The correct answer to the question "The field of economics is traditionally divided into two

broad subfields" is:

a. None of the other options are correct.

The field of economics is traditionally divided into microeconomics and macroeconomics,

which are not mentioned in the other options.

The correct answer to the question is:

e. None of the other options are correct.

Explanation:
When an externality is present, economic efficiency can often be enhanced by addressing the
externality itself through mechanisms such as regulation, taxes, subsidies, or property rights.
None of the listed options (weaker property rights, fewer market participants, etc.) directly
address the externality in a way that enhances economic efficiency.
The correct answer to this question is:

e. are well aware that their opportunity cost of attending college is very low.

Explanation:
College-age athletes who drop out to play professional sports are likely making a rational
decision based on the opportunity cost concept. The opportunity cost of staying in college
(e.g., missed earnings from a professional sports career) is much higher than the opportunity
cost of leaving college for a lucrative professional career. They recognize this trade-off and
make an informed decision accordingly.

The correct answer is:

d. to increase and equilibrium quantity to decrease.

Explanation:
When the supply of a product decreases, the supply curve shifts to the left. This leads to an
increase in the equilibrium price because the reduced supply creates scarcity. Simultaneously,
the equilibrium quantity decreases because less of the product is available in the market at the
new equilibrium price.

The correct answer is:

e. None of the other options are correct.

Explanation:
A downward-sloping demand curve illustrates the inverse relationship between price and
quantity demanded, not the relationship between income and quantity demanded. As the
price of a good decreases, the quantity demanded generally increases, and vice versa,
assuming all other factors remain constant.

The correct answer is:

a. not restricting trade.

Explanation:
A country that does not currently trade with others can benefit by opening up trade and not
imposing restrictions. Trade allows countries to specialize according to comparative
advantage, increasing efficiency and overall welfare. Restricting trade, whether through
imports or exports, often leads to inefficiencies and reduces the potential gains from trade.

The correct answer is:

b. the ways in which scarce resources are allocated.

Explanation:
Market economies are distinguished from other types of economies by their reliance on the
price mechanism and market forces to allocate scarce resources. In a market economy,
resources are allocated based on supply and demand rather than centralized planning or
government mandates. This is the key characteristic that sets market economies apart.

The correct answer is:

d. a decrease in consumer income.

Explanation:
If number two grade potatoes are an inferior good, a decrease in consumer income would
increase demand for these potatoes. This is because inferior goods are those for which
demand rises as consumer incomes fall. The increased demand would shift the demand curve
to the right, leading to higher equilibrium price and quantity.

The correct answer is:

b. if he devotes all of his available resources to watermelon production, then he can

produce 80 watermelons.

Explanation:
We know that for every cantaloupe produced, 1.5 watermelons must be sacrificed. If Yan can
produce 120 cantaloupes when using all his resources for cantaloupe production, the total
possible watermelons he could produce is:

120×1.5=180120×1.5=180

This shows that Yan can produce 80 watermelons if he sacrifices cantaloupe production
entirely.
The correct answer is:

b. All the other options are right statements.

Explanation:
Each of the other statements accurately describes a key aspect of trade:

 a. Trade allows nations to consume outside their production possibilities curve by

enabling access to goods and services that would otherwise be unattainable through
domestic production alone.
 c. Trade allows for specialization, where nations focus on producing goods for which
they have a comparative advantage.
 d. Trade has the potential to benefit all nations by increasing efficiency and total
output.
 e. Comparative advantage is indeed the driving force behind specialization and trade.

Since all these statements are correct, option b correctly identifies that no statement is
incorrect.
The correct answer is:

a. None of the other options are correct.

Explanation:
When income rises and the demand curve for a good (in this case, doctor’s visits) shifts to the
right, it means that doctor’s visits are a normal good—their demand increases with higher
income. However, none of the listed options directly identify "normal good," so the correct
choice is "None of the other options are correct."

e. None of the other options are correct.

Explanation:
Economists use the word equality to describe a situation in which resources or goods are
distributed uniformly across society. None of the provided options correctly captures this
meaning of equality. Efficiency, access to abundant resources, or having the same chocolate
are not definitions of equality in economic terms.

The correct answer is:

e. None of the other options are correct.

Explanation:
The gains from trade are actually based on the principle of comparative advantage, not
absolute advantage. Comparative advantage occurs when individuals or nations specialize in
the production of goods for which they have the lowest opportunity cost, enabling both
parties to benefit from trade. None of the provided options correctly reflects this foundational
economic principle.

The correct answer is:

a. None of the other options are correct.

Explanation:
None of the provided options accurately describe trade. The most accurate statement about
trade would be that it allows nations to benefit by specializing in the production of goods
where they have a comparative advantage, leading to mutual gains. The listed options contain
incorrect or oversimplified claims about trade, making "None of the other options are correct"
the best choice.

The correct answer is:

c. None of the other options are correct.

Explanation:

 a. Government policies often involve trade-offs between equality and efficiency.

Improving one often comes at the expense of the other.
 b. A larger economic pie does not guarantee that everyone will avoid hunger;
distributional issues still matter.
 d. This statement reverses the definitions. Efficiency refers to the size of the pie
(maximizing resources), and equality refers to how the pie is divided.
 e. Achieving both efficiency and equality simultaneously is not guaranteed by
dividing resources equally; equal division may reduce efficiency.

Thus, none of the options accurately describes the relationship between efficiency, equality,
and economic policies.
The correct answer is:

c. None of the other options are correct.

Explanation:

When there is a surplus of a good:

 Sellers are producing more than buyers wish to buy (not less, so a is incorrect).
 Quantity demanded does not equal quantity supplied; instead, quantity supplied
exceeds quantity demanded (so b is incorrect).
 The market is not in equilibrium because there is excess supply (so d is incorrect).
 A surplus occurs when the price is above the equilibrium price, not below (so e is
incorrect).

Thus, none of the other options are correct.

The correct answer is:

e. None of the other options are correct.

Explanation:

The supply curve slopes upward primarily because of the law of supply: as the price of a
good increases, producers are willing to supply more of it due to higher potential profits.
None of the listed options correctly explains this relationship:

 a. An increase in input prices would typically reduce supply, shifting the curve
leftward.
 b. A decrease in price reduces the incentive to supply, not increases it.
 c. Total cost of production usually increases, not falls, as more is produced.
 d. Quantity supplied does not automatically increase over time without changes in
price or other factors.

Thus, none of the options accurately describe why the supply curve slopes upward.

The correct answer is:

d. None of the other options are correct.

Explanation:

When there is a surplus of a good at the current price:

 a. The price is above the equilibrium price, not below.

 b. Quantity demanded does not equal quantity supplied. Instead, quantity supplied
exceeds quantity demanded.
 c. The market is not in equilibrium when there is a surplus.
 e. Sellers are producing more than buyers wish to buy, not less.
Since none of the options correctly describe a surplus, the correct choice is d. None of the
other options are correct.

The correct answer is:

c. Comparative advantage is determined by which person or group of persons can

produce a given quantity of a good using the fewest resources.

Explanation:

Comparative advantage is not about who can produce a good using the fewest resources (that
would be absolute advantage). Instead, comparative advantage is determined by who can
produce a good at the lowest opportunity costrelative to other activities.

 a. True: A country can have a comparative advantage even without an absolute

advantage.
 b. True: Economists emphasize the benefits of free trade using the principle of
comparative advantage.
 d. Incorrect because c is not true.
 e. True: The principle applies to both individuals and nations.

Thus, c is the statement that is not true.

The correct answer is:

e. demand decreases and supply increases.

Explanation:

For the equilibrium price to fall:

 A decrease in demand shifts the demand curve to the left, reducing the willingness
of buyers to pay.
 An increase in supply shifts the supply curve to the right, leading to excess supply at
the initial equilibrium price.

Both these changes together result in a lower equilibrium price. The other options either lead
to ambiguous price effects or cause the price to increase.
The correct answer is:

c. the actions of government central planners.

Explanation:

Under communism, the economic system was based on central planning, where government
planners decided what goods and services were produced, how they were produced, and who
received them. This was in contrast to a market economy, which relies on individual
decisions and market forces. The belief was that central planners could allocate resources
efficiently to maximize economic well-being, though this approach often led to inefficiencies
and shortages.
The correct answer is:

b. each person spends more time producing that product in which he or she has a
comparative advantage.

Explanation:

When individuals specialize in producing goods or services where they have a comparative
advantage (lower opportunity cost), they become more efficient. This allows total output in
the economy to increase because resources are used more effectively.

 a. While specialization might reduce direct competition for some resources, this is
not the primary reason total output increases.
 c. Specialization typically reduces the variety of products produced by an individual
or country, focusing instead on those where they are most efficient.
 d. Incorrect because b is correct.
 e. Specialization does not necessarily require increased government involvement; it
is primarily a market-driven process.
The correct answer is:

b. the impact of minimum-wage laws on employment in the fast food industry.

Explanation:

 Microeconomics focuses on individual markets, industries, and decision-making by

individuals and firms. The study of how minimum-wage laws affect employment in a
specific industry, such as fast food, is a classic microeconomic topic.
 Macroeconomics deals with aggregate economic issues such as inflation, national
income, and economic growth. Options a, c, and d focus on broader economic trends
and are macroeconomic in nature.
 e. Incorrect because b is correct.

Thus, b best typifies microeconomics.

he correct answer is:

d. does not shift when the price of milk changes because the price of milk is measured
on the vertical axis of the graph.

Explanation:

The supply curve shows the relationship between the price of a good (on the vertical axis)
and the quantity supplied (on the horizontal axis). A change in the price of milk results in a
movement along the supply curve, not a shift of the curve. A shift in the supply curve would
be caused by factors other than price, such as changes in production costs or technology.

 a. Correctly states that the curve does not shift, but the reasoning is incomplete.
 b. Incorrect because d is correct.
 c. Incorrect because the supply curve does not shift when the price changes.
 e. Incorrect because price changes only cause movement along the curve, not shifts.

Thus, d is the most accurate description.

The correct answer is:

d. the combinations of output that an economy should produce.

Explanation:

The production possibilities frontier (PPF) illustrates the various combinations of goods and
services that an economy can produce given its resources and technology. It represents the
trade-offs and opportunity costs involved in allocating resources to the production of different
goods.

 a, b, e: These are incorrect because the PPF does not address consumption, selling,
or buying decisions. It is strictly about production capabilities.
 c: Incorrect because d accurately describes the purpose of the PPF.
The correct answer is:

b. property rights.

Explanation:

For markets to function effectively, property rights must be clearly defined and protected.
Property rights ensure that individuals and firms can own and control resources, giving them
the incentive to produce, trade, and invest. Without secure property rights, markets fail to
allocate resources efficiently.

The correct answer is:

c. Jim has a comparative advantage in the production of baseball bats.

Explanation:

 Comparative advantage refers to the ability of an individual (or entity) to produce a

good at a lower opportunity cost than another.
 If Jim’s opportunity cost of producing baseball bats is lower than Tom’s, it means Jim
sacrifices less of other goods to produce baseball bats compared to Tom. Hence, Jim
has a comparative advantage in producing baseball bats.
b. 5/3 bushels of corn.

Explanation:

If the opportunity cost of 1 bushel of corn is 3/5 bushel of green beans, then the reciprocal
relationship gives the opportunity cost of 1 bushel of green beans in terms of corn.

 The opportunity cost of 1 bushel of green beans is 1 ÷ (3/5) = 5/3 bushels of corn.

The correct answer is:

b. does not shift because the price of hot dogs is measured on the horizontal axis of the
graph.

Explanation: When the price of hot dogs changes, it causes a movement along the demand
curve rather than shifting the curve itself. The demand curve only shifts if there is a change in
factors other than the price of the good itself, such as consumer income or preferences.

The opportunity cost of Shane's decision to choose Option B is the

value to Shane of the option he would have chosen had Option B not been available.
This represents the next best alternative forgone when a choice is
made. If you have further questions or need additional
clarification, feel free to ask!