ECON 103 GMU exam 1 Boudreaux Questions With 100% Correct Answers!!

Which of the following is among the reasons identified by Adam smith for why the division of labor increases an economy's total output? a) specialized workers are happier than are non specialized workers b) specialized workers each work on tasks for which they each have a comparative advantage c)specialized workers follow instructions better than do non specialized workers d) specialization of workers is more likely to encourage the development of machinery to perform specialized tasks e) the principle of comparative advantage - Answer-d) specialization of workers is more likely to encourage the development of machinery to perform specialized tasks The name of robots, buildings and other goods that are built only because these goods are useful in the production of other goods or services is a) raw materials b) natural resources c) consumption goods d) capital goods e) none of the above - Answer-d) capital goods Let X and Y be consumption goods and let K be capital good, and assume that these are the only three goods produced in the economy. True or false: To produce today more X requires that less than Y or K today be produced, but to produce more K today does not require that less X or less Y be produced. a) true b) false - Answer-b) false Jack has intransitive preferences if a) he, at the moment of choice, prefers A to B, prefers B to C and prefers A to C b) he, at the moment of choice, prefers A to B prefers B to FC and prefers C to A c) today his preferences are A>B>C and tomorrow they are c>b>a d) and only if his preference "ordering" never changese) and only if his preference ordering changes at least once - Answer-b) he, at the moment of choice, prefers A to B prefers B to FC and prefers C to A Jill is irrational, acccording to economists, if a) she smokes cigarettes even knowing that her doing so reduces her life expectancy b) she often allows her emotions to cloud her judgement c) she continually makes the same mistake over and over again d) she contributes lots of money to a charity that helps strangers e) all of the above - Answer-c) she continually makes the same mistake over and over again As the amount of time increases for buyers to adjust to a change in the price of good Z, the elasticity of demand for good Z a) increases b) decreases c) doesnt change - Answer-a) increases Individuals in an economy without money conduct all exchanges by using a process called a) hoarding b) warehousing c)banking d)trolling e)barter - Answer-e) barter Adam smith argued that the chief cause of the high and growing material prosperity (the "wealth of nations") is a) the division of labor b) powerful government regulation to raise the incomes of poor people c) barter d) self-sufficiency of each household e) the principle of comparative advantage - Answer-a) the division of laborSven observed that the sun always rises after the rooster crows. From this observation Sven concludes that crowing roosters cause the sun to rise. Sven a) commits the ad hominem fallacy b) commits the post hoc, ergo propter hoc fallacy c) commits the fallacy of composition d) commits the naturalistic fallacy e) is correct - Answer-b) commits the post hoc, ergo propter hoc fallacy