Exam 2: Asome Tools of the Economist

An airline ticket from Seattle to Miami costs $525.A bus ticket is $325.Traveling by plane will take 5 hours,compared with 25 hours by bus.Thus,the plane costs $200 more but saves 20 hours of time.(Hint: Note how we are "thinking at the margin" here by looking at the changes. )Other things constant,an individual will gain by choosing air travel if,and only if,each hour of her time is valued at more than

A ticket to a concert costs $45.You have a ticket and can resell it for $75.Your opportunity cost of actually attending the concert is

"If I didn't have a date tonight,I could save $40 and spend this evening out with my friends." The opportunity cost of the date is

Steve values his boat at $4,000,and Jennifer values it at $9,000.If Jennifer buys it from Steve for $7,000,which of the following is true?

Hutch Technology makes computer monitors,which sell for $500 each.What is the opportunity cost of producing ten monitors?

Middlemen are individuals who

An improvement in a country's legal system that enhanced the ability of citizens to protect their property rights and enforce contracts would result in which of the following changes to the country's production possibilities curve?

Which of the following will most likely occur under a system of clearly defined and enforced private property rights?

Recent legislation provides parents with a substantial reduction in their personal income tax liability for each child that they have.The economic way of thinking indicates that legislation of this type will

The government enforces property rights by

Which of the following is true of private ownership?

In Europe during the 14th century,the Black Plague killed 24 million people or close to 37 percent of the population.How would this affect the production possibilities curves for the countries of Europe at that time?

Steve values his Honda Accord at $10,000,and Jennifer values it at $14,000.If Jennifer buys it from Steve for $11,000,which of the following is true?

In Africa,which of the following policies has been most successful at increasing elephant populations?

With time,which one of the following strategies will most likely result in an outward shift in an economy's production possibilities curve?

Which of the following is true of exchange?

Economic analysis suggests that gains from specialization and exchange

Which of the following most accurately states the economic significance of exchange?

A popular video program used to teach economics to primary school children defines opportunity cost as "what you give up to get something." In light of your understanding of opportunity cost,how would you modify this definition?

The production possibilities curve illustrates the basic principle that