Memorial University – Grenfell Campus

ECON 1010 – Introduction to Microeconomics

Fall 2020
Solutions for Sample Questions CH 01

Question 1
1.1) B) The study of the use of scarce resources to satisfy unlimited
human wants.
1.2) C) land, labour, and capital.
1.3) C) a factor of production.
1.4)A) People's wants can never be satisfied by the available
resources.
1.5) B) 50 kilometres of highway repair.
1.6) C) the opportunity cost of the highway repair is 4 search and
rescue helicopters.
1.7) D) G
1.8) E) 10 and 6.
1.9) C) no change.
1.10) A) when a society combines its resources efficiently, it cannot
produce more of one good without producing less of the other good.
1.11) B) $148,000
1.12) B) Katie's opportunity cost of producing 1 jar of pickles is 1/2 of
a pie.
1.13) A) $25.
1.14) C) when prospects for getting a job are poor, the opportunity
cost of going to university is lower because the wages a student can
expect to earn working in the best alternative decrease.
1.15) D) 5/2 units of wool
1.16) B) more output could be produced with existing resources.
1.17) A) constant opportunity cost of producing more of either good.
1.18) E) the increasing opportunity cost of producing more of either
good
1.19) C) A, B, or C.
1.20) B) some resources were switched from the capital goods
industries to the consumer goods industries.
1.21) A) the opportunity cost of moving to point A is zero.
1.22) E) the opportunity cost of producing an extra unit of consumer
goods is higher than at point A.

1
1.23) A) F.
1.24) C) sufficient improvements in technology occurred in either the
capital goods industry or the consumer goods industries.
1.25) A) that technology in the capital goods industries has improved.
1.26) E) an inward shift of
1.27) C) the cost of tuition and books and four years of lost wages
from employment.
1.28) A) the employment of previously idle resources.
1.29) B) an outward shift of the PPB.
1.30) D) individuals following their own self interest, doing what
seems best for themselves.
1.31) A) consumers and producers interacting in the price system.
1.32) C) It involves the trading of goods directly for other goods.
1.33) E) private property and freedom of contract.