1 Microeconomics deals with:
• the working of the entire economy or large sectors of it. Incorrect
• economic growth. Incorrect
• individual
... [Show More] decision makers in the economy. (True Answer
)Correct
• gross domestic product. Incorrect
2 The study of a single firm and how it determines prices would fall under the study of:
• macroeconomics. Incorrect
• microeconomics. (True Answer )Correct
• economic growth. Incorrect
• fiscal policy. Incorrect
3 Macroeconomics deals with:
• bits and pieces of the economy. Incorrect
• the question of how a business unit should operate profitably. Incorrect
• the working of the entire economy or large sectors of it. (True Answer )Correct
• how individuals make decisions. Incorrect
4 The primary emphasis in macroeconomics is on:
• how firms set prices. Incorrect
• the national economy. (True Answer )Correct
• marginal analysis. Incorrect
• bits and pieces of the economy. Incorrect
5 Which of the following would be studied in macroeconomics?
• the change in automobile sales due to a change in the price of automobiles Incorrect
• the impact of a tax reduction on the profits of an individual
business Incorrect
• recessions (True Answer )Correct
• the unemployment of workers displaced by technological
change in the typesetting industry Incorrect
6 Scarcity in economics means:
• We do not have sufficient resources to produce all the goods and services we want. (True Answer )Correct
• The wants of people are limited. Incorrect
• There must be poor people in rich countries. Incorrect
• Shortages exist in nearly all markets. Incorrect
7 If resources are “scarce,” it means that they:
• cannot provide enough goods or services to satisfy all human material wants and needs. (True Answer )Correct
• have no opportunity cost. Incorrect
• are probably not valued by consumers. Incorrect
• have an unlimited supply. Incorrect
8 A key theme fundamental to all of economics is:
• There are limited wants. Incorrect
• We are a rich country but are simply not aware of it. Incorrect
• People have unlimited wants facing limited means to satisfy
them. (True Answer )Correct
• There are unlimited resources. Incorrect
9 The problem of scarcity is confronted by:
• industrialized societies only. Incorrect
• preindustrialized societies only. Incorrect
• societies governed by communist philosophies only. Incorrect
• all societies. (True Answer )Correct
10 When we are forced to make choices, we are facing the concept of:
• ceteris paribus. Incorrect
• free goods. Incorrect
• scarcity. (True Answer )Correct
• the margin. Incorrect
11 The basic concern of microeconomics is:
• to keep business firms from losing money. Incorrect
• to prove that capitalism is better than socialism. Incorrect
• to study the choices people make. (True Answer )Correct
• to use unlimited resources to produce goods and services to satisfy limited wants. Incorrect
12 How people choose among the alternatives available to them is:
• not part of the study of economics. Incorrect
• impossible to describe. Incorrect
• the study of microeconomics. (True Answer )Correct
• not important. Incorrect
13 We are forced to make choices because of:
• exploitation. Incorrect
• efficiency. Incorrect
• scarcity. (True Answer )Correct
• the margin. Incorrect
14 Scarcity exists when:
• making choices among two or more alternatives is not necessary. Incorrect
• individuals can have more of any good. Incorrect
• individuals can have more of one good but only at the expense of another. (True Answer )Correct
• resources are unlimited. Incorrect
15 Scarcity in economics means:
• We do not have sufficient resources to produce all of the goods and services we want. (True Answer )Correct
• The wants of people are limited. Incorrect
• There must be poor people in rich countries. Incorrect
• Economists are clearly not doing their jobs. Incorrect
16 Although water is very abundant in most places, it is scarce because:
• it has no alternative uses. Incorrect
• there is not enough of it to meet all needs. (True Answer
)Correct
• it is a free good. Incorrect
• scarce goods in general are not all that costly. Incorrect
17 Water is considered a scarce good because:
• not enough of it is available for all needs. (True Answer
)Correct
• it does not have any uses. Incorrect
• scarce goods are less expensive. Incorrect
• not enough of it is available for all needs and because it is less expensive. Incorrect
18 The problem of determining what goods and services society should produce:
• exists because we can produce more than we need or want. Incorrect
• exists because there are not enough resources to provide all of
the goods and services that people want to purchase. (True Answer )Correct
• would not exist if all goods and services were
scarce. Incorrect
• would not exist if government owned all of the resources. Incorrect
19 In China, which of the following would not be a resource in the production of rice?
• fertile land Incorrect
• labor Incorrect
• capital equipment Incorrect
• money (True Answer )Correct
20 A resource is anything that:
• can be used in production. (True Answer )Correct
• you pay for. Incorrect
• is in scarce supply. Incorrect
• can be consumed. Incorrect
21 We have to make choices because:
• we have unlimited income. Incorrect
• resources are scarce. (True Answer )Correct
• resources are infinite Incorrect
• with good planning, trade-offs can be avoided. Incorrect
22 When a chef creates a dinner plate of food for a customer, which of the following represents the physical capital resource?
• the chef himself or herself Incorrect
• the oven (True Answer )Correct
• the food ingredients Incorrect
• the chef's training and experience Incorrect
23 Manny is attending college and majoring in economics. Manny is improving his:
• land. Incorrect
• labor. Incorrect
• capital. Incorrect
• human capital. (True Answer )Correct
24 Which is not an example of a resource?
• land Incorrect
• labor Incorrect
• capital Incorrect
• production (True Answer )Correct
25 Which of the following can best be considered the resources used in the production of computers?
• money from investors Incorrect
• wages of the engineers Incorrect
• computer engineers (True Answer )Correct
• taxes paid on the profits from the sale of the computers Incorrect
26 Opportunity cost is:
• about half of the monetary cost of a product. Incorrect
• the dollar payment for a product. Incorrect
• the benefit derived from a product. Incorrect
• the value of the best alternative forgone in making any choice. (True Answer )Correct
27 The opportunity cost of something is:
• greater during periods of rising prices. Incorrect
• equal to the money cost. Incorrect
• less during periods of falling prices. Incorrect
• what is given up to acquire it. (True Answer )Correct
28 Whenever a choice is made:
• the cost of that choice could be referred to as opportunity cost. (True Answer )Correct
• the cost is easy to measure in dollar terms. Incorrect
• efficiency is improved. Incorrect
• scarcity is not the problem. Incorrect
29 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. Incorrect
• your enjoyment of the new CD player. (True Answer )Correct
• both the $100 and the your enjoyment of the new CD player. Incorrect
• impossible to determine. Incorrect
30 Margo spends $10,000 on one year's college tuition. The opportunity cost of spending one year in college for Margo is:
• $10,000. Incorrect
• whatever she would have purchased with the $10,000 instead. Incorrect
• whatever she would have earned had she not been in
college. Incorrect
• whatever she would have purchased with the $10,000 and
whatever she would have earned had she not been in college. (True Answer )Correct
31 If the state government allocates additional spending on education, the opportunity cost is:
• zero. Incorrect
• the dollar amount of the additional spending. Incorrect
• considered only if additional taxes need to be raised to fund the spending. Incorrect
• measured in terms of the best alternative uses for that
money. (True Answer )Correct
32 Khalil is offered a free ticket to the opera. His opportunity cost of going to the opera is:
• zero—the tickets were free. Incorrect
• the price listed on the ticket. Incorrect
• whatever Khalil would have done had he not gone to the opera. (True Answer )Correct
• the price listed on the ticket or whatever Khalil would have
done had he not gone to the opera. Incorrect
33 The cost of leaving the skating championship before it ends is
, while the cost of staying for the entire match is
.
• the opportunity cost of not seeing the perfect “10” performance that happens; zero—the ticket to the championship is already paid, so there is no cost Incorrect
• the opportunity cost of not seeing the perfect “10” performance that happens; the opportunity cost of what else you could have done during that time (True Answer )Correct
• zero—you don't have to pay to leave; zero—the ticket to the
match is already paid so there is no cost Incorrect
• the cost of the ticket; the cost of the ticket Incorrect
34 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. Incorrect
• $260. Incorrect
• whatever she would have done with those 48 hours. (True
Answer )Correct
• The cost is impossible to determine. Incorrect
35 The local Taco Hut charges the same price for everything on its menu: $3 will buy a taco, a burrito, or nachos. You buy the taco and think that if you had not purchased the taco, you would have purchased the burrito. The opportunity cost of the taco is:
• the $3. Incorrect
• your enjoyment of the burrito. (True Answer )Correct
• the $3 and your enjoyment of the burrito. Incorrect
• the $3, your enjoyment of the burrito, and your enjoyment of the nachos. Incorrect
36 For an economist, the cost of something is:
• the amount of money you paid for it. Incorrect
• what you gave up to get it. (True Answer )Correct
• always equal to its market value. Incorrect
• the quantity of resources used to produce it. Incorrect
37 The best measure of the opportunity cost of any choice is:
• the monetary cost of that choice. Incorrect
• whatever you have given up to make that choice, even if no monetary costs are involved. (True Answer )Correct
• the cost associated with not taking full advantage of the
opportunity offered by that choice. Incorrect
• your hourly wage. Incorrect
38 While buying refreshments for an upcoming party, you notice that a six-pack of Americana Beer costs $2 and a six-pack of Bavarian Beer costs $4. You buy the six-pack of Bavarian Beer, although you wonder if maybe two six-packs of Americana Beer would have been a better choice. The opportunity cost of the Bavarian Beer is:
• the $4. Incorrect
• a six-pack of Americana Beer. Incorrect
• two six-packs of Americana Beer. (True Answer )Correct
• the $4 and the six-pack of Americana Beer. Incorrect
39 Your elderly grandma tells you: “I haven't been taking my beloved walks because I'm concerned about falling and getting
hurt. See, there is always a cost to doing something. But if you don't do anything, then there is no cost.” Your grandma does not understand the concept of:
• scarcity in economics. Incorrect
• efficiency in economics. Incorrect
• opportunity cost in economics. (True Answer )Correct
• marginal analysis in economics. Incorrect
40 The cost of leaving a championship soccer match before it ends is , while the cost of staying for the entire match is
.
• the 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 cost Incorrect
• the opportunity cost of not seeing the winning goal with two
minutes to go; the opportunity cost of what else you could have done during that time (True Answer )Correct
• zero—you don't have to pay to leave; zero—the ticket to the
match is already paid so there is no cost Incorrect
• the cost of the ticket; also the cost of the ticket Incorrect
41 Zoe's grandparents are excited about finally paying off their mortgage, because, as they say, “Our cost of housing is now zero.” Zoe should explain to them the economic principle of:
• marginal analysis: if the additional cost of housing is zero, then their additional benefit is also zero. Incorrect
• opportunity cost: by living in the house, they are giving up the opportunity to sell the house, buy a smaller one, and pocket the difference. (True Answer )Correct
• efficiency: if their cost of housing is now zero, they should let Zoe move in without charging her any rent. Zoe is better off, and her grandparents aren't hurt. Incorrect
• equity: it is unfair that some people are still paying off their
mortgage. Incorrect
42 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. Incorrect
• the original cost of building the mansion Incorrect
• the amount the university would receive if it sold the mansion. (True Answer )Correct
• the cost of catering the parties at the mansion Incorrect
43 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. Incorrect
• just the cost of food while you wait in line. Incorrect
• the cost of food while you wait in line and the opportunity cost of your time. (True Answer )Correct
• the actual value of the ticket. Incorrect
44 A friend comes up to you and offers to give you a free ticket to the local professional team's baseball game that night. You decide to attend the game. The game takes five hours and costs you $15 for transportation. If you had not attended the game, you would have worked at your part-time job for $8 an hour. What is the cost to you of attending the game?
• The cost is zero—the ticket is free. Incorrect
• $65 Incorrect
• $40 Incorrect
• $55 (True Answer )Correct
45 The cost of going to college is:
• tuition and the cost of housing. Incorrect
• tuition, the cost of housing, and the cost of books. Incorrect
• tuition, the cost of books, and forgone income. (True Answer
)Correct
• forgone income only. Incorrect
46 You have $1 to spend on a vending machine snack. A bag of chips will cost you $1 and the candy bar will also cost you $1. If you choose the bag of chips, the opportunity cost of buying the chips is:
• $1 plus the enjoyment you would have received from the candy bar. Incorrect
• $2 minus the enjoyment you received from the bag of
chips. Incorrect
• $1. Incorrect
• the enjoyment you would have received from the candy
bar. (True Answer )Correct
47 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. (True Answer )Correct
• $6. Incorrect
• $13. Incorrect
• $0. Incorrect
48 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. (True Answer )Correct
• “How much” is a decision at the margin. Incorrect
• People usually exploit opportunities to make themselves better off. Incorrect
• There are gains from trade. Incorrect
49 You decide to join the economics club, but this means you can't join the accounting club because it meets at the same time. This statement best represents this economic concept:
• The real cost of something is what you must give up to get it. (True Answer )Correct
• “How much” is a decision at the margin. Incorrect
• People usually exploit opportunities to make themselves better off. Incorrect
• There are gains from trade. Incorrect
50 The student center on campus has burritos, bagels, or burgers for lunch, and they all cost the same. You decide to have a burger today, but if they were out of burgers, you would have bought a bagel. Your opportunity cost is:
• your enjoyment of the burger. Incorrect
• your enjoyment of the bagel. (True Answer )Correct
• your enjoyment of the burrito. Incorrect
• your enjoyment of the bagel and burrito. Incorrect
51 The economic way of thinking uses:
• the analysis of benefits but not costs. Incorrect
• the analysis of costs but not benefits. Incorrect
• making choices at the margin. (True Answer )Correct
• making the distinction between microeconomics and macroeconomics. Incorrect
52 A choice made _ is a choice whether to do a little more or a little less of something.
• at the front end Incorrect
• in the beginning Incorrect
• at the margin (True Answer )Correct
• ceteris paribus Incorrect
53 Which of the following is the best example of making a choice at the margin?
• buying a new car Incorrect
• quitting your job Incorrect
• drinking another cup of coffee (True Answer )Correct
• attending college Incorrect
54 You decide whether to eat one more slice of pizza based on how hungry you feel. This statement best represents this economic concept:
• resources are scarce. Incorrect
• the real cost of something is what you must give up to get it. Incorrect
• “How much” is a decision at the margin. (True Answer
)Correct
• there are gains from trade. Incorrect
55 The concept of the margin deals with:
• making incremental choices. (True Answer )Correct
• all or none of something. Incorrect
• engaging in unethical activities. Incorrect
• making difficult choices. Incorrect
56 A choice made _ is a choice whether to do a little more or a little less of something.
• at the fringe Incorrect
• in the beginning Incorrect
• at the margin (True Answer )Correct
• after the fact Incorrect
57 The best example of making a choice at the margin is:
• buying a new computer. Incorrect
• quitting your job. Incorrect
• eating another slice of pizza. (True Answer )Correct
• attending college. Incorrect
58 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. (True Answer )Correct
• values an hour of studying less than the $10 she would earn
tutoring. Incorrect
• does not understand that there is no benefit from studying. Incorrect
• doesn't need the money. Incorrect [Show Less]