TOPIC1 What is Economics?
Question 1 True or False
a. Economists may disagree because they have different normative views about particular policy options.
b. Normative statement can be refuted with evidence.
c. Macroeconomic is concerned with the study of how households and firms make decisions and how they interact in specific markets.
d. When economists say, “There is no such thing as a free lunch”, they mean that all economic decisions involve trade-offs.
Question 2 Multiple Choices
1. Which of the following involve a trade-off? a. b. c. d.
buying a new car. going to university.
watching a football game on Saturday afternoon. All of the above involve trade-off.
2. Trade-offs are required because wants are unlimited and resources are a. b. c. d.
efficient marginal scarce unlimited
3. Economics is the study of a. b. c. d.
how society managers its unlimited resources how society manages its scarce resources how to reduce our wants until we are satisfied how to avoid having to make tradeoffs.
4. which of the following is an example of a normative economic statement? a. if the economy is experiencing full employment, a large tax cut will create inflation.
1
b. An increase in the government's budget deficit will cause an increase in interest rates.
c. A decrease in the minimum wage will decrease unemployment among teens. d. The federal government should increase spending on education. 5. Microeconomics is the study of a. b. c. d.
how households and firms make choices and how they interact in the market. economy-wide phenomena.
inflation, unemployment, and economic growth. the impact of government actions on the economy.
6. Macroeconomics is concerned primarily with: a. b. c. d.
the way things are produced.
the prices of particular goods and services. the behavior of consumers.
the study of economy-wide phenomena.
7. Which of the following is not a factor of production? a. b. c. d. land labour capital money
8. Suppose two economists are arguing about policies that deal with unemployment. One economist says, “The government should fight unemployment because it is the greatest social evil.” The other economist responds, “ Inflation is the greatest evil.” These economists a. b. c. d.
disagree because they have different scientific judgments disagree because they have different values.
disagree because at least one of them is a charlatan or a crank. really don’t disagree at all. It just looks that way.
9. Which of the following is a trade-off that society must make:
a. the decision to buy a new car or a new computer
b. the introduction of new technology that allows an increase in production
c. getting the most from the use of scarce resources and seeking an equitable distribution of the benefits arising from the production of goods and services d. the decision to trade off-shore 10. Scarcity implies that:
2
a. b. c. d. society is faced with choices
there are insufficient resources to satisfy the demand for goods and services prices will rise a and b
Question 3 Short-answer questions
1. Opportunity cost is what you give up to get an item. Since there is no such thing as a free lunch, assess the opportunity costs of the following scenarios:
a. Greta has received the offer of a full time job with salary of $26 000. she has also received confirmation that she has been accepted into university. She chooses university.
b. Greta has received the offer of a full time job with salary of $26 000. she has also received confirmation that she has been accepted into university. She chooses work.
c. A farmer sows 50 ha(公顷) of his land to oats(燕麦). Yielding around 2 tonnes/ha. He grows the oats for feed for his cattle. Currently feed oats are selling for $50/toonne.
d. A farmer can grow wheat or canola(菜籽油) on his 100 hectares of land. The wheat yield 5 tonnes per hectare and the canola 3 tonnes per hectare. He plants wheat.
2. what is the opportunity cost of saving some of your wages?
3. your car need to be repaired. You have already paid %500 for repairs but it still doesn’t run smoothly. You could pay another %500 and have the cars performance guaranteed or you could sell the car “as is” for 3 500. If you had the repairs done you could sell the car for $4 100. Should your repair the car? Why?
3
TUTORIAL 2 TOPIC2
Question 1
(a) Using a PPF, illustrate (1) constant and (2) increasing opportunity costs. Explain why opportunity costs can be increasing.
(b) Explain, using a diagram, the connection between scarcity, opportunity costs and the PPF.
Question 2 True or False
a. An economy must be using its resources efficiently to be operating on its production possibilities frontier (PPF).
b. The production possibilities frontier is a straight line if the trade-offs between the production of any two goods is constant.
c. Both an increase in technology levels and an increase in soil erosion across Australia cause the production possibilities frontier for the economy to move outwards.
d. If an economy is operating inside its production possibilities frontier, it must produce less of one good in order to produce more of another good.
e. If an economy is operating on its production possibilities frontier, it must not be using its resources efficiently.
f. If an economy is operating inside its production possibilities frontier, it must produce less of one good in order to produce more of another good. h. If an economy were experiencing substantial unemployment, the production possibilities curve for the economy moves inwards.
i. The production possibilities frontier is bowed outwards because the tradeoffs between the production of any two goods is constant.
j. Both an increase in immigration levels and the increase in soil erosion across
Australia cause the production possibilities curve for the economy to move inwards.
Production Possibilities Frontier
Question 3
Case Project 1 Aircraft carriers or helicopters?
China 's production possibilities frontier with respect to aircraft carriers and helicopters can be represented by the table 1
4
Table 1
Possibility a b c d e Aircraft carrier 0 1 2 3 4 Helicopter 50 45 35 20 0 Questions 1. 2. 3. 4.
Describe the production possibilities frontier.
What is the opportunity cost of producing the second aircraft carrier? What is the opportunity cost of producing the third aircraft carrier?
What is happening to the opportunity cost of producing aircraft carriers? Why?
5. Is it possible to build 80 helicopters? Is it possible to build five aircraft carriers? Case project 2 Japan-Australia trade
Australia and Japan can produce both rice and cars according to the table 2
Table 2
Japan Rice ('000 tonnes) 0 2 4 Cars (millions) 20 16 12 Australia Rice ('000 tonnes) 0 2 4 Cars (millions) 24 21 18 Questions 1. 2. 3. 4.
Question 4 Multiple Choices
1. In Japan the opportunity cost of producing 1 television is 1 computer. In the United States the opportunity cost of producing 1 television is 2 computers. The
5
What is the opportunity cost of producing more rice in each country? Which country has the comparative advantage in the production of cars? Does any country have an absolute advantage in producing cars? Is there a basis for trade?
United States has a comparative advantage in producing
a. televisions. b. computers. c. both goods d. neither good
2. In one hour Matt can debug one computer program or type ten pages of a report. Matt's opportunity cost of debugging a computer program is
a. b. c. d.
a. one page of a report ten pages of a report
1/10 of a page of a report. one hour of his time.
3 If Brazil can produce more shoes with one hour of labor than Argentina, which of the following is necessarily true?
a. b. c. d.
Brazil has a comparative advantage in the production of shoes. Brazil exports shoes to Argentina if there is free trade.
Brazil has an absolute advantage in the production of shoes. All of the above are true.
4. When trade takes place
a. b. c. d.
both parties will probably be worse off.
one party must gain at the other party's expense. both parties can be better off.
0ne party will gain and the other party will be neither better nor worse off.
6. Mary can produce housing at a lower opportunity cost than Joan. Economists would say that
a. b. c. d.
Mary has the comparative advantage in the production of housing. Joan has the comparative advantage in the production of housing. Mary has the absolute advantage in the production of housing. Joan has the absolute advantage in the production of housing.
7. like individuals, countries tend to ____________ and ____________ to meet their consumption needs.
a. b. c. d.
produce what they need; trade
specialize in what they do well; trade import; export
produce all the goods; services required
6
8. The average worker in the United States can produce 20 tons of coal or 10 tons of iron per hour. The average worker in Canada can produce either 10 tons of coal or 10 tons of iron per hour. Which conclusion is correct?
a. b. c. d.
The United States has an absolute advantage in the production of iron Canada has an absolute advantage in the production of iron. Canada has an absolute advantage in the production of coal.
The United States has an absolute advantage in the production of coal.
Buttor in Millions
Figure 1 Tractors
9. In figure 1, point X is inefficient because:
a. it is possible to produce 1.5 million more tons of butter without forgoing
any tractors.
b. it is an unobtainable production point because it is off the frontier. c. the country is technologically backward if it is producing at this point. d. resources are insufficient to produce here beyond a short period of time. 11. In figure 1, when moving from point A to point C, the opportunity cost of 2,000 additional tractors is:
a. b. c. d.
4.5 million tons of butter. 2.5 million tons of butter. 2.0 million tons of butter 0.5 million tons of butter.
12. A technological advance or an increase in the factors of production is represented as:
a. shift of the production possibilities frontier in towards the origin. b. a shift of the production possibilities frontier away from the origin.
7
c. a movement down the production possibilities frontier. d. a movement up the production possibilities frontier.
13. According to the production possibilities diagram in figure 1, point Y is:
a. b. c. d.
inefficient. efficient. unattainable.
attainable only if the economy is producing efficiently.
14. Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that:
a. b. c. d.
the nation is producing beyond its capacity, and inflation will occur. the nation is producing inefficiently. the nation is producing efficiently.
there will be a large opportunity cost if the nation tries to increase production.
15. Economic growth is depicted by:
a. A movement along a production possibilities frontier toward capital goods. b. A shift in the PPF outward c. A shift in the PPF inward
d. A movement from inside the curve toward the curve.
16. Which of the following will NOT shift a country’s production possibilities
frontier outward?
a. b. c. d.
an increase in the capital stock an advance in technology a reduction in unemployment an increase in the labour force
17. Trade can make individuals and countries better off because:
a. b. c. d.
they are able to consume more goods and services than if they didn't trade they are able to specialize
they are able to exchange goods and services voluntarily they can produce more of everything
18. According to the circular flow model:
a. in the market for goods and services, households are buyers and firms are sellers.
b. in the market for goods and services, households are sellers and firms are
8
buyers.
c. in the marekt for factors of production, households are buyers and firms are sellers.
d. firms are the owners of the factors of production.
19. Which of the following statements regarding the circular-flow diagram is
true? a. Factors of production are owned by household
b. If Susan woks for IBM and receives a pay-cheque, the transaction takes place in the market for goods and services.
c. If IBM sells a computer, the transaction takes place in the market for factors of production.
d. Factors of production are owned by firms. Question 5 Short-answer questions
Assume that there are two resources in the economy (labour and capital) and two goods (wheat and cloth). Capital is relatively more useful in producing wheat, and labor is relatively more useful in producing cloth. If the supply of capital falls by 10 percent and the supply of labor increases by 10 percent, how will the PPF for wheat and cloth change? Show with diagrams.
9
因篇幅问题不能全部显示，请点此查看更多更全内容