Economics Assessment

Topics: Economics, Supply and demand, Inflation Pages: 31 (5791 words) Published: June 10, 2013
Economics Assessments

1.1.1 Scarcity, Choice, Opportunity Costs, and Comparative Advantage – Using examples, explain how scarcity, choice, opportunity costs affect decisions that households, businesses, and governments make in the market place and explain how comparative advantage creates gains from trade.

1.Willie loves ice cream. He has found a store that sells ice cream cones at a bargain price of $0.50 each. He has just eaten two of these cones but has not decided to buy a third one. Which of the following statements best explains the economic principle at work in Willie’s decision not to buy a third cone?

A.Consumers weigh the additional costs and benefits before choosing to buy more goods. B.Consumers spend freely to increase business activity so that the price of goods will drop. C.Consumers save more by buying larger quantities.

D.Consumers buy more at lower prices.

Answer: A

2.Juan, Darrell, and Anita all want to go out with their friends on Saturday night but first they must clean their house. Use the idea of comparative advantage to decide who should do what chore in order to get the household chores done the fastest.

|Chore |Juan |Darrell |Anita | |Vacuum/Dust |35 minutes |50 minutes |25 minutes | |Do the laundry |60 minutes |30 minutes |50 minutes | |Clean the Kitchen/Bath |20 minutes |25 minutes |35 minutes |

A.Darrell should vacuum/dust; Anita should clean the kitchen/bath; Juan should do the laundry. B.Darrell should do the laundry; Anita should clean the kitchen/bath; Juan should vacuum/dust. C.Darrell should do the laundry; Anita should vacuum/dust; Juan should clean the kitchen/bath D.Darrell and Anita should clean the whole house; Juan should do nothing.

Answer: C

3. NXTX Incorporated currently has 10 workers. It would like to expand and hire more workers. Each additional worker will cost the company $100 per day. According to the information in the table below, how many workers in total should NXTX Incorporated employ to maximize its profits? |Number of |Total Revenue |

|Workers |per Day |
|10 |$1,000 |
|11 |$1,250 |
|12 |$1,325 |
|13 |$1,385 |
|14 |$1,400 |

A.11
B.12
C.13
D.14

Answer: A

4.One country enjoys a comparative advantage over another in producing oil when

A.it has more oil than the other country.
B.it can produce oil at a lower opportunity cost than the other country. C.it does not need to import oil.
D.it wants to export as much oil as possible.

Answer: B

1.12 Entrepreneurship – Identify the risks, returns and other characteristics of entrepreneurship that bear on its attractiveness as a career.

1.The owners of Grass Cutters, a lawn-mowing service, decide to purchase four additional mowers because demand for their services is increasing. The owners make this decision projecting that the output, total costs, and total revenues of their business will change in which of the following ways?

OutputTotal CostsTotal Revenues
A.IncreaseIncreaseIncrease
B.Increase IncreaseDecrease
C.IncreaseDecreaseIncrease
D.DecreaseDecreaseIncrease

Answer: A

2.Which of the following actions is an example of an improvement in human capital?

A.Carlos hires three...
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