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Exam 1: Economics and Life

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Question 41

Multiple Choice

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Jimmy is invited to a costume party with a 1990s theme. His first thought is to dress up as MC Hammer, but he is also considering going as a lifeguard from Baywatch. The opportunity cost of arriving dressed like MC Hammer is:

A) the cost of purchasing parachute pants like those MC Hammer would wear.
B) the money he saves since he doesn't need to purchase red swimming trunks.
C) the enjoyment he would have received if he had dressed as a lifeguard.
D) There is no opportunity cost because he was going to attend the party either way.

E) A) and D)
F) All of the above

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Question 42

Multiple Choice

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You decide to drive your car on a long road trip of 1,500 miles. The opportunity cost of driving your car:

A) is only the amount of money spent on gas.
B) is zero, because the car is paid for.
C) includes lost wages you could have earned instead of driving.
D) equals the total expenses of the trip.

E) All of the above
F) A) and B)

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Question 43

Multiple Choice

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Which of the following is considered a microeconomic issue?

You read a news article that states "More people purchase ChapStick after the weather report predicts a windy week." Which of the following statements is true?

If Johnny weren't in economics class this morning, he'd be sleeping. The value Johnny places on sleeping represents his:

A university posts a notice that anyone who registers for classes after the deadline will be charged an additional $30 fee. This is an example of:

How should we best approach the issue of scarcity?

The drug approval process regulated by the Federal Drug Administration (FDA) slows the pace at which helpful medications reach the marketplace. The alternative of having the medication available to consumers earlier is an example of:

Something is valuable if:

Muhammad Yunus, founder of the Grameen bank, was highly successful in his use of applying social incentives through group responsibility in order to maximize loan repayment rates. This success created an incentive for other banks to:

Suppose a salon owner notices that their pedicures are very popular with customers. The owner decides to double of the price of the pedicure in order to raise more revenue. Which of the following statements is most likely to be true?

Cameron can spend his weekend afternoon doing one of three things: playing golf, driving his boat, or cleaning his house. Although he enjoys golfing, he sometimes becomes frustrated when playing so he decides to enjoy a more relaxing afternoon on his boat. Cameron never really considered the idea of cleaning the house, but he did give playing golf some serious thought. Cameron's opportunity cost of driving the boat is:

Which of the following statements best describes the study of economics?

Aria purchases a coffee cup from her local gas station for $5.00 that can be refilled at any time for $0.50. Economists would say that the $5.00 she spent on the cup is:

Muhammad Yunus revolutionized banking in Bangladesh by issuing loans using group responsibility. This change to group responsibility:

A resource is:

The two broad fields that make up the subject of economics are:

The problem of having unlimited wants under the constraint of limited resources describes:

The sentence "The United States should adopt more open trade policies because they historically have caused increased economic growth." is an example of a(n) ______ statement.

Scarcity can best be defined as a situation in which: