What is Economics and Why is it Important

A  The patent for a pharmaceutical drug expired and the drug is now being replicated by a number of other producers.

B  Due to an increase in demand for craft beer in Portland, the number of microbreweries has increased.

C  The value for ivory has increased leading to an increase in the poaching of African Elephants and a decrease in the African Elephant population.

D  The reintroduction of wolves in Yellowstone was a success in that shortly after reintroduction the wolves were removed from the Endangered Species list.

A  TRUE

B  FALSE

A  Specialization allows businesses to take advantage of economies of scale.

B  Specialization allows workers to experiment with different tasks to see which responsibilities make them happiest at work.

C  Specialization in a particular small job allows workers to focus on the parts of the production process where they have an advantage.

D  Workers who specialize in certain tasks often learn to produce more quickly and with higher quality.

A  John has a test tomorrow that he must study for, but he also wants to go to a music concert tonight. He doesn’t have time for both.

B  Hawaii’s need for teachers is much higher than current quantity supplied because it is very expensive to live in Hawaii and most individuals cannot afford to live in Hawaii on a teacher’s salary.

C  Each year only a limited amount of the flu vaccine is created.

D  A puppy mill was shut down and all of the dogs went to an overcapacity humane society, leading to an increase in the supply of adoptable dogs.

A  Home Depot offered a wage higher than the minimum wage resulting in an influx of job applications.

B  Crude oil was in short supply in the 1970s, leading to a quantity demanded of gasoline being greater than the quantity supplied.

C  Due to a continuous drought in Cape Town, South Africa, the amount of water for families is limited.

D  Bee populations are on the decline due to disease, so some farmers have resorted to hand pollination of their fruits and vegetables.

A  increases output by allowing workers to each perform a wide variety of tasks

B  decreases the wage rate by making workers less valuable

C  increases output by enabling workers to take advantage of differences in their skills

D  increases output by making labor cheaper relative to capital

A  The ability to create diamonds in a laboratory has flooded the diamond market with cheap diamonds.

B  A factory has a large need for highly skilled workers, however the majority of applicants do not have any work experience.

C  Fracking in the U.S. has led to the discovery and use of natural gas, resulting in lower energy prices.

D  Animal shelters have been experiencing a decreasing demand for kittens, resulting in a decreased adoption price for kittens.

A  There would be no increase or decrease in production.

B  Production would be increased.

C  At first, production would increase, then it would return to the maximum output of 2 guitars a week.

D  Production would be slowed.

A  TRUE

B  FALSE

A  Amanda can play a song as many times as she likes with no additional cost to her.

B  A small business owner has to subcontract a portion of work due to lack of time.

C  Because the number of trained doctors is limited, some people cannot find a doctor when they need one.

D  Joey has to choose between buying a new motorcycle or buying a small boat, since he cannot afford to buy both.

A  high level of utility

B  assignment

C  college degree

D  advantage

A  Microeconomists; Microeconomists

B  Macroeconomists; Macroeconomists

C  Microeconomists; Macroeconomists

D  Macroeconomists; Microeconomists