O Search to stay in Protected View. Enable Editing 1. Understanding opportunity cost Suppose that before you began your college application process, you were offered a job to work as a floor-trainer at a local climbing gym, accompanied by a yearly salary of $30,000 (after taxes). Assume however that you decided to turn down this offer and instead attend a year of college. The total monetary cost of the year of college, including tuition, fees, and room and board expenses, is $42,000. You likely chose to attend college because (choose one): 1 - you value a year of college at more than $72,000 2 - you value a year of college at $30,000 3 - you value a year of college at $42,000 4 - you value a year of college less than $42,000 2. Equality versus efficiency All societies face a trade-off between efficiency and equality If the government lowers income taxes on Americans in the top one percent of earners, while decreasing welfare payments to citizens with incomes below the federal poverty threshold, the most likely result is AN INCREASE/A DECREASE in efficiency and A DECREASE/AN INCREASE in equality in the United States. Match each definition to its appropriate concept.O Search to stay in Protected View. Enable Editing 1. Understanding opportunity cost Suppose that before you began your college application process, you were offered a job to work as a floor-trainer at a local climbing gym, accompanied by a yearly salary of $30,000 (after taxes). Assume however that you decided to turn down this offer and instead attend a year of college. The total monetary cost of the year of college, including tuition, fees, and room and board expenses, is $42,000. You likely chose to attend college because (choose one): 1 - you value a year of college at more than $72,000 2 - you value a year of college at $30,000 3 - you value a year of college at $42,000 4 - you value a year of college less than $42,000 2. Equality versus efficiency All societies face a trade-off between efficiency and equality If the government lowers income taxes on Americans in the top one percent of earners, while decreasing welfare payments to citizens with incomes below the federal poverty threshold, the most likely result is AN INCREASE/A DECREASE in efficiency and A DECREASE/AN INCREASE in equality in the United States. Match each definition to its appropriate concept.Search Help lit, it's safer to stay in Protected View. Enable Editing Definition Equality Efficiency When economic benefits are distributed uniformly across C society When a society gets the most it can from its scarce resources 3. Changes in incentives Suppose that an increasing number of traffic collisions observed on state roads lead the governor to implement the rule that all registered vehicles must be equipped with front and side airbags. These airbags reduce the probability of serious injury in a motor vehicle collision by 62%. The new airbags INCREASE/DECREASE the probability that a driver will be injured in a traffic collision, but also give motorists an incentive to drive more CAREFULLY/RECKLESSLY, which could potentially INCREASE/DECREASE the number of car accidents that occur on state roads. 4. Scarcity, opportunity cost, and marginal analysis Ana is training for a biathlon, a winter racing sport that combines cross-country skiing and rifle shooting. Consider the following scenario: Because her ski training sessions are helping her quickly improve at skiing, Ana plans to reduce the time she spends training at the shooting range by an hour, and increase the time she spends skiing by an hour. However, her training partner says that she should pause all shooting practice and spend the entire 15 hours this week in the pool. Which basic principle of individual choice does Ana's plan illustrate that her training partner's advice does not? People usually exploit opportunities to make themselves better off. C Many decisions are made on the margin. I Resources are scarce. All costs are opportunity costs. a W ?Search Vord ew Help d to edit. it's safer to stay in Protected View. Enable Editing 5. Inflation and unemployment Suppose that, to combat severe inflation, the government decides to decrease the amount of money in circulation in the economy. This monetary policy action INCREASE/DECREASE demand for goods and services in the economy, leading to HIGHER/LOWER prices for products. In the short run, the change in prices induces firms to produce FEWER/MORE goods and services. This, in turn, leads to a HIGHER/LOWER unemployment level. Based on this analysis, the economy faces the following trade-off between inflation and unemployment: Lower inflation leads to HIGHER/LOWER unemployment. 6. Economic models Suppose an economist theorizes that the price level in the economy is directly related to the money supply, or the amount of money in circulation in the economy. The economist proposes the following relationship: P=AXM P=Price Level M=Money Supply . A=A composite of other factors, including real GDP, that change very slowly over time. What method could an economist use to gather empirical data to test the proposed relationship between money and the price level?" Unlike researchers in the hard sciences, economists cannot study complex relationships using data. An economist would persuade the Federal Reserve to change the money supply to various levels and observe the resulting changes in the price level. An economist would look for data on past changes in the money supply and note the resulting changes in the price level. Economists do not usually develop theoretical models of the economy but only analyze summary statistics about the current state of the economy. 7. The circular-flow model a W ? hpto edit, it's safer to stay in Protected View. Enable Editing The following diagram presents a circular-flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs. Markets for Goods and Services Firms Households Markets for Factors of Production Based on this model, households earn income when FIRMS/HOUSEHOLDS purchase GOODS & SERVICES/FACTORS in factor markets. Suppose Ana earns $900 per week working as an interior designer for Ourhouse. She uses $8 to go climbing at Wally's Climbing Wall. Wally's Climbing Wall pays Yakov $350 per week to work as a safety instructor. Yakov uses $400 to purchase furniture from Ourhouse. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Factor Product Event Market Market Yakov spends $400 to purchase furniture from Ourhouse C C Yakov earns $350 per week working for Wally's Climbing Wall. C C Ana spends $8 to go climbing. C C a W ?Search View) - Word View Help Enable Editing you need to edit, it's safer to stay in Protected View. Renew 100 80 PPF 60 ELECTRIC SCOOTERS (Millions) 40 20 A 0 20 40 60 80 100 I SORGHUM (Millions of bushels) Complete the following table by indicating whether each point represents output combinations that are inefficient, efficient, or unattainable. Check all that apply. Point Inefficient Efficient Unattainable A B C a W ? Nasdac hpWord View Help ed to edit, it's safer to stay in Protected View. Enable Editing ew complete me TonowIng cabre by marcaung memer each point represens output combinations that are inefficient, efficient, or unattainable. Check all that apply. Point Inefficient Efficient Unattainable A B C D E F 9. Microeconomics and macroeconomics Determine whether each of the following topics would more likely be studied in microeconomics or macroeconomics. Microeconomics Macroeconomics A consumer's optimal choice when buying C a smart TV The government's decision on how much to spend on public projects The effect of an increase in consumer C income on demand for laptops 10. Normative and positive statements The following table presents statements analyzing policies regarding breast cancer. Classify each of the listed statements as either positive or normative. Statement Positive Normative Breast cancer is the fifth most common cause of cancer death. a W ? hpo stay in Protected View. Enable Editing Income on demand for laptops 10. Normative and positive statements The following table presents statements analyzing policies regarding breast cancer. Classify each of the listed statements as either positive or normative. Statement Positive Normative Breast cancer is the fifth most common cause of cancer death. Statement Positive Normative For women aged 60 to 69, breast cancer screening significantly reduces breast cancer mortality. Doctors should encourage women aged 60 to 69 to be C screened for breast cancer. The government should force doctors to encourage women C aged 60 to 69 to be screened for breast cancer. a W ? Nasdaq hpo stay in Protected View. Enable Editing Income on demand for laptops 10. Normative and positive statements The following table presents statements analyzing policies regarding breast cancer. Classify each of the listed statements as either positive or normative. Statement Positive Normative Breast cancer is the fifth most common cause of cancer death. Statement Positive Normative For women aged 60 to 69, breast cancer screening significantly reduces breast cancer mortality. Doctors should encourage women aged 60 to 69 to be C screened for breast cancer. The government should force doctors to encourage women C aged 60 to 69 to be screened for breast cancer. a W ? Nasdaq hp