Economics > EXAM > ECO 2023 Final Exam Study Set/ WITH COMPLETE SOLUTIONS (All)

ECO 2023 Final Exam Study Set/ WITH COMPLETE SOLUTIONS

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Adam Smith believed that if people were free to pursue their own interests - ANS-public interest would be served quite well Andre, a wheat farmer, is deciding whether or not to add fertilizer to his crops. If he adds 1 pound of fertilizer per acre, the value of the resulting crops rises from $80 to $100 per acre. According to marginal analysis, Andre should add fertilizer if it costs less than - ANS-$20 per pound The expression, "There's no such thing as a free lunch," implies that - ANS-the use of resources to produce a good has opportunity cost because of scarcity The opportunity cost of going to college is - ANS-the value of the best opportunity a student gives up to attend college. People are willing to pay more for a a diamond than for a bottle of water because - ANS-the marginal benefit of an extra diamond far exceeds the marginal benefit of an extra bottle of water A student noted that the football team won by a larger margin when the third-string played more minutes. Therefore, he recommended that the third-stringers become the first team. His conclusion was probably erroneous because he - ANS-failed to recognize that association is not causation Which of the following is a positive economic statement? - ANS-Government control of rent decreases the number of new apartments constructed Retired persons travel by bus and automobile more frequently than do business executives, who more commonly use air travel. An economic explanation for this would be that - ANS-business executives value their time more highly Which of the following will most likely cause an outward shift in the production possibilities curve? - ANS-an increase fro40 to 50 hours in the average number of hours worked per week With time, which one of the following strategies will most likely result in an outwards shift in an economy's production possibilities curve? - ANS-institution of a tax policy encouraging research that advances technology Which of the following is true regarding private ownership? - ANS-With private ownership, owners are held accountable for using their resources in a manner that harms resources of others In voluntary exchange, if the seller of a product gains, - ANS-the buyer must also gain; mutual gain provides the foundation for exchange

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