Which of the following statements is correct about the roles of economists?
In trying to explain the world, economists are scientists, in trying to improve the world, they are policy advisers
Production possibilities frontiers are usually bowed outward. This is because
resources are specialized; that is some are better at producing particular goods rather than other goods.
When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good
increases as more of the good is produced
Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?
Panel (d)
Unemployment could cause this economy to produce at which point(s)?
N, O, P
Katie is planning to sell her house, and she is considering making two upgrades to the house before listing it for sale. Replacing the carpeting will cost her $2,500 and replacing the roof will cost her $9,000. Katie expects the new carpeting to increase
She should replace the carpeting but not replace the roof
The principle that "trade can make everyone better off" can apply to
All of the above are correct. Companies, individuals, nations.
If a decrease in income increases the demand for a good, then the good is a(n)
substitute good
The opportunity cost of this economy moving from point A to point B is
20 dryers
Suppose the number of buyers in a market decreases and a technological advancement occurs also. What would we expect to happen in the market
Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous
England has a comparative advantage in the production of
cheese and Spain has a comparative advantage in the production of bread
If orange juice and apple juice are substitutes, an increase in the price of orange juice will shift the demand curve for apple juice to the right
True
You know an economist has crossedd the line from scientist to policy adviser when he or she
makes normative statements
Economic models are built with
assumptions
What is the most important factor that explains differences in living standards across countries?
productivity
When the price of a good is higher than the equilibrium price,
sellers desire to produce and sell more than buyers wish to purchase
A production possibilities frontier is a straight line when
the rate of tradeoff between the two goods being produced is constant
Which of the following events would unambiguously cause an increase in the equilibrium price of cotton shirts?
an increase in the price of wool shirts and an increase in the price of raw cotton
Causes of market failure include
externalities and market power
As long as two people have different opportunity cost, each can gain from trade with the other, since trade allows each person to obtain a good at a rice lower than his or her opportunity cost
True