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Question 1 (5 points)
An arrangement that allows buyers and sellers to exchange things is called __________.
Question 1 options:
a contract
a market
money
efficient
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Question 2 (5 points)
An unemployed individual decides to spend the day fishing. The opportunity cost of fishing is __________.
Question 2 options:
the cost of bait and any other monetary expenses
zero, because the person doesn’t have a job
the cost of bait, any other monetary expenses, and the value of the individual’s wages while he was working
the cost of bait, any other monetary expenses, and the value of the best alternative use of the individual’s time
Question 3 (5 points)
Economics is best defined as the study of __________.
Question 3 options:
financial decision-making
how consumers make purchasing decisions
the choices made by people faced with scarcity
inflation, unemployment, and economic growth
Question 4 (5 points)
If an economy is fully utilizing its resources, it can produce more of one product only if it __________.
Question 4 options:
doubles manufacturing of the product
produces less of another product
adds more people to the labor force
reduces the prices of the most expensive products
Question 5 (5 points)
Another factor that was responsible for roughly one-third of hybrid vehicles purchased in 2007 was an increase in the price of gasoline. The increase in sales due to higher gasoline prices describe the economic concept of __________.
Question 5 options:
using assumptions to simplify
ceteris paribus
marginal thinking
rational self-interest
Question 6 (5 points)
Jerome has a C; average in his philosophy course and a "B" average in his economics course. He decides to study an extra hour for his philosophy exam. This is an example of __________.
Question 6 options:
thinking at the margin
using assumptions to simplify
ceteris paribus
caveat emptor
Question 7 (5 points)
The opportunity cost of something is __________.
Question 7 options:
the cost of the labor used to produce it
what you sacrifice to get it
the price charged for it
the search cost required to find it
Question 8 (5 points)
Deciding if a company will produce automobiles by robotics or manual labor answers the economic question of __________.
Question 8 options:
who consumes the products produced
what products will be produced
where will the products be consumed
how will the products be produced
Question 9 (5 points)
Referring to the figure above, if you increase the production of farm goods, what other area is affected?
Question 9 options:
the price of produce
the production of manufactured goods
how much people can purchase
the wages earned by farm workers
Question 10 (5 points)
Angelina, age 7, decides to dress up like Princess Fiona for Halloween. What is the opportunity cost of her decision?
Question 10 options:
the cost of the costume
the fact that she can’t dress up like Dora the Explorer, her second choice
zero, because 7 year olds don’t have opportunity costs
the cost of the Lady Gaga costume which she did not want
Question 11 (5 points)
You rent a DVD of The Dark Knight Rises. The rental is for seven days and you watch the movie on the first day. You tell a friend about the film and your friend asks to come over and watch the movie with you before it is due back. What is your opportunity cost if you decide to watch the movie a second time instead of going to a football game?
Question 11 options:
the entire cost of the movie rental, since you have already watched the movie
one half the rental cost, because you have already watched the movie one time
The answer depends on how much you liked the movie in the first place.
the football game you forego by watching the movie again
Question 12 (5 points)
The opportunity cost of going to college __________.
Question 12 options:
is zero if your parents pay your tuition
is equal to the cost of tuition, room and board, and other expenses
includes wages you lose by going to school instead of working
is the same for all students at a particular school who pay full tuition
Question 13 (5 points)
The 3 key economic questions include all of the following EXCEPT __________.
Question 13 options:
"What products do we produce?"
"How do we produce these products?" (Incorrecr)
"Where should these products be produced?"
"Who consumes the products?"
Question 14 (5 points)
Scarcity can best be defined as a situation in which __________.
Question 14 options:
there are no buyers willing to purchase what sellers have produced
there are not enough goods to satisfy all of the buyers’ demand
the resources we use to produce goods and services are limited
there is more than enough money to satisfy consumers’ wants
Question 15 (5 points)
After the implementation of the congestion tax in London, traffic volume was reduced and travel time for cars and buses was cut in half. This is an example of __________.
Question 15 options:
responding to incentives
the role of pricing in allocating resources
caveat emptor
comparative advantage
Question 16 (5 points)
When economists assume that people are rational and respond to incentives, they mean __________.
Question 16 options:
people act with kindness
people are altruistic
people act in their own self-interest
people are selfish
Question 17 (5 points)
The production possibilities curve in Figure 2.1 illustrates the notion of __________.
Question 17 options:
increased factory goods production
increased farm produce production
diminishing resources
opportunity cost
Question 18 (5 points)
Economic models are used to __________.
Question 18 options:
explain every detail of an economic theory
explore decision making by individuals, firms, and other organizations
build physical renditions of government construction projects
represent the complexities of economic environments
Question 19 (5 points)
The principle that the cost of something is equal to what is sacrificed to get it is known as the __________.
Question 19 options:
marginal principle
principle of opportunity cost
principle of diminishing returns
reality principle
Question 20 (5 points)
To make things simpler and focus attention on what really matters, economists would __________.
Question 20 options:
use assumptions
ignore all variables
think at the margin
respond to incentives
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