Microeconomics, 3rd Edition Test Bank

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Tests, Surveys, and PoolsTestsTest Canvas : Self-Test Quiz - Chapter 01Microeconom ics, 3eTest Canvas: Self-Test Quiz - Chapter 01The Test Canvas allows you to add and edit questions, add Question Sets or Random Blocks, reorder questions,and review the test. More HelpDeletePointsUpdateHide Question DetailsSelect: AllNoneSelect by Type:- Question Type -DescriptionInstructionsTotal Questions 20Total Points201. Multiple Choice: Economists would most likely disagree...QuestionEconomists would most likelydisagreewith which of the following statements?AnswerCorrectFeedbackCorrect! There are finite amounts available of Inputs used in production such aslabor and natural resourcesSection: Individual Choice: The Core of EconomicsIncorrectFeedbackIncorrect! Economists generally agree about the power of incentives, the prevalenceof opportunity costs, and the tendency of markets to seek equilibrium.Section:Individual Choice: The Core of EconomicsPeople respond to incentives.Making a choice involves an opportunity cost.Markets move towards equilibrium.Resources and inputs used in production are unlimited.2. Multiple Choice: Macroeconomics is the branch of econo...QuestionMacroeconomics is the branch of economics studying:Answerhow prices are determined.why trade-offs exist.Edit Mode is:ONQuestion SettingsCreate QuestionReuse QuestionUpload QuestionsPoints:1Points:1

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CorrectFeedbackMacroeconomists seek to understand the patterns of recession and recovery, aswell as the underlying causes of economic growth.Section: Economy-WideInteractionsIncorrectFeedbackThe ups and downs in economic activity are the focal point of macroeconomictheory.Section: Economy-Wide Interactionshow decisions are made at the margin.fluctuations in the overall level of business activity.3. Multiple Choice: Economists generally agree that peopl...QuestionEconomists generally agree that people aremostlikely to change their behaviorwhen they:AnswerCorrectFeedbackCorrect! Economists assume that people will systematically act in ways to makethemselves better off.Section: Individual Choice: The Core of EconomicsIncorrectFeedbackIncorrect! Although scarcity is ever-present, individuals have an incentive to makethe best decisions possible in the face of scarcity.Section: Individual Choice: TheCore of Economicsare asked to do so voluntarily.are given incentives to do so.live in a world without scarcity.live in a world without opportunity costs.4. Multiple Choice: Economists would most likely agree wi...QuestionEconomists would most likelyagreewith which one of the following statements?AnswerCorrectFeedbackCorrect! The assumption that individuals seek to promote their own best interest isa cornerstone of economic theory.Section: Individual Choice: The Core ofEconomicsIncorrectFeedbackIncorrect! Economists assert that everyone can gain from trade, and that this isone of the efficiencies resulting from a market economy. However, even an efficienttrade entails an opportunity cost for both parties.Section: Individual Choice: TheCore of EconomicsWhen transactions occur voluntarily, the seller gains and the buyer loses.Market economies generate economic growth, but they do not promoteefficiency.People usually exploit opportunities to make themselves better off.If people make wise decisions, they can avoid incurring any opportunity cost.Points:1Points:1

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5. Multiple Choice: Most individuals choose careers in wh...QuestionMost individuals choose careers in which they specialize in producing only onetype of good or service, yet as consumers they have access to a wide variety ofgoods and services. What principle allows for this?AnswerCorrectFeedbackCorrect! The efficiency of market economies derives from the fact that the greatarena of trade allows for fine degrees of specialization.Section: Interaction: HowEconomies WorkIncorrectFeedbackIncorrect! Each individual will use the mechanism of the market to trade the fruits ofhis productive efforts for the items she seeks to consume.Section: Interaction:How Economies Worktradeequityscarcityopportunity cost6. Multiple Choice: In his book The Wealth of Nations, Ad...QuestionIn his bookThe Wealth of Nations, Adam Smith used the example of pin-making toillustrate the advantages of:AnswerCorrectFeedbackCorrect! Smith described the advantages of an assembly-line production methodover the practice of one craftsman making each individual item from start to finish.Section: Interaction: How Economies WorkIncorrectFeedbackIncorrect! Smith described a pin factory in which each worker specialized in onestep of the process.Section: Interaction: How Economies Workequity.specialization.marginal analysis.interaction of choices.7. Multiple Choice: An opportunity cost arises:QuestionAn opportunity cost arises:Answeronly when a monetary cost is incurred.only when a time cost is incurred.only when the wrong decision is made.Points:1Points:1Points:1

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CorrectFeedbackCorrect! The opportunity cost is the value of the best alternative forgone.Section:Individual Choice: The Core of EconomicsIncorrectFeedbackIncorrect! The opportunity cost is the value of something not chosen.Section:Individual Choice: The Core of Economicswhenever any choice is made.8. Multiple Choice: Exchanges taking place in a market sy...QuestionExchanges taking place in a market system:AnswerCorrectFeedbackCorrect! Each individual determines whether the exchange will better her own self-interest prior to agreeing to the trade.Section: Interaction: How Economies WorkIncorrectFeedbackIncorrect! Market exchanges occur when both parties expect to benefit.Section:Interaction: How Economies Workare voluntary.are inefficient.will benefit one party at the expense of another.are monitored by the government to ensure that scarce resources are beingused wisely.9. Multiple Choice: The condition of scarcity means that:QuestionThe condition of scarcity means that:AnswerCorrectFeedbackCorrect! Scarcity arises from the fact that the productive resources are not infinitelyavailableSection: Individual Choice: The Core of EconomicsIncorrectFeedbackIncorrect! Scarcity arises from the fact that the productive resources are notinfinitely available.Section: Individual Choice: The Core of Economicswhen the government produces something, there is no opportunity cost.choices must be made in the allocation of productive resources.you will not incur an opportunity cost if you make the right choice.only a command economy can make efficient use of resources.10. Multiple Choice: The purpose of an economic system is to:QuestionThe purpose of an economic system is to:Answereliminate scarcity.Points:1Points:1Points:1

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CorrectFeedbackCorrect! Not all economic systems use the same criteria for making thesedecisions, but they all allocate goods and resourcesSection: Interaction: HowEconomies WorkIncorrectFeedbackIncorrect! Allocation decisions are made by a central authority In a commandeconomy. In a market economy, they are made by the collective effect of individualdecisions.Section: Interaction: How Economies Workprotect the environment.allocate scarce resources.create an equal distribution of wealth.11. Multiple Choice: The focal point of economic inquiry is:QuestionThe focal point of economic inquiry is:AnswerCorrectFeedbackCorrect! In particular, economists look at how decisions are made at the margin byindividual households and firmsSection: Individual Choice: The Core of EconomicsIncorrectFeedbackIncorrect! Economists evaluate the way that individuals use the perceived costsand benefits of various choices they might make.Section: Individual Choice: TheCore of Economicsthe stock market.the value of the dollar.individual choice.business ethics.12. Multiple Choice: An economic system is in __________ w...QuestionAn economic system is in __________ when no individual would be better off bymaking a different choice.AnswerCorrectFeedbackCorrect! A point of equilibrium is where, ceteris paribus, no one has an incentive tomake a different decisionSection: Interaction: How Economies WorkIncorrectFeedbackIncorrect! If individuals are in the process of changing their decisions and theirbehavior, then the economy will still be moving to a point of equilibrium.Section:Interaction: How Economies WorkchaosdeclinejeopardyequilibriumPoints:1Points:1

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13. Multiple Choice: An economy is __________ if it has ex...QuestionAn economy is __________ if it has exploited all opportunities to benefit someonewithout making anyone else worse off.AnswerCorrectFeedbackCorrect! At a point of efficiency, scarce resources of an economy have been usedwhere they are most highly valued.Section: Interaction: How Economies WorkIncorrectFeedbackIncorrect! An efficient outcome is one in which any reallocation of resources wouldresult in a higher opportunity cost.Section: Interaction: How Economies Workefficientequitablewealthyfailing14. Multiple Choice: Economic theory asserts that people w...QuestionEconomic theory asserts that people will behave in ways that:AnswerCorrectFeedbackCorrect! Economists assume that people make choices based on what theyexpect will serve their own best interests.Section: Individual Choice: The Core ofEconomicsIncorrectFeedbackIncorrect! Economists predict behavior based on the idea that each individual willpursue opportunities to improve her own wellbeing.Section: Individual Choice: TheCore of Economicswill be unfair to others.will enhance their own overall well-being.will not take advantage of opportunities for self-improvement.do not follow generally predictable patterns.15. Multiple Choice: An equilibrium outcome is one in which:QuestionAn equilibrium outcome is one in which:Answerno one has as incentive to change his or her decisions or behavior.there is no scarcity.there is no opportunity cost.the distribution of wealth is fair.Points:1Points:1Points:1

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CorrectFeedbackCorrect! An equilibrium is where, ceteris paribus, no one has an incentive to makea different decision.Section: Interaction: How Economies WorkIncorrectFeedbackIncorrect! Even though individuals may be content with their choices in anequilibrium outcome, they still incur an opportunity cost in terms of the forgonealternative.Section: Interaction: How Economies Work16. Multiple Choice: Which one of the following statements...QuestionWhich one of the following statementsis not trueof a market economy?AnswerCorrectFeedbackCorrect! Market economies are characterized by scarcity and opportunity cost, andthe individuals who operate within them respond to incentives. Individual choicesdetermine the appropriate level of production and consumption.Section: IndividualChoice: The Core of EconomicsIncorrectFeedbackIncorrect! Market economies are characterized by scarcity and opportunity costand the individuals who operate within them respond to incentives. In a marketeconomy, choices made by individuals and firms determine the appropriate level ofproduction and consumption.Section: Individual Choice: The Core of EconomicsProductive resources are scarce.Every choice involves an opportunity cost.A central planning authority makes decisions about production andconsumption.People will respond to incentives.17. Multiple Choice: Market failure results when the:QuestionMarket failure results when the:AnswerCorrectFeedbackCorrect! Government intervention may be used to solve problems arising frommarket failure.Section: Interaction: How Economies WorkIncorrectFeedbackIncorrect! Traffic congestion is an example of market failure. Pollution created by achemical factory is an example of market failure. (This example explains the'pursuit of self interest leads to bad results' a little better.)Section: Interaction: HowEconomies Workpursuit of individual self-interest leads to bad results for society as a whole.market fails to create an equal distribution of wealth.market fails to create an equal distribution of income.market fails to eliminate scarcity.18. Multiple Choice: Adam Smith used the idea of the invis...QuestionPoints:1Points:1Points:1

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Adam Smith used the idea of the invisible hand to refer to the ability of marketeconomies to:AnswerCorrectFeedbackCorrect! The effect of the invisible hand is seen in the success of marketeconomies.Section: Interaction: How Economies WorkIncorrectFeedbackIncorrect! InThe Wealth of Nations, Smith talked about how producers supply uswith the goods we want to consume because they are acting in their own bestinterest. In other words, they will not earn a profit unless they are providing goodsthat consumers want to buy.Section: Interaction: How Economies Workrecover from recessions.solve the problem of market failure.harness the power of individual self-interest for the good of society as a whole.convince people that society is better off if its members sacrifice their own self-interest for the cause of the greater good.19. Multiple Choice: After finishing high school, LeBron J...QuestionAfter finishing high school, LeBron James decided to enter the NBA rather thatgoing to college to begin his studies to become a doctor. This choice between thetwo careers can best be described by:AnswerCorrectFeedbackThe value of the next best alternative when a choice is made is its opportunity cost.Section: Individual Choice: The Core of EconomicsIncorrectFeedbackIncorrect! When an individual chooses one outcome and decides to forgo theanother, what that person gives up is opportunity cost of that choice.Section:Individual Choice: The Core of Economicsequilibrium.scarcity.market failure.opportunity cost.20. Multiple Choice: If market failures exist, the market ...QuestionIf market failures exist, the market can become efficient when:Answerthe government intervenes to improve society's welfare.people just ignore the problem.the government eliminates all market transactions.Points:1Points:1

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DeletePointsUpdateHide Question DetailsSelect: AllNoneSelect by Type:- Question Type -CorrectFeedbackCorrect! Wise use of government policy can help markets operate more efficientlyand improve the welfare of the people.Section: Interaction: How Economies WorkIncorrectFeedbackIncorrect! In the presence of market failure, assuming the good or service isdesirable, governments can intervene to improve the outcome.Section: Interaction:How Economies Workall citizens immigrate to a country where the market failure does not exist.OK

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Tests, Surveys, and PoolsTestsTest Canvas : TestBanks Chapter 01: First PrinciplesMicroeconom ics, 3eTest Canvas: TestBanks Chapter 01: First PrinciplesThe Test Canvas allows you to add and edit questions, add Question Sets or Random Blocks, reorder questions,and review the test. More HelpDeletePointsUpdateHide Question DetailsSelect: AllNoneSelect by Type:- Question Type -DescriptionInstructionsTotal Questions 223Total Points01. True/False: Because the United States is a rich n...QuestionBecause the United States is a rich nation, free health care can be provided for allcitizens without considering the issue of scarcity.AnswerTrueFalse2. True/False: The study of economics arises because...QuestionThe study of economics arises because of the necessity for choice, and thenecessity for choice arises because of the fundamental problem of scarcity ofresources.AnswerTrueFalse3. True/False: Opportunity cost means that in the re...QuestionOpportunity cost means that in the rebuilding of Iraq, if the United States spends$87 billion, we have to forgo the opportunity to spend $87 billion on some otherprogram.AnswerTrueFalseEdit Mode is:ONQuestion SettingsCreate QuestionReuse QuestionUpload QuestionsPoints:0Points:0Points:0Success: 223 questions added as a copy.

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4. True/False: In 2003, Congress passed a tax cut. S...QuestionIn 2003, Congress passed a tax cut. Since taxes were reduced, the country did notincur any opportunity cost from this decision.AnswerTrueFalse5. True/False: A trade-off involves weighing the cos...QuestionA trade-off involves weighing the costs and the benefits.AnswerTrueFalse6. True/False: Using marginal analysis to decide whe...QuestionUsing marginal analysis to decide whether to consume an additional slice of pizzarequires making a comparison of the benefits and costs associated with theconsumption of an additional slice of pizza.AnswerTrueFalse7. True/False: Economists make predictions about ind...QuestionEconomists make predictions about individual behavior based on the assumptionthat people exploit opportunities to make themselves better off. The fact thatdifferent individuals make different choices when confronted with the same situationimplies that this assumption is often violated.AnswerTrueFalse8. True/False: The principle that people will exploi...QuestionThe principle that people will exploit opportunities to do what is best for others isthe basis of all predictions by economists about individual behavior.AnswerTrueFalse9. True/False: When people in Brazil engage in trade...QuestionWhen people in Brazil engage in trade with people in Germany, the citizens ofeach nation are made worse off.AnswerTrueFalse10. True/False: As long as individuals know that they...QuestionPoints:0Points:0Points:0Points:0Points:0Points:0Points:0

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As long as individuals know that they can find the goods and services that theywant in the market, they are willing to forgo being self-sufficient and are willing tospecialize.AnswerTrueFalse11. True/False: Trade allows people to get more of wh...QuestionTrade allows people to get more of what they want.AnswerTrueFalse12. True/False: In equilibrium there will be no furth...QuestionIn equilibrium there will be no further opportunities for gains from trade.AnswerTrueFalse13. True/False: An economic situation is in equilibri...QuestionAn economic situation is in equilibrium when no individual would be better off takinga different action.AnswerTrueFalse14. True/False: Market equilibrium will always be eff...QuestionMarket equilibrium will always be efficient even if it is not equitable.AnswerTrueFalse15. True/False: An economy is efficient if one person...QuestionAn economy is efficient if one person can be made better off by reallocatingresources without making anyone else worse off.AnswerTrueFalse16. True/False: Equity is the same as efficiency.QuestionEquity is the same as efficiency.AnswerTrueFalse17. True/False: If an economy's resources are used ef...QuestionPoints:0Points:0Points:0Points:0Points:0Points:0Points:0

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If an economy's resources are used efficiently, then it is guaranteed that theeconomy will also achieve equity.AnswerTrueFalse18. True/False: Handicapped-designated parking spaces...QuestionHandicapped-designated parking spaces are an example of the market economyachieving efficiency.AnswerTrueFalse19. True/False: The fact that individuals in a market...QuestionThe fact that individuals in a market economy act so as to make themselves betteroff is a major reason why a market equilibrium is usually efficient.AnswerTrueFalse20. True/False: According to the textbook, markets us...QuestionAccording to the textbook, markets usually lead to efficiency.AnswerTrueFalse21. True/False: Market failure occurs when the pursui...QuestionMarket failure occurs when the pursuit of self-interest leads to bad results.AnswerTrueFalse22. Multiple Choice: Microeconomics deals with:QuestionMicroeconomics deals with:Answerthe working of the entire economy or large sectors of it.economic growth.individual decision makers in the economy.gross domestic product.23. Multiple Choice: The study of a single firm and how it...QuestionThe study of a single firm and how it determines prices would fall under the studyof:Points:0Points:0Points:0Points:0Points:0Points:0

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Answermacroeconomics.microeconomics.economic growth.fiscal policy.24. Multiple Choice: Macroeconomics deals with:QuestionMacroeconomics deals with:Answerbits and pieces of the economy.the question of how a business unit should operate profitably.the working of the entire economy or large sectors of it.how individuals make decisions.25. Multiple Choice: The primary emphasis in macroeconomic...QuestionThe primary emphasis in macroeconomics is on:Answerhow firms set prices.the national economy.marginal analysis.bits and pieces of the economy.26. Multiple Choice: Which of the following would be studi...QuestionWhich of the following would be studied in macroeconomics?Answerthe change in automobile sales due to a change in the price of automobilesthe impact of a tax reduction on the profits of an individual businessrecessionsthe unemployment of workers displaced by technological change in thetypesetting industryPoints:0Points:0Points:0

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27. Multiple Choice: Scarcity in economics means:QuestionScarcity in economics means:AnswerWe do not have sufficient resources to produce all the goods and services wewant.The wants of people are limited.There must be poor people in rich countries.Shortages exist in nearly all markets.28. Multiple Choice: If resources are “scarce,&rdquo...QuestionIf resources are “scarce,” it means that they:Answercannot provide enough goods or services to satisfy all human material wantsand needs.have no opportunity cost.are probably not valued by consumers.have an unlimited supply.29. Multiple Choice: A key theme fundamental to all of eco...QuestionA key theme fundamental to all of economics is:AnswerThere are limited wants.We are a rich country but are simply not aware of it.People have unlimited wants facing limited means to satisfy them.There are unlimited resources.30. Multiple Choice: The problem of scarcity is confronted...QuestionThe problem of scarcity is confronted by:Answerindustrialized societies only.preindustrialized societies only.Points:0Points:0Points:0Points:0

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societies governed by communist philosophies only.all societies.31. Multiple Choice: When we are forced to make choices, w...QuestionWhen we are forced to make choices, we are facing the concept of:Answerceteris paribus.free goods.scarcity.the margin.32. Multiple Choice: The basic concern of microeconomics is:QuestionThe basic concern of microeconomics is:Answerto keep business firms from losing money.to prove that capitalism is better than socialism.to study the choices people make.to use unlimited resources to produce goods and services to satisfy limitedwants.33. Multiple Choice: How people choose among the alternati...QuestionHow people choose among the alternatives available to them is:Answernot part of the study of economics.impossible to describe.the study of microeconomics.not important.34. Multiple Choice: We are forced to make choices because...QuestionWe are forced to make choices because of:Answerexploitation.Points:0Points:0Points:0Points:0

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efficiency.scarcity.the margin.35. Multiple Choice: Scarcity exists when:QuestionScarcity exists when:Answermaking choices among two or more alternatives is not necessary.individuals can have more of any good.individuals can have more of one good but only at the expense of another.resources are unlimited.36. Multiple Choice: Scarcity in economics means:QuestionScarcity in economics means:AnswerWe do not have sufficient resources to produce all of the goods and serviceswe want.The wants of people are limited.There must be poor people in rich countries.Economists are clearly not doing their jobs.37. Multiple Choice: Although water is very abundant in mo...QuestionAlthough water is very abundant in most places, it is scarce because:Answerit has no alternative uses.there is not enough of it to meet all needs.it is a free good.scarce goods in general are not all that costly.Points:0Points:0Points:0

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38. Multiple Choice: Water is considered a scarce good bec...QuestionWater is considered a scarce good because:Answernot enough of it is available for all needs.it does not have any uses.scarce goods are less expensive.not enough of it is available for all needs and because it is less expensive.39. Multiple Choice: The problem of determining what goods...QuestionThe problem of determining what goods and services society should produce:Answerexists because we can produce more than we need or want.exists because there are not enough resources to provide all of the goods andservices that people want to purchase.would not exist if all goods and services were scarce.would not exist if government owned all of the resources.40. Multiple Choice: In China, which of the following woul...QuestionIn China, which of the following wouldnotbe a resource in the production of rice?Answerfertile landlaborcapital equipmentmoney41. Multiple Choice: A resource is anything that:QuestionA resource is anything that:Answercan be used in production.you pay for.is in scarce supply.Points:0Points:0Points:0Points:0

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can be consumed.42. Multiple Choice: We have to make choices because:QuestionWe have to make choices because:Answerwe have unlimited income.resources are scarce.resources are infinitewith good planning, trade-offs can be avoided.43. Multiple Choice: When a chef creates a dinner plate of...QuestionWhen a chef creates a dinner plate of food for a customer, which of the followingrepresents the physical capital resource?Answerthe chef himself or herselfthe oventhe food ingredientsthe chef's training and experience44. Multiple Choice: Manny is attending college and majori...QuestionManny is attending college and majoring in economics. Manny is improving his:Answerland.labor.capital.human capital.45. Multiple Choice: Which is not an example of a resource?QuestionWhich is not an example of a resource?AnswerlandlaborPoints:0Points:0Points:0Points:0

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capitalproduction46. Multiple Choice: Which of the following can best be co...QuestionWhich of the following can best be considered the resources used in the productionof computers?Answermoney from investorswages of the engineerscomputer engineerstaxes paid on the profits from the sale of the computers47. Multiple Choice: Opportunity cost is:QuestionOpportunity cost is:Answerabout half of the monetary cost of a product.the dollar payment for a product.the benefit derived from a product.the value of the best alternative forgone in making any choice.48. Multiple Choice: The opportunity cost of something is:QuestionThe opportunity cost of something is:Answergreater during periods of rising prices.equal to the money cost.less during periods of falling prices.what is given up to acquire it.49. Multiple Choice: Whenever a choice is made:QuestionWhenever a choice is made:Points:0Points:0Points:0Points:0

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Answerthe cost of that choice could be referred to as opportunity cost.the cost is easy to measure in dollar terms.efficiency is improved.scarcity is not the problem.50. Multiple Choice: You can spend $100 on either a new ec...QuestionYou can spend $100 on either a new economics textbook or a new CD player. Ifyou choose to buy the new economics textbook, the opportunity cost is:Answer$100.your enjoyment of the new CD player.both the $100 and the your enjoyment of the new CD player.impossible to determine.51. Multiple Choice: Margo spends $10,000 on one year's co...QuestionMargo spends $10,000 on one year's college tuition. The opportunity cost ofspending one year in college for Margo is:Answer$10,000.whatever she would have purchased with the $10,000 instead.whatever she would have earned had she not been in college.whatever she would have purchased with the $10,000 and whatever she wouldhave earned had she not been in college.52. Multiple Choice: If the state government allocates add...QuestionIf the state government allocates additional spending on education, the opportunitycost is:Answerzero.the dollar amount of the additional spending.considered only if additional taxes need to be raised to fund the spending.Points:0Points:0Points:0

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measured in terms of the best alternative uses for that money.53. Multiple Choice: Khalil is offered a free ticket to th...QuestionKhalil is offered a free ticket to the opera. His opportunity cost of going to the operais:Answerzero—the tickets were free.the price listed on the ticket.whatever Khalil would have done had he not gone to the opera.the price listed on the ticket or whatever Khalil would have done had he notgone to the opera.54. Multiple Choice: The cost of leaving the skating champ...QuestionThe cost of leaving the skating championship before it ends is ________, while thecost of staying for the entire match is ________.Answerthe opportunity cost of not seeing the perfect “10” performance that happens;zero—the ticket to the championship is already paid, so there is no costthe opportunity cost of not seeing the perfect “10” performance that happens;the opportunity cost of what else you could have done during that timezero—you don't have to pay to leave; zero—the ticket to the match is alreadypaid so there is no costthe cost of the ticket; the cost of the ticket55. Multiple Choice: A new fast-food restaurant offered a ...QuestionA new fast-food restaurant offered a free meal (valued at $5) a week for a year to itsfirst 100 customers. Ramona camped out for 48 hours before the opening to be oneof the first 100 customers. The cost of the free meal a week for a year for Ramonawas:Answerzero.$260.whatever she would have done with those 48 hours.The cost is impossible to determine.Points:0Points:0Points:0

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56. Multiple Choice: The local Taco Hut charges the same p...QuestionThe local Taco Hut charges the same price for everything on its menu: $3 will buy ataco, a burrito, or nachos. You buy the taco and think that if you had notpurchased the taco, you would have purchased the burrito. The opportunity cost ofthe taco is:Answerthe $3.your enjoyment of the burrito.the $3 and your enjoyment of the burrito.the $3, your enjoyment of the burrito, and your enjoyment of the nachos.57. Multiple Choice: For an economist, the cost of somethi...QuestionFor an economist, the cost of something is:Answerthe amount of money you paid for it.what you gave up to get it.always equal to its market value.the quantity of resources used to produce it.58. Multiple Choice: The best measure of the opportunity c...QuestionThe best measure of the opportunity cost of any choice is:Answerthe monetary cost of that choice.whatever you have given up to make that choice, even if no monetary costs areinvolved.the cost associated with not taking full advantage of the opportunity offered bythat choice.your hourly wage.59. Multiple Choice: While buying refreshments for an upco...QuestionPoints:0Points:0Points:0Points:0

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While buying refreshments for an upcoming party, you notice that a six-pack ofAmericana Beer costs $2 and a six-pack of Bavarian Beer costs $4. You buy thesix-pack of Bavarian Beer, although you wonder if maybe two six-packs ofAmericana Beer would have been a better choice. The opportunity cost of theBavarian Beer is:Answerthe $4.a six-pack of Americana Beer.two six-packs of Americana Beer.the $4 and the six-pack of Americana Beer.60. Multiple Choice: Your elderly grandma tells you: &ldqu...QuestionYour elderly grandma tells you: “I haven't been taking my beloved walks becauseI'm concerned about falling and getting hurt. See, there is always a cost to doingsomething. But if you don't do anything, then there is no cost.” Your grandma doesnot understand the concept of:Answerscarcity in economics.efficiency in economics.opportunity cost in economics.marginal analysis in economics.61. Multiple Choice: The cost of leaving a championship so...QuestionThe cost of leaving a championship soccer match before it ends is ________, whilethe cost of staying for the entire match is ________.Answerthe opportunity cost of not seeing the winning goal with two minutes to go;zero—the ticket to the match is already paid so there is no costthe opportunity cost of not seeing the winning goal with two minutes to go; theopportunity cost of what else you could have done during that timezero—you don't have to pay to leave; zero—the ticket to the match is alreadypaid so there is no costthe cost of the ticket; also the cost of the ticket62. Multiple Choice: Zoe's grandparents are excited about ...QuestionPoints:0Points:0Points:0

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Zoe's grandparents are excited about finally paying off their mortgage, because, asthey say, “Our cost of housing is now zero.” Zoe should explain to them theeconomic principle of:Answermarginal analysis: if the additional cost of housing is zero, then their additionalbenefit is also zero.opportunity cost: by living in the house, they are giving up the opportunity tosell the house, buy a smaller one, and pocket the difference.efficiency: if their cost of housing is now zero, they should let Zoe move inwithout charging her any rent. Zoe is better off, and her grandparents aren'thurt.equity: it is unfair that some people are still paying off their mortgage.63. Multiple Choice: The university recently inherited a l...QuestionThe university recently inherited a large mansion from a wealthy alumnus. Theuniversity plans to use the mansion for faculty parties and to house distinguishedguests. The opportunity cost of the mansion to the university is:Answerzero, because it was a gift.the original cost of building the mansionthe amount the university would receive if it sold the mansion.the cost of catering the parties at the mansion64. Multiple Choice: A new startup airline is offering fre...QuestionA new startup airline is offering free round-trip tickets to anywhere to the first 600people who enter the office on the airline's first day of business. You arrive 24 hoursbefore they are scheduled to open to be sure to get the free tickets, and you buyfood from vendors while waiting in line. The cost of the tickets to you is:Answerzero.just the cost of food while you wait in line.the cost of food while you wait in line and the opportunity cost of your time.the actual value of the ticket.65. Multiple Choice: A friend comes up to you and offers t...Points:0Points:0Points:0

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QuestionA friend comes up to you and offers to give you a free ticket to the localprofessional team's baseball game that night. You decide to attend the game. Thegame takes five hours and costs you $15 for transportation. If you had not attendedthe game, you would have worked at your part-time job for $8 an hour. What is thecost to you of attending the game?AnswerThe cost is zero—the ticket is free.$65$40$5566. Multiple Choice: The cost of going to college is:QuestionThe cost of going to college is:Answertuition and the cost of housing.tuition, the cost of housing, and the cost of books.tuition, the cost of books, and forgone income.forgone income only.67. Multiple Choice: You have $1 to spend on a vending mac...QuestionYou have $1 to spend on a vending machine snack. A bag of chips will cost you $1and the candy bar will also cost you $1. If you choose the bag of chips, theopportunity cost of buying the chips is:Answer$1 plus the enjoyment you would have received from the candy bar.$2 minus the enjoyment you received from the bag of chips.$1.the enjoyment you would have received from the candy bar.68. Multiple Choice: A college student is faced with a dif...QuestionA college student is faced with a difficult decision of how to spend one hour tonight.She could babysit her professor's child at an hourly wage of $7, she could work atthe college library at a wage of $6, or she could finish her economics homeworkassignment. If she chooses to complete her homework assignment, she hasincurred an opportunity cost equal to:Points:0Points:0Points:0

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Answer$7.$6.$13.$0.69. Multiple Choice: If you decide to go to Cancun with yo...QuestionIf you decide to go to Cancun with your friends during spring break, you realize youcannot go to Paris with your sister in the summer. This statement best representsthis economic concept:AnswerThe real cost of something is what you must give up to get it.“How much” is a decision at the margin.People usually exploit opportunities to make themselves better off.There are gains from trade.70. Multiple Choice: You decide to join the economics club...QuestionYou decide to join the economics club, but this means you can't join theaccounting club because it meets at the same time. This statement bestrepresents this economic concept:AnswerThe real cost of something is what you must give up to get it.“How much” is a decision at the margin.People usually exploit opportunities to make themselves better off.There are gains from trade.71. Multiple Choice: The student center on campus has burr...QuestionThe student center on campus has burritos, bagels, or burgers for lunch, and theyall cost the same. You decide to have a burger today, but if they were out ofburgers, you would have bought a bagel. Your opportunity cost is:Answeryour enjoyment of the burger.your enjoyment of the bagel.Points:0Points:0Points:0

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your enjoyment of the burrito.your enjoyment of the bagel and burrito.72. Multiple Choice: The economic way of thinking uses:QuestionThe economic way of thinking uses:Answerthe analysis of benefits but not costs.the analysis of costs but not benefits.making choices at the margin.making the distinction between microeconomics and macroeconomics.73. Multiple Choice: A choice made ________ is a choice wh...QuestionA choice made ________ is a choice whether to do a little more or a little less ofsomething.Answerat the front endin the beginningat the marginceteris paribus74. Multiple Choice: Which of the following is the best ex...QuestionWhich of the following is thebestexample of making a choice at the margin?Answerbuying a new carquitting your jobdrinking another cup of coffeeattending college75. Multiple Choice: You decide whether to eat one more sl...QuestionYou decide whether to eat one more slice of pizza based on how hungry you feel.This statement best represents this economic concept:Points:0Points:0Points:0Points:0

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Answerresources are scarce.the real cost of something is what you must give up to get it.“How much” is a decision at the margin.there are gains from trade.76. Multiple Choice: The concept of the margin deals with:QuestionThe concept of the margin deals with:Answermaking incremental choices.all or none of something.engaging in unethical activities.making difficult choices.77. Multiple Choice: A choice made ________ is a choice wh...QuestionA choice made ________ is a choice whether to do a little more or a little less ofsomething.Answerat the fringein the beginningat the marginafter the fact78. Multiple Choice: The best example of making a choice a...QuestionThebestexample of making a choice at the margin is:Answerbuying a new computer.quitting your job.eating another slice of pizza.attending college.Points:0Points:0Points:0

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79. Multiple Choice: Marla will make $10 by tutoring for a...QuestionMarla will make $10 by tutoring for an additional hour, but she will lose an hour ofstudying for her economics test. Marla decides to study rather than tutor. Marla'schoice indicates that she:Answervalues an additional hour of studying more than the $10 she would earntutoring.values an hour of studying less than the $10 she would earn tutoring.does not understand that there is no benefit from studying.doesn't need the money.80. Multiple Choice: Thinking in economic terms, when Mary...QuestionThinking in economic terms, when Mary Sweettooth is deciding whether to eatanother brownie, she:Answerconsiders only the price of the brownie.considers only how much additional exercise she will need to do to work off thecalories associated with eating another brownie.compares all of the benefits and costs of eating another brownie.considers whether she can do so without anyone else noticing.81. Multiple Choice: For which of the following decisions ...QuestionFor which of the following decisions would marginal analysis be most relevant?AnswerShould I go to college or work after graduating from high school?Should I eat another doughnut?Should I use $20,000 as a down payment on a house or buy a car?Should I get married?82. Multiple Choice: For which of the following decisions ...QuestionFor which of the following decisions would marginal analysis be most relevant?AnswerShould George accept a job with Delta Airlines or with Greenpeace?Points:0Points:0Points:0Points:0

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