, and barrels mentioned in the other options are physical capital or resources used in the production process, but they do not represent the human capital of Homer and Ned.

Factors of production refer to the resources used in the production process of goods and services. These resources include land, labor, physical capital, human capital, and money. Each of these factors plays a crucial role in the production process. Land provides the natural resources, labor refers to the human effort and skills, physical capital includes machinery and equipment, human capital represents the knowledge and skills of individuals, and money is used to facilitate transactions and investment. Therefore, the term "factors of production" encompasses all the resources used in the production of goods and services.

The phrase "There is no such thing as a free lunch" implies that every decision has an opportunity cost. This means that when we make a choice, we must give up or sacrifice something else in return. It suggests that even if something appears to be free, there is always a cost associated with it, whether it be time, resources, or alternatives foregone. This concept is fundamental in economics and decision-making processes, as it reminds us to consider the trade-offs and consequences of our choices.

The law of increasing costs states that as farmers shift production from corn to wheat, the opportunity cost of producing wheat increases. This means that in order to produce more wheat, farmers have to give up increasing amounts of corn production. This is because resources that are well-suited for corn production may not be as well-suited for wheat production, leading to diminishing returns and higher costs. Therefore, the statement "The law of increasing costs states that the opportunity cost increases as farmers shift production from corn to wheat" is true.

An improvement in technology would not cause the PPF (Production Possibility Frontier) to move towards point I because technological advancements increase the efficiency and productivity of resources, allowing for a greater production capacity. As a result, the PPF would shift outward, indicating an increase in the potential output of goods and services. Moving towards point I on the PPF would imply a decrease in production due to constraints or limitations, which is not caused by an improvement in technology.

The opportunity cost of Bart producing 8 fish is 4 coconuts. This means that in order for Bart to produce 8 fish, he would have to give up producing 4 coconuts. The PPF (Production Possibility Frontier) shows the trade-off between producing fish and producing coconuts, and in this case, the trade-off is 4 coconuts for 8 fish.

The John Deere combine is an example of physical capital because it is a tangible asset used in the production process. Physical capital refers to the tools, machinery, equipment, and infrastructure that are used to produce goods and services. In this case, the combine is a piece of machinery that is used in agricultural production to harvest crops.

If the opportunity cost of a decision is higher than the marginal benefit, it means that the person will have to give up more valuable alternatives in order to pursue that decision. In this case, it would not be rational to make that decision because the person would be sacrificing more than what they would gain from it. Therefore, it is true that if the opportunity cost is higher than the marginal benefit, a person should not make that decision.

The correct answer is human capital. The passage discusses how highly-educated and highly-skilled Greek professionals are leaving the country for EU countries with stronger economies. This loss of highly-skilled workers will make it even more difficult for Greece to rebuild its economy.

The story can be classified as both microeconomic and macroeconomic because it discusses the individual decision of Miltiades Gkouzouris to leave Greece, which is a microeconomic concept. It also highlights the broader impact of Greek professionals leaving the country on Greece's economy, which is a macroeconomic concept.