Homework 1 Chapter 123 Due Date: September 11,2019. TRUE/FALSE, Write T’ if the statement is true and 'F if the statement is false. 1) If it costs Vijay $150 to design 5 Web sites and $175 to design 6 Web sites, then $175 is the marginal 1) cost of producing the 6th Web site. MULTIPLE CHOICE, Choose the one alternative that best completes the statement or answers the question. Table 1-3 [Hours Open] Total Revenue (dollars) 3275 3 350 500 350 Ivan runs a custom jewelry shop in Sparkle City, He is debating whether he should extend his hours of operation. Ivan figures that his sales revenue will depend on the number of additional hours the jewelry shop is open as shown in the table above, He would have to hire a worker for those hours at a wage rate of $25 per hour. 2) Refer to Table 1-3, Using marginal analysis, how many hours should Ivan extend his hours of 2) operations? A) 2hours B) 3 hours ©) 4 hours D) Shours B) 6 hours Scenario 1-1 Suppose a t-shirt manufacturer currently sells 5,000 t-shirts per week and makes a profit of $10,000 per week. A manager at the plant observes, “Although the last 400 t-shirts we produced and sold increased our revenue by $4,000 and our costs by $4,800, we are still making an overall profit of $10,000 per week so I think we're on the right track, We are producing the optimal number of t-shirts.” 3) Refer to Scenario 1-1, Using marginal analysis terminology, what is another economic term for the 3) incremental revenue received from the sale of the last 400 t-shirts? A) gross earnings B) gross profit ©) marginal revenue D) sales revenue4) Cassie's Quilts alters, reconstructs, and restores heirloom quilts. Cassie has just spent $800 4 purchasing, cleaning, and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished. After having spent $800, Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task. Alternatively, she can sell the quilt "as is" now for $900, What should she do? {A) It does not matter what she does; she is going to take a loss on her project. B) She should cut her losses and sel the quilt now. ©) She should purchase the period fabric, complete the task and then sell the quilt. D) She should not do any more work on the quilt because she has already spent too much time onit and has not been paid for that time. 5) Trade-offs force society to make choices when answering what three fundamental questions? ‘A) What goods and services to produce; how will these goods and services be produced; and who receives them? B) How much will be saved; what will be produced; and how can these goods and services be fairly distributed? © What will be the prices of goods and services; how will these goods and services be produced; and who will receive them? D) Who gets jobs; what wages do workers eam; and who owns what property? 6) The Stogie Shop, a cigar store in the mall, sells hand-rolled cigars for $10.00 and machine-made 6) cigars for $2.50 each. What is the opportunity cost of buying a hand-rolled cigar? ‘A) $250 B) 4 machine-made cigars $10.00 D) one-quarter of a machine-made cigar 7) Skeeter's Skeeball Castle has seen its business slow down ever since Kerrie's Off-Key Karaoke n ‘opened up next door. Since the opening of Kerrie's Off-Key Karaoke, the opportunity cost of playing skeeball at Skeeter's has A) fallen to zero. B) increased. ©) not changed, 1D) decreased, 8) The branch of economics which studies the behavior of entire economies and policies that affect the 8) economy as a whole is called A) public economics. B) normative economics ©) macroeconomics. D) microeconomics. ‘TRUE/FALSE, Write T’ if the statement is true and 'F if the statement is false. 9) Examining the conditions that could lead to inflation in an economy is an example of a 9) microeconomic topic. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 10) In 2017, Smileytown consumed 50,000 tubes of toothpaste. In 2018, toothpaste consumption rose to. 10) 62,000 tubes, Calculate the percentage change in toothpaste consumption, 'A) 12% B) 16.42% ©) 19.35% 1D) 24% 11) The concept of, is that the economic cost of using a factor of production is the alternative 11) se of that factor that is given up. A) entrepreneurship B) marginal cost ©) normative economics D) opportunity cost12) shows that if all resources are fully and efficiently utilized, more of one good can be 12) produced only by producing less of another good. A) The production possiblities frontier model B) The mixed market system. ©) Absolute advantage D) Comparative advantage Figure 2-1 Roadsters ‘SUVs is (are) inefficient in that not all resources are being used. 13) ‘A) Point A B) Point B ©) Point C 1D) Points A and CFigure 2-2 160 120 o 20 40 60 80 Orchids (dozens) Figure 2-2 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. 14) Refer to Figure 2-2. What is the opportunity cost of one dozen orchids? 1) ‘A) 04 dozen roses B) 2.5 dozen roses )7.25 dozen roses D) 16 dozen roses,Figure 24 Food products Plastic products Figure 2-4 shows various points on three different production possibilities frontiers for a nation, 15) Refer to Figure 2-4, A movement from. could occur because of an influx of immigrant 15) labor. A)WtoV B) XtoW QXwY D)WoX 16) Comparative advantage means 16) A) compared to others you are better at producing a product. B) the ability to produce a good or service at a higher opportunity cost than any other producer, © the ability to produce more of a product with the same amount of resources than any other producer. 1D) the ability to produce a good or service ata lower opportunity cost than any other producer, Table 2-4 George Tack [Lawns Mowed 0 6 [Gardens Cultivated 5 q Table 2-4 shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. 17) Refer to Table 2-4. What is Jack's opportunity cost of mowing a lawn? 17) ‘A) one-half of a garden cultivated B) two lawns mowed ©) two-thirds of a garden cultivated D) one and a half lawns mowed18) Refer to Table 2-4, Which of the following statements is true? 18) ‘A) Jack has a comparative advantage in lawn mowing and George in garden cultivating, B) Jack has a comparative advantage in both tasks. ©) Jack has a comparative advantage in garden cultivating and George in lawn mowing, D) George has a comparative advantage in both tasks. 19) For each watch that Switzerland produces, it gives up the opportunity to make 50 pounds of 19) chocolate. Germany can produce 1 watch for every 100 pounds of chocolate it produces. Which of the following is true about the comparative advantage between the two countries? ‘A) Switzerland has the comparative advantage in chocolate, B) Germany has the comparative advantage in watches and chocolate. ©) Germany has the comparative advantage in watches. 1D) Switzerland has the comparative advantage in watches. Figure 2-11 Economic Goods ‘Agents and A services Spending (oP goods Economic and services Rens 8 20) Refer to Figure 2-11. In the circular flow diagram, who are economic agents A and who are 20) economic agents B? A) A= firms; B = households B) A= households; B = factor markets ©) A= firms; B = product markets D) A=households; 8 = firms