Assignment
1. For which of the following decisions would marginal analysis be most relevant?
Should 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?
2. The opportunity cost of something is:
greater during periods of rising prices.
equal to the money cost.
less during periods of falling prices.
what is given up to acquire it.
3. A new fast-food restaurant offered a free meal (valued at $5) a week for a year to its first 100 customers. Ramona camped out for 48 hours before the opening to be one of the first 100 customers. The cost of the free meal a week for a year for Ramona was:
zero.
$260.
whatever she would have done with those 48 hours.
The cost is impossible to determine.
4. A 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 at the college library at a wage of $6, or she could finish her economics homework assignment. If she chooses to complete her homework assignment, she has incurred an opportunity cost equal to:
$7.
$6.
$13.
$0.
5. We are forced to make choices because of:
exploitation.
efficiency.
scarcity.
the margin.
6. If resources are "scarce," it means that they:
cannot provide enough goods or services to satisfy all human material wants and needs.
have no opportunity cost.
are probably not valued by consumers.
have an unlimited supply.
7. You can spend $100 on either a new economics textbook or a new CD player. If you choose to buy the new economics textbook, the opportunity cost is:
$100.
your enjoyment of the new CD player.
both the $100 and the your enjoyment of the new CD player.
impossible to determine.
8. A choice made ________ is a choice whether to do a little more or a little less of something.
at the front end
in the beginning
at the margin
ceteris paribus
9. Water is considered a scarce good because:
not 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
10. The university recently inherited a large mansion from a wealthy alumnus. The university plans to use the mansion for faculty parties and to house distinguished guests. The opportunity cost of the mansion to the university is:
zero, because it was a gift.
the original cost of building the mansion
the amount the university would receive if it sold the mansion.
the cost of catering the parties at the mansion
11. Manny is attending college and majoring in economics. Manny is improving his:
land.
labor.
capital.
human capital.
12. A resource is anything that:
can be used in production.
you pay for.
is in scarce supply.
can be consumed
13. The primary emphasis in macroeconomics is on:
how firms set prices.
the national economy.
marginal analysis.
bits and pieces of the economy.
14. The problem of scarcity is confronted by:
industrialized societies only.
preindustrialized societies only.
societies governed by communist philosophies only.
all societies.
15. Marla will make $10 by tutoring for an additional hour, but she will lose an hour of studying for her economics test. Marla decides to study rather than tutor. Marla's choice indicates that she:
values an additional hour of studying more than the $10 she would earn tutoring.
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.
16. Which of the following can best be considered the resources used in the production of computers?
money from investors
wages of the engineers
computer engineers
taxes paid on the profits from the sale of the computers
17. Some baseball fans leave the game in the seventh or eighth inning to avoid the post-game traffic. The fans are:
not considering they have already paid the cost of their tickets.
making marginal decisions by comparing the cost of leaving early to the benefit of leaving early.
thinking only about the benefits of avoiding traffic.
underestimating the value of staying for the rest of the game.
18. The problem of determining what goods and services society should produce:
exists because we can produce more than we need or want.
exists because there are not enough resources to provide all of the goods and services 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.
19. The basic concern of microeconomics is:
to 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 limited wants.
20. If you decide to go to Cancun with your friends during spring break, you realize you cannot go to Paris with your sister in the summer. This statement best represents this economic concept:
The 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.
21. When we are forced to make choices, we are facing the concept of:
ceteris paribus.
free goods.
scarcity.
the margin.
22. Florida schools offered cash bonuses to students who scored high on the state's standardized exams. The cash bonuses are an example of which of the following basic economic principles?
Resources are scarce.
The real cost of something is what you must give up to get it.
There are gains from trade.
People usually take advantage of opportunities to make themselves better off.
23. A new startup airline is offering free round-trip tickets to anywhere to the first 600 people who enter the office on the airline's first day of business. You arrive 24 hours before they are scheduled to open to be sure to get the free tickets, and you buy food from vendors while waiting in line. The cost of the tickets to you is:
zero.
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.
24. To encourage young people to go to college within their home state, state universities can:
charge higher tuition to in-state students.
award special scholarships to out-of-state students.
offer high-interest loans to in-state students.
offer lower tuition to in-state students.
25. Which of these is one of the four principles of individual choice?
Resources are usually renewable.
The real cost of something is impossible to measure.
People take advantage of opportunities to make themselves better off only if there is no risk involved.
Resources are scarce.