ECO 550 Week 2 Quiz 1http://homeworkfox.com/tutorials/economics/43 50/eco-550-week-2-quiz-1/Economics - General EconomicsQuestion 11. When multiple facts about a sample set are known, a(n) _____ heuristic makes the choice on thebasis of the first category of facts in which the samples differ.eliminationrepresentativerecognitionavailabilityQuestion 21. Which of the following products can be sold through mass advertising?A new electrocardiogram machine to be used by medical examinersA mainframe computer installationA new health insurance policyA new brand of baby diapersQuestion 31. A model of choice in economics starts by assuming that:people try to minimize their losses.people try to maximize their consumption.people try to minimize their costs.people try to maximize their utility.Question 4
1. _____ is an online venue where businesses and individuals can hedge their uncertainty aboutwhether legislation that affects them will be enacted.The American Civics ExchangeTradesportsThe Iowa Electronic MarketsThe Gallup and Roper surveysQuestion 51. _____ have the ability to recognize constraints and may choose to incur the costs of altering them.EconomistsRational peopleEntrepreneursResearch groupsQuestion 61. Assume that a cargo ship carrying the merchandise of a cloth merchant has been wrecked. Such asetback will be accounted as the merchant’s:sunk cost.deadweight loss.marginal cost.opportunity cost.Question 71. Publicly available data on production costs and box office revenues reflect that:R-rated movies on an average collect higher revenues than G-rated movies.revenue collected by PG-rated movies donot cover the production and distribution costs.G-rates movies help investors to make artistic or polictical statements.family-rated movies are on average profitable.Question 8
1. The different methods by which the sellers inform their potential buyers about the product is called:knowledge transfer.advertising.product offering.information dissemination.Question 91. The math and graphics used in economics help us better understand the logic of:verbal reasoning.rational choice.hypothesis testing.business forecasting.Question 101. The assumption of rationality in economics implies that:people perfectly understand their own preferences.people can overcome economic obstacles in the best possible way.people can make accurate calculations and they have a perfect foresight.people make choices with an eye toward attaining objectives they have chosen.Question 111. Which of the following is a root cause behind competition inherent in every society?Unlimited wants of the peoplePeople’s desire to acquire goods and services for freeScarcity of goods and servicesGenetic makeup of peopleQuestion 121. The costs which can be avoided if we alter our decisions or choices are referred to as:
average costs.opportunity costs.marginal costs.sunk costs.Question 131. When a researcher evaluates the probability of an event by looking at how representative the sampleis of the population of interest instead of the entire population, he is using:an elimination heuristic.an availability heuristic.a representative heuristic.a recognition heuristic.Question 141. Utility is a(n) _____ measure of wellbeing of a person.objectivesubjectiveordinalcardinalQuestion 151. Since people’s incomes are limited and their abilities to borrow differ they face _____ constraints.psychologicalfinancialsocietalcontractualQuestion 162. Which of the following is an example of market governance?A firm vertically integrating backward to own the necessary inputs
A firm entering into a contract with input suppliers.A school recruiting a part-time teacher to cover for a permanent employee who falls very ill.A school requesting its permanent employees to cover for a teacher who suddenly falls ill.Question 172. The economic value which can be created by a transaction between two people, Ed (seller) and Luis(buyer), is $50 as Ed’s opportunity cost of selling is $135 and Luis’ valuation of the good is $185. Ifeach gains $25 from this transaction, which of the following conclusions can be drawn?Transaction costs are zero.Luis has higher bargaining power than Ed.Ed has higher bargaining power than Luis.Transaction costs are positive.Question 182. In the example of Ireland described in the text, the country’s production set shifted outward overtime because:of technological advancements which improved its potato cultivation and overall agriculturalproduction.it gained new resources over time which enabled it to specialize and gain comparative advantage insoftware trade with the U.S. and Europe.of new resources which allowed it to gain absolute advantage over many of its trading partners.of reduction in trade barriers with the European Union.Question 192. When the slope of a country’s production set declines, it implies:Answerthe production set has shrunk.the marginal cost of producing the good measured on the Y-axis has fallen.the marginal cost of producing the good measured on the Y-axis has increased.the marginal cost of producing the good measured on the X-axis has fallen.Question 202. _____ determine the efficient pattern of specialization in production.Answer
Total costsOpportunity costsMarginal costsSunk costsQuestion 212. Megan, an analyst in Ronald’s team called in sick on a day when 4 projects were due forcompletion. Ronald divided Megan’s work between the remaining six team-members. Which form ofgovernance is being used here?EtiquetteHierarchyContractMarketQuestion 222. Prices play a smaller role in _____, in contrast to other modes of governance like _____ and _____.hierarchies; markets; contractscontracts; hierarchies; marketsmarkets; hierarchies; contractsetiquette; markets; contractsQuestion 232. If the production of 2,000 cars and 500 tons of corn during a year is economically efficient for acountry which produces only these two products, which of the following conclusions can be drawn?It satisfies domestic demand completely.The production of cars cannot be increased without reducing the production of corn.The reallocation of resources to change the production level must reduce production of both goods.It is possible to increase the production of both if resources can be reallocated.Question 24
2. If the transaction between you and the seller takes place at a price that equals your valuation of theproduct, then:you realize all the gains from this transaction.the gains from this transaction are equally divided between the two of you.the entire economic value created by the transaction goes to the seller.the economic value created by this transaction is sub-optimal.Question 252. The main reason Sears Roebuck became the largest retailer in the United States during the latenineteenth century was that:it reduced a host of transaction costs which allowed higher profits to shareholders and lower prices tocustomers.the railroad network improved substantially and charged higher rates for transporting goods.the lack of competition lowered the cost of advertising and increased profits for shareholders.his organization only interacted with the best wholesalers, distributors, and shippers in the business.Question 262. Trade between two parties is beneficial because:it ensures that the standard of living in the poorer country matches its trading partner eventually.it enables each to consume a bundle of goods that it cannot produced domestically.it has an immediate effect on an economy by increasing its production set.it allows the economy of both trading partners to grow equally.Question 272. The function of economic institutions is to:determine the profit margin of producers.determine how much an economy benefits from trade.define the environment in which we can trade.define the terms of trade between nations.Question 28
2. Fiona and Alicia divide their time equally between ironing shirts and cooking meals. Fiona can iron5 shirts and cook 2 meals in an hour. Alicia can iron 6 shirts and cook 1 meal in an hour. If they have toiron 15 shirts and cook 5 meals, who should specialize in which activity?Fiona should do all the work.Alicia should do all the work.Fiona should specialize in cooking meals and Alicia should specialize in ironing shirts.Alicia should specialize in cooking meals and Fiona should specialize in ironing shirts.Question 292. Reducing _____ the benefits available to the buyer and seller and might also enable them to makeexchanges that were previously impossible.transaction costs decreasestransaction costs increasesmarginal costs decreasesmarginal costs increasesQuestion 302. The shares of the economic value of a particular transaction that accrues to the seller and the buyerdepend on:the buyer’s opportunity cost.the relative bargaining powers of the two parties.the cost of production incurred by the seller while producing the good.the lobbying techniques adopted by the two parties.