WGU C719 Macroeconomics - Questions (Throughout Readings and Module QUIZZES) with COMPLETE SOLUTION

Economics is based on __________ because to understand the economy we must think about the choices made by individuals and businesses in the face of _________ of unlimited resources - ✔✔Scarcity; Unavailability In Eco ...

Economics is based on __________ because to understand the economy we must think about the choices made by individuals and businesses in the face of _________ of unlimited resources - ✔✔Scarcity; Unavailability In Economics, scarcity means that: - ✔✔there are not sufficient resources to produce everything that people want **The basic economic problem involves - scarce resources and unlimited wants. The phenomenon of scarcity stems from the fact that: - ✔✔resources are limited (Resources, such as materials, labor, and other inputs of production, are limited) Scarcity implies that: - ✔✔People must make choices A student has a job that pays a wage rate of $10 per hour. The night before a macroeconomics quiz, the student has set aside three hours to study for the quiz, estimating that for each hour spent studying, her grade will rise by five points. That night, she gets a call from her employer to come to work for a wage rate of $15 per hour for that night. She decides to work for two hours and earn an extra $30.00. The next day she takes the quiz and gets a grade of 75. Her opportunity cost for deciding to go to work, in terms of grade lost is __________. Had the student decided to study instead of going to work her opportunity cost would have been __________. - ✔✔10 pints; $30 The value of the best alternative that is sacrificed to obtain something you want is a/an - ✔✔opportunity costThe opportunity cost of attending college might best be described as: - ✔✔the student's highest-value alternative to attending college (the value that student attaches to not working) [cost of tuition + loss of income (good or bad) + personal value of experiences + future opportunities as a result] You have decided to go back to school and complete your degree in economics. You used to work 40 hours a week and now you must cut back to 25 hours per week because you spend 15 hours per week studying. If you are making $20 an hour, your weekly opportunity cost for deciding to get your degree is ____ After getting your degree, you are offered a job that pays $140,000 a year versus a job you could have gotten without your degree that pays $90,000. Your college education cost $100,000 over four years. What was the total opportunity cost of going to to college - ✔✔$300 $460,000 (because 90K *4 = 360K +100K for tuition) Bill Broadshoulder is two years away from completing college and must decide among three very compelling options about what to do with his future. Option 1. He has the option of playing professional football right now at $2 million a year. If Bill refuses the offer and decides to stay in college his opportunity cost would be ______ per year. Option 2. Bill could leave college, not complete his degree, and miss a future offer to play professionally (as a college graduate) for $3 million a year. His opportunity cost would be Hint, displayed below ______ per year. Option 3. If at the completion of his degree Bill is not hired as a professional player, he can always fall back on coaching a football team for $60,000. This means that if he decides not to complete his degree in this scenario, his opportunity cost would be Hint, displayed below _______ -Select- per year. - ✔✔2 million; 3 million; $60,000 T or F A choice curve is a graph that shows the various combinations of choices an individual can make with the resources available. - ✔✔TRUET or F An individual can make choices that fall inside or on the choice curve, but not outside the choice curve. - ✔✔TRUE (outside curve = unattainable with resources available T or F Any given point on the production possibilities curve (PPC) shows a combination of three goods that can be produced in an economy - ✔✔False - combination of two goods How can unemployment be recognized in the production possibilities curve (PPC)? - ✔✔if the point is inside the PPC (unemployment could be a reason for underproduction) Full employment of resources are represented on the production possibilities curve by ________. The assumption that all resources are alike for production purposes produces a __________ line production possibilities curve - ✔✔point on the curve; straight Which of these items would shift the PPC outward? (choose all that apply) - ✔✔An increase in technology, additional capital T or F A curved production possibilities curve (PPC) implies that some resources are better suited to the production of one item while other resources are more suited to the production of the second item. - ✔✔True - curved PPC changes assumption that resources are alike. The assumption of people being rational means people: - ✔✔Do the action with the greatest benefits at the lowest cost. The maximum combination of outputs, given resources, and technology is an _________. By improving technology in production, the production possibilities curve (PPC) will ________ - ✔✔efficient production point; shift outward (improving tech = produce more goods more efficiently