Question

1.Which of the following is true? a.Economics is the study of the production and distribution of money. b.Economists study human decision making in the face of scarcity. c.Economists use controlled experiments to test all of their theories especially in macroeconomics. d.Economists assume that resources are infinite.

2.What is true about trade-offs?a. Trade-offs occur only when there is a market exchange, i.e. a trade. b.Trade-offs are a consequence of scarcity and human insatiability. Tc.rade-offs never incur or involve opportunity costs. d.Trade-offs happen only on the microeconomic scale.

3.Which of the following is an example of a normative, as opposed to positive, statement? a.Water boils at the temperature of 150 degrees Celsius.b. Society should be organized according to principles of justice. c.John Rawls is the author of a book "A Theory of Justice." d.The Organization of Petrolium Exporting Countries (OPEC) decreased oil production in the 1970s and this fall in supply led to an increase in the price of oil.

4.Which of the following statements is FALSE? Group of answer choices The phenomenon of diminishing marginal product implies that the marginal cost of production will start rising as more of the good is produced. Average total cost curve is U-shaped. When long run average total cost falls as production rises, the firm is experiencing economies of scale Average total cost curve always crosses marginal cost curve at the minimum of marginal cost.

5.Which one of the following scenarios would be an example of creative destruction? Group of answer choices a.A firm producing food blenders uses cheaper materials and components which lead to a short life span of their product. b. The increased wear and tear of industrial tractors leads to their quicker than expected replacement by U.S. farmers. c. An increased demand for oil from countries such as China and India leads to higher prices of oil on the world market and a more intensive environmentally destructive extraction of oil by existing producers. d.The introduction of google glasses into the market and a quick rise in their popularity drive companies which produce only smart phones out of business.

Thank you so much.

Answer 1

Answer 1.b.Economists study human decision making in the face of scarcity.

reason- Economists study the scarcity and best choices one can make in the face of scarcity.

Answer 2. b. Trade-offs are a consequence of scarcity and human insatiability.

reason- Trade offs are due to scarcity and human greed which demand more and more good to consume.

Answer 3. Society should be organized according to principles of justice.

reason- Normative statements do no involve factual information and are based entirely of what should happen in the factual information.

Answer 4. Average total cost curve always crosses marginal cost curve at the minimum of marginal cost.

reason- ATC cuts MC at Minimum of ATC.

Answer 5. d.The introduction of google glasses into the market and a quick rise in their popularity drive companies which produce only smart phones out of business.

reason- The creativety to construct google glass leads to distraction of small local producers.