What does the supply line represent?
- A. The number of hours people are willing to work at any given wage rate
- B. The number of hours employers are willing to provide workers at any given wage rate
- C. The government's estimate of the number of hours people should be willing to work at any given wage rate
- D. The government's estimate of the number of hours employers should be willing to provide workers at any given wage rate
Correct Answer & Rationale
Correct Answer: A
The supply line represents the number of hours people are willing to work at various wage rates, reflecting individual choices based on compensation. Option B inaccurately describes the supply line as representing employer willingness, which pertains to the demand side of labor. Options C and D suggest government estimates, which do not align with the supply line's role in illustrating personal labor supply decisions rather than regulatory or prescriptive measures. Thus, the supply line fundamentally captures individual workers' responses to wage incentives, making option A the most accurate.
The supply line represents the number of hours people are willing to work at various wage rates, reflecting individual choices based on compensation. Option B inaccurately describes the supply line as representing employer willingness, which pertains to the demand side of labor. Options C and D suggest government estimates, which do not align with the supply line's role in illustrating personal labor supply decisions rather than regulatory or prescriptive measures. Thus, the supply line fundamentally captures individual workers' responses to wage incentives, making option A the most accurate.
Other Related Questions
Which point on this PPF graph indicates an inefficient use of the country's resources?
- A. V
- B. X
- C. Y
- D. Z
Correct Answer & Rationale
Correct Answer: A
Point A on the PPF graph indicates an inefficient use of the country's resources because it lies inside the production possibilities frontier (PPF). This suggests that the economy is not utilizing all available resources effectively, resulting in lower production levels than possible. Point B (X), C (Y), and D (Z) all lie on the PPF, indicating efficient resource use where maximum production is achieved. These points represent combinations of goods that utilize resources fully, reflecting optimal economic performance. Thus, only point A signifies inefficiency.
Point A on the PPF graph indicates an inefficient use of the country's resources because it lies inside the production possibilities frontier (PPF). This suggests that the economy is not utilizing all available resources effectively, resulting in lower production levels than possible. Point B (X), C (Y), and D (Z) all lie on the PPF, indicating efficient resource use where maximum production is achieved. These points represent combinations of goods that utilize resources fully, reflecting optimal economic performance. Thus, only point A signifies inefficiency.
In Grand Coast, what is the opportunity cost of one unit of fish?
- A. ½ unit of timber
- B. 5 units of timber
- C. 2 units of fish
- D. 8 units of fish
Correct Answer & Rationale
Correct Answer: A
Opportunity cost refers to the value of the next best alternative that is forgone when making a choice. In Grand Coast, if one unit of fish is produced, the opportunity cost is the amount of timber that could have been produced instead. Option A, ½ unit of timber, accurately reflects this trade-off, indicating that for each unit of fish, only half a unit of timber is sacrificed. Option B, 5 units of timber, overestimates the sacrifice, suggesting a much higher cost than what is actually incurred. Option C, 2 units of fish, misinterprets the concept, as it implies a cost in the same product rather than in timber. Option D, 8 units of fish, also incorrectly suggests a loss of the same good, failing to recognize the opportunity cost in terms of timber.
Opportunity cost refers to the value of the next best alternative that is forgone when making a choice. In Grand Coast, if one unit of fish is produced, the opportunity cost is the amount of timber that could have been produced instead. Option A, ½ unit of timber, accurately reflects this trade-off, indicating that for each unit of fish, only half a unit of timber is sacrificed. Option B, 5 units of timber, overestimates the sacrifice, suggesting a much higher cost than what is actually incurred. Option C, 2 units of fish, misinterprets the concept, as it implies a cost in the same product rather than in timber. Option D, 8 units of fish, also incorrectly suggests a loss of the same good, failing to recognize the opportunity cost in terms of timber.
What precedent was set by George Washington and maintained until the presidency of Franklin D. Roosevelt?
- A. Leaving economic policy decision-making to Congress
- B. Letting party officials pick the vice president candidate
- C. Serving no more than two terms as president
- D. Refusing to be directly involved in treaty negotiations
Correct Answer & Rationale
Correct Answer: C
George Washington established the tradition of serving no more than two terms as president, setting a standard for future leaders that emphasized the importance of a peaceful transfer of power and discouraging the concentration of authority. This precedent was respected until Franklin D. Roosevelt's four-term presidency, which ultimately led to the 22nd Amendment. Option A is incorrect; while Congress plays a significant role in economic policy, Washington's precedent focused on presidential term limits. Option B is misleading, as party officials did not formally select vice presidential candidates until later. Option D is inaccurate; Washington engaged in treaty negotiations, illustrating presidential involvement in foreign affairs.
George Washington established the tradition of serving no more than two terms as president, setting a standard for future leaders that emphasized the importance of a peaceful transfer of power and discouraging the concentration of authority. This precedent was respected until Franklin D. Roosevelt's four-term presidency, which ultimately led to the 22nd Amendment. Option A is incorrect; while Congress plays a significant role in economic policy, Washington's precedent focused on presidential term limits. Option B is misleading, as party officials did not formally select vice presidential candidates until later. Option D is inaccurate; Washington engaged in treaty negotiations, illustrating presidential involvement in foreign affairs.
What was one reason for the U.S. Constitution establishing a bicameral legislature?
- A. To create checks and balances within Congress
- B. To reflect the structure of the executive and judicial branches
- C. To divide the power of initiating bills for raising revenue
- D. To allow the two dominant political parties an equal amount of influence
Correct Answer & Rationale
Correct Answer: A
A bicameral legislature was established to create checks and balances within Congress, ensuring that both houses must agree on legislation, which prevents any one group from gaining excessive power. Option B is incorrect as the structure of the legislative branch does not directly mirror the executive and judicial branches; each has distinct functions. Option C is misleading; while revenue bills must originate in the House, this is not the primary reason for a bicameral system. Option D is also incorrect; the design was not specifically to balance power between political parties, but rather to enhance legislative deliberation and accountability.
A bicameral legislature was established to create checks and balances within Congress, ensuring that both houses must agree on legislation, which prevents any one group from gaining excessive power. Option B is incorrect as the structure of the legislative branch does not directly mirror the executive and judicial branches; each has distinct functions. Option C is misleading; while revenue bills must originate in the House, this is not the primary reason for a bicameral system. Option D is also incorrect; the design was not specifically to balance power between political parties, but rather to enhance legislative deliberation and accountability.