Principles of Microeconomics

Principles of Microeconomics The statement "Unemployment should be below 6 percent" is - a normative statement. From 8 to 11 p.m., Sam can either attend a basketball game, a hockey match or the symphony. Suppose that Sam decides to attend the hockey match and thinks to herself that if she did not go to the match she would go to the symphony. Then the opportunity cost of attending the hockey match is - going to the symphony. Resource use is allocatively efficient if the - marginal cost of what the resource produces is equal to the marginal benefit of what is produced. Most students attending college pay tuition and are unable to hold a full-time job. For these students, tuition is - part of the opportunity cost of going to college. So are their forgone earnings from not holding a full-time job. In economics, positive statements are about - the way things are. Capital accumulation definitely - shifts the production possibilities frontier outward. The most anyone is willing to pay for another purse is $30. Currently the price of a purse is $40, and the cost of producing another purse is $50. The marginal benefit of a purse is - $30. Your employer has asked you to start working overtime and has offered to pay $18 per hour for every hour you work beyond forty hours a week. The wage rate for each of the first forty hours will continue to be the usual $15 per hour. In terms of dollars, what is the marginal benefit of working each hour of overtime? - $18.00 Which of the following describes comparative advantage? - To produce a bushel of wheat Farmer John must give up 2 bushels of corn whereas Farmer Ben must give up 3 bushels of corn. The principle of decreasing marginal benefit means that as the quantity of a good consumed - increases, its marginal benefit decreases. According to economists, - market capitalism is the best system available and some government intervention and regulation can either help or harm the social interest. Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. Which of the following statements is true? - Washington has an absolute advantage in the production of both pecans and pears. Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that - Beth should produce pizza and Joe should produce sandwiches. Abe can catch 10 pounds of fish an hour or pick 10 pounds of fruit. Zeb can catch 30 pounds of fish an hour or pick 20 pounds of fruit. The opportunity cost of fish is ________ for Abe than for Zeb, and the opportunity cost of fruit is ________ for Abe than for Zeb. - higher; lower