Eco 550 Quiz 1 Chapter 1 & 2

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Question 1
1. When multiple facts about a sample set are known, a(n) _____ heuristic makes the choice on the basis of the first category of facts in which the samples differ. elimination representative recognition availability
Question 2
1. Which of the following products can be sold through mass advertising? A new electrocardiogram machine to be used by medical examiners A mainframe computer installation A new health insurance policy A new brand of baby diapers
Question 3
1. 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.
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If each 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 18
2. In the example of Ireland described in the text, the country’s production set shifted outward over time because: of technological advancements which improved its potato cultivation and overall agricultural production. it gained new resources over time which enabled it to specialize and gain comparative advantage in software 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 19
2. When the slope of a country’s production set declines, it implies:Answer the 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 20
2. _____ determine the efficient pattern of specialization in production.Answer Total costs Opportunity costs Marginal costs Sunk costs
Question 21
2.

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