econ inquizitive

What are four ways to think like an economist?
Calvin and Hobbes run a company that sells wallet chains and wallet decals. Calvin is faster at making decals than chains, and Hobbes is faster at making chains than decals. Which statements accurately describe the situation?
Hobbes has a higher opportunity cost for making decals than calvin.

Calvin has a comparative advantage for making decals.

Company output will be maximized if Calvin makes all the decals and Hobbes makes all the chains.

Which of the following elements in a society are required for economic study?
resources in limited supply.

people with wants and needs.

decisions about how to allocate resources.

Place the appropriate label to classify each scenario as either microeconomic or macroeconomic.
1. nationwide, new housing construction declines for the third month in a row: Macroeconomic

2. A laid-off worker enrolls in job re-training: microeconomic

3. the inflation rate rise: macroeconomic

4. a team of three partners starts a new ad agency: microeconomic

Which of the following is true of economically beneficial specialization?
each worker does whatever he or she does best, compared with other tasks.

each worker does whatever involves the lowest opportunity cost, compared with other tasks.

Caroline has several options for how to spend her Saturday night, listed in order of descending preference:
Go to a folk music concert with a friend.
Get dinner with several of her sorority sisters.
Go shopping with her mom.
Study for an exam she will take on Monday.
Caroline can only do one activity. Match each activity (on the left) with its opportunity cost (on the right).
Miss concert:

shopping with mom,
studying for the exam,
dinner with sorority sisters

miss sorority dinner:

folk music concert

Which common saying best captures the concept of incentives, one of the key principles of economics?
"if the carrot doesn't work, try the stick"

In one month, Mikhail's Furnishings can make 160 carpets or 160 quilts, while Dominique's Parlor can make 120 carpets or 200 quilts. Currently, Mikhail's is making 80 carpets and 80 quilts per month while Dominique's is making 60 carpets and 100 quilts. If from now on Mikhail's starts making nothing but carpets and Dominique's makes nothing but quilts, and the two shops trade 90 quilts from Dominique's for 70 carpets from Mikhail's every week, what will be each shop's gain from trade? Answer the question by matching gains to shop.
Dominique's:

10 carpets, 10 quilts

Mikhail's

10 quilts, 10 carpets

Assume that an economy produces just two goods, pizza and wings. Which of the following are ways to increase the number of pizzas produced?
Growth in labor force,
more efficient use of existing production assets,
improved pizza-making technology,
improved wing-making technology

An economic model is always a simplification.
true

A pro football quarterback has to move. What would be a good economic reason for him to do his own moving rather than hiring someone else?
if he is retired, he no longer has the trade-off of missing practice or a game.

Which scenarios are examples of a double coincidence of wants?
Double coincidence of wants:

Chad has a desk that aiden wants, and aiden has money that chad wants.

Devon has a pumpkin that ella wants, and ella has a hat that devon wants.

How does money make the circular flow model more efficient?
having a common medium of exchange, like money, eliminates the need to barter.

In one day, Al's Furniture can make 3 tables or 4 chairs, while BIG Furniture Warehouse can make 20 tables or 30 chairs. Match the concept to the corresponding description.
Big can make more tables than AI's:
Absolute advantage

BIG and ai's could both benefit if they coordinated their production efforts.
Gain from trade

For BIG to make more tables, it has to make fewer chairs.
Trade-off

AL's can make tables at a lower opportunity cost than BIG.
Comparative advantage

Page(s) 29-30
2.2. What is a production possibilities frontier?
What simplifying assumption would explain the straight-line appearance of the PPF in the figure?
http://i.imgur.com/HElD4f4.png
All workers have the same pizza-making skills and the same wing-making skills.

For two people to successfully barter, there needs to be a double coincidence of wants. What does this mean?
each party's desires match up with something the other party has.

What is the opportunity cost of moving from point A to point C? Give your answer as a number followed by a type of good. A = 90, c = 50.
40 pizzas

Mike and Debra are the only producers in an economy with two goods, wings and pizza. What is wrong with the following statement?
"Whether Mike should make pizza or wings depends on which he is better at making."
What matters is not what mike is better at but the comparative advantage for each producer.

Consider the supply curve for bottles of soda. Identify each event as causing either a shift in supply or a movement along the supply curve.
The government taxes sugar to decrease soda consumption: shift in supply

the price of soda increase by $0.50: movement along curve

Which of the following could be expected to cause a shift in the demand curve for men's jeans, assuming jeans are a normal good?
an increase in the price of khakis,

celebrities in ads for men's jeans,

an increase in the number of jeans buyers,

rising incomes.