EXAM 1 FSU MACRO (CH 1,2,3) QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS) ALREADY
GRADED A+
Criteria for rationing goods and resources must be established because
of Ans✓✓✓scarcity imposed by nature
People are willing to pay more for a diamond than for a bottle of water
because Ans✓✓✓the marginal benefit of an extra diamond far exceeds
the marginal benefit of an extra bottle of water
The value of a good Ans✓✓✓depends on many factors, including who
uses it and under what circumstances
A rational decision maker takes an action if and only if Ans✓✓✓the
marginal benefit of the action exceeds the marginal cost of the action
A student noted that the football team won by a larger margin when the
third-string played more minutes. Therefore, he recommended that the
third-stringers become the first team. His conclusion was probably
erroneous because he Ans✓✓✓failed to recognize that association is not
causation
Which of the following is a positive economic statement? Ans✓✓✓if
taxes are over 50 percent of national income, job creation falls
- fact
, Because of a late night out with friends, Ayana decided to sleep in rather
than attend her 8 a.m. economics class. According to economic analysis,
her choice was Ans✓✓✓rational if Ayana values sleep more highly than
the benefit she expects to receive from attending the class.
With time, which one of the following strategies will most likely result
in an outward shift in an economy's production possibilities curve?
Ans✓✓✓institution of a tax policy encouraging research that advances
technology
In Zimbabwe and Botswana, elephants can be owned by local tribes and
trade in ivory is legal, while in countries such as Kenya, it is illegal to
trade in ivory and elephants cannot be privately owned but are protected
by the government. Which of the following is true regarding the change
in the elephant populations since 1979 in these countries? Ans✓✓✓In
Zimbabwe and Botswana, elephant populations have more than doubled,
while in Kenya, the population of elephants has fallen to less than one-
third of its previous level.
Internet sites such as eBay make it easier for sellers and buyers to find
one another and, by doing so, Ans✓✓✓reduce transaction costs
Which of the following is true of exchange? Ans✓✓✓Exchange permits
trading partners to expand their total output of goods and services as the
result of greater specialization in areas where each has a comparative
advantage.
DETAILED ANSWERS (VERIFIED ANSWERS) ALREADY
GRADED A+
Criteria for rationing goods and resources must be established because
of Ans✓✓✓scarcity imposed by nature
People are willing to pay more for a diamond than for a bottle of water
because Ans✓✓✓the marginal benefit of an extra diamond far exceeds
the marginal benefit of an extra bottle of water
The value of a good Ans✓✓✓depends on many factors, including who
uses it and under what circumstances
A rational decision maker takes an action if and only if Ans✓✓✓the
marginal benefit of the action exceeds the marginal cost of the action
A student noted that the football team won by a larger margin when the
third-string played more minutes. Therefore, he recommended that the
third-stringers become the first team. His conclusion was probably
erroneous because he Ans✓✓✓failed to recognize that association is not
causation
Which of the following is a positive economic statement? Ans✓✓✓if
taxes are over 50 percent of national income, job creation falls
- fact
, Because of a late night out with friends, Ayana decided to sleep in rather
than attend her 8 a.m. economics class. According to economic analysis,
her choice was Ans✓✓✓rational if Ayana values sleep more highly than
the benefit she expects to receive from attending the class.
With time, which one of the following strategies will most likely result
in an outward shift in an economy's production possibilities curve?
Ans✓✓✓institution of a tax policy encouraging research that advances
technology
In Zimbabwe and Botswana, elephants can be owned by local tribes and
trade in ivory is legal, while in countries such as Kenya, it is illegal to
trade in ivory and elephants cannot be privately owned but are protected
by the government. Which of the following is true regarding the change
in the elephant populations since 1979 in these countries? Ans✓✓✓In
Zimbabwe and Botswana, elephant populations have more than doubled,
while in Kenya, the population of elephants has fallen to less than one-
third of its previous level.
Internet sites such as eBay make it easier for sellers and buyers to find
one another and, by doing so, Ans✓✓✓reduce transaction costs
Which of the following is true of exchange? Ans✓✓✓Exchange permits
trading partners to expand their total output of goods and services as the
result of greater specialization in areas where each has a comparative
advantage.
