This preview has intentionally blurred parts. Sign up to view the full document

View Full Document

Unformatted Document Excerpt

Final Exam Questions 96/100 1. Economists assume that individuals (Points : 1) behave in unpredictable ways. will never take actions to help others. prefer to live in a society that values fairness above all else. are rational and respond to incentives. 2. The term "market" in economics refers to (Points : 1) a place where money changes hands. a legal institution where exchange can take place. a group of buyers and sellers of a product and the arrangement by which they come together to trade. an organization which sells goods and services. 3. In the United States and in most European countries, aging populations and declining birthrates threaten public finances. As the population ages, there are fewer workers paying taxes relative to the number of retired people receiving government benefits. Which of the following government policies would NOT help reduce the pressure on public finances? (Points : 1) offer financial incentives to increase the birthrate reduce taxes paid by current workers so that they an save for their future reduce retiree benefit payments raise the retirement age 4. Consider the following statements: Which of the above statements demonstrates that economic agents respond to incentives? (Points : 1) a only. b only. c only. a and b. a, b, and c. 5. The revenue received from the sale of an additional unit of a product (Points : 1) is a marginal benefit to the firm. is called profit. is called gross sales. is called a net gain. 6. A successful market economy requires well defined property rights and (Points : 1) balanced supplies of all factors of production. an independent court system to adjudicate disputes based on the law. detailed government regulations. a safety net to ensure that those who cannot participate in the market economy can earn an income. 7. Table 2-3 Table 2-3 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea. Refer to Table 2-3. What is South Korea's opportunity cost of producing one pound of wheat? (Points : 1) 5 digital cameras 60 digital cameras 20 digital cameras 0.05 units of a digital camera 8. A worker is hired in a (Points : 1) goods and services market. product market. government market. factor market. 9. In 2002, BMW made a tactical decision to use a robot to attach the gearbox to the engines of its vehicles instead of using two workers as it had done previously. The robot method had a higher cost but installed the gearbox in exactly the right position. In making this decision, BMW (Points : 1) faced no tradeoffs because the robot method increased efficiency. faced a tradeoff between higher cost and lower precision (in installing the gearbox in exactly the right position).... View Full Document

End of Preview

Sign up now to access the rest of the document