Exam 1: Economic Issues and Concepts

In traditional economies, economic behaviour is

The table below illustrates that, in one day, Tristan can produce either 12 fishing lures or mow 3 lawns, while Thomas can produce either 6 fishing lures or mow 6 lawns. Fishing lures Mowed lawns Tristan 12 3 Thomas 6 6 TABLE 1- 1 -Refer to Table 1- 1. What is Thomas's opportunity cost of producing one fishing lure?

Many economies in central and Eastern Europe, including the countries of the former Soviet Union, are still in the process of moving from a command economy to a market economy. In the first years of this transition, most of these countries experienced sharp drops in output and reductions in living standards. Economists generally see this as

With a budget of $200 million, the government can choose to purchase 4 helicopters or repair 200 km of highway. FIGURE 1- 1 -Refer to Figure 1- 1. If the government chooses to allocate all $200 million to highway repair, we can say that

Consider the production possibilities boundary (PPB) of an economy. Economic growth is illustrated by

The barter system of exchange is inefficient because

Madeleine allows herself $100 per month for purchasing coffee. The diagram below illustrates the choices available to her. FIGURE 1- 2 -Refer to Figure 1- 2. For Madeleine, the opportunity cost of one latte is

With a budget of $200 million, the government can choose to purchase 4 helicopters or repair 200 km of highway. FIGURE 1- 1 -Refer to Figure 1- 1. For the government, the opportunity cost of one search and rescue helicopter is

A farmer selling tomatoes and corn at a roadside, and a currency trader in Hong Kong, are each participating in

An economic system that relies primarily upon custom and habit in economic decision making is a

Which of the point(s) below is (are) true of money? i. Money eliminated the need for barter. ii. Money allowed for specialization of labour and expansion of trade. iii. Money allowed for the development of a market economy. iv. Money allowed one to save current production for future use.

Suppose that one unit of labour can produce either 5 units of wool or 2 pineapples. What is the opportunity cost of producing 1 pineapple?

In a modern mixed economy the government ensures that key institutions are in place to facilitate voluntary transactions between economic agents. These key institutions are

A straight- line production possibilities boundary differs from a concave boundary in which of the following ways?

Madeleine allows herself $100 per month for purchasing coffee. The diagram below illustrates the choices available to her. FIGURE 1- 2 -Refer to Figure 1- 2. Which of the following combinations of regular coffees and lattes is affordable over the one- month period, given Madeleine's budget?

The table below shows that, in one day, Claire can complete either 3 chemistry or 2 biology lab reports, while Sam can complete either 4 chemistry or 3 biology lab reports. Chemistry L ab Reports Biology Lab Reports Claire 3 2 Sam 4 3 TABLE 1- 2 -Refer to Table 1- 2. Which of the following statements about Claire's and Sam's opportunity costs is correct?

The downward- sloping line in the diagram below shows the combinations of health care and education expenditures that the government can afford with a given amount of tax revenue. FIGURE 1- 5 -Refer to Figure 1- 5. If the government's spending on health and education is given by point B, a move to point A must involve

Which countries have mostly public ownership of resources?

With a budget of $200 million, the government can choose to purchase 4 helicopters or repair 200 km of highway. FIGURE 1- 1 -Refer to Figure 1- 1. For the government, the opportunity cost of one kilometre of highway repair is A) $1 / 50$ of a search and rescue helicopter. B) $1 / 2$ of a search and rescue helicopter. C) $1 / 10$ of a search and rescue helicopter. D) $1 / 100$ of a search and rescue helicopter. E) 1 search and rescue helicopter.

Madeleine allows herself $100 per month for purchasing coffee. The diagram below illustrates the choices available to her. FIGURE 1- 2 -Refer to Figure 1- 2. If Madeleine chooses to allocate all $100 to buying lattes, we can say that her opportunity cost in one month is