Question 1

The opportunity cost of an item is:

Accepted Answer

A)  greater during periods of inflation and lower during periods of deflation.
B)  the highest valued alternative you give up to get that item.
C)  the value of all available alternatives you sacrifice to get that item.
D)  always equal to the dollar value of the item.
E)  always less than the dollar value of the item.F) B) and D)
G) B) and C)

Question 2

The fallacy of composition states that even if something is true for an individual, it is not necessarily true for many individuals as a group.

Accepted Answer

A) True 
 B)False

Question 3

If people follow the rule of rational choice they will choose options that they think will:

Accepted Answer

A)  create more average benefits than average costs
B)  create more additional costs than additional benefits
C)  create equivalent additional benefits and additional costs
D)  create more additional benefits than additional costsE) All of the above
F) A) and B)

Question 4

Tom is a castaway who washes up on a remote island.He can kill eight birds per hour or catch ten fish per day.The natives on the island can kill ten birds per day or catch twenty fish per day.The natives have a comparative advantage in:

Accepted Answer

A)  hunting birds.
B)  fishing.
C)  both hunting birds and fishing
D)  neither hunting birds or fishing.E) All of the above
F) A) and B)

Question 5

A country has a comparative advantage in the production of DVD players if it can produce DVD players at a lower opportunity cost than others.

Accepted Answer

A) True 
 B)False

Question 6

The opportunity cost of attending college is likely higher for a high school graduate who leaves a job grilling hamburgers than it is for a high school dropout who leaves a job working as a computer network administrator.

Accepted Answer

A) True 
 B)False

Question 7

Define what a market is and provide three examples of where a market can be found.

Accepted Answer

A market is the process of buyers and se...

Question 8

Despite the warning on a package of cigarettes about the potential health hazards of smoking, a man lights up a cigarette.An economist would conclude that:

Accepted Answer

A)  in the man's judgment, the expected marginal cost of smoking the cigarette outweighs the expected marginal benefit.
B)  the man is behaving irrationally.
C)  the smoker is unconcerned about his future health.
D)  in the man's judgment, the expected marginal benefit of smoking the cigarette outweighs the expected marginal cost.
E)  smoking should be banned by the government in order to ensure the safety of smokers.F) C) and E)
G) A) and B)

Question 9

Ted has decided to buy a burger and fries at a restaurant, but is considering whether to buy a drink as well.If the price of a burger is $2, fries are $1, drinks are $1, but a value meal with all three costs $3.80, the marginal cost to Ted of the drink is:

Accepted Answer

A)  $0.20
B)  $0.80
C)  $1.00
D)  $3.80
E)  impossible to determine from the above information.F) A) and C)
G) A) and B)

Question 10

The marginal benefit of a slice of pizza is the:

Accepted Answer

A)  maximum amount that a consumer is willing to pay for the slice.
B)  total amount that a consumer is willing to pay for a whole pizza, divided by the number of slices.
C)  difference between the value of the slice to the consumer and the price of the slice.
D)  price of the slice of pizza.E) All of the above
F) B) and D)

Question 11

Which of the following would be likely to raise your opportunity cost of attending a big basketball game this Sunday night?

Accepted Answer

A)  A friend calls you up and offers you free tickets to a concert by one of your favorite bands on Sunday night.
B)  Your employer offered you double your usual wage to work this Sunday night.
C)  Late Friday afternoon, your physics professor makes a surprise announcement that there will be a major exam on Monday morning.
D)  All of the above would likely raise the opportunity cost of attending the game.E) None of the above
F) B) and C)

Question 12

The additional cost incurred as a result of undertaking an action is:

Accepted Answer

A)  the opportunity benefit.
B)  the marginal benefit.
C)  the total cost.
D)  the gross cost.
E)  the marginal cost.F) B) and D)
G) C) and D)

Exam 2: The Economic Way of Thinking

The opportunity cost of attending college is likely higher for a high school graduate who leaves a job grilling hamburgers than it is for a high school dropout who leaves a job working as a computer network administrator.

Correct Answer
verified

If people follow the rule of rational choice they will choose options that they think will:

Correct Answer
verified

A country has a comparative advantage in the production of DVD players if it can produce DVD players at a lower opportunity cost than others.

Correct Answer
verified

Tom is a castaway who washes up on a remote island.He can kill eight birds per hour or catch ten fish per day.The natives on the island can kill ten birds per day or catch twenty fish per day.The natives have a comparative advantage in:

Correct Answer
verified

Which of the following would be likely to raise your opportunity cost of attending a big basketball game this Sunday night?

Correct Answer
verified

The fallacy of composition states that even if something is true for an individual, it is not necessarily true for many individuals as a group.

Correct Answer
verified

Ted has decided to buy a burger and fries at a restaurant, but is considering whether to buy a drink as well.If the price of a burger is $2, fries are $1, drinks are $1, but a value meal with all three costs $3.80, the marginal cost to Ted of the drink is:

Correct Answer
verified

The additional cost incurred as a result of undertaking an action is:

Correct Answer
verified

Despite the warning on a package of cigarettes about the potential health hazards of smoking, a man lights up a cigarette.An economist would conclude that:

Correct Answer
verified

Define what a market is and provide three examples of where a market can be found.

Correct Answer
verified
A market is the process of buyers and se...
View Answer

The marginal benefit of a slice of pizza is the:

Correct Answer
verified

The opportunity cost of an item is:

Correct Answer
verified

Exam 2: The Economic Way of Thinking

The opportunity cost of attending college is likely higher for a high school graduate who leaves a job grilling hamburgers than it is for a high school dropout who leaves a job working as a computer network administrator.

Correct AnswerverifiedShow Answer

If people follow the rule of rational choice they will choose options that they think will:

Correct AnswerverifiedShow Answer

A country has a comparative advantage in the production of DVD players if it can produce DVD players at a lower opportunity cost than others.

Correct AnswerverifiedShow Answer

Tom is a castaway who washes up on a remote island.He can kill eight birds per hour or catch ten fish per day.The natives on the island can kill ten birds per day or catch twenty fish per day.The natives have a comparative advantage in:

Correct AnswerverifiedShow Answer

Which of the following would be likely to raise your opportunity cost of attending a big basketball game this Sunday night?

Correct AnswerverifiedShow Answer

The fallacy of composition states that even if something is true for an individual, it is not necessarily true for many individuals as a group.

Correct AnswerverifiedShow Answer

Ted has decided to buy a burger and fries at a restaurant, but is considering whether to buy a drink as well.If the price of a burger is $2, fries are $1, drinks are $1, but a value meal with all three costs $3.80, the marginal cost to Ted of the drink is:

Correct AnswerverifiedShow Answer

The additional cost incurred as a result of undertaking an action is:

Correct AnswerverifiedShow Answer

Despite the warning on a package of cigarettes about the potential health hazards of smoking, a man lights up a cigarette.An economist would conclude that:

Correct AnswerverifiedShow Answer

Define what a market is and provide three examples of where a market can be found.

Correct AnswerverifiedA market is the process of buyers and se...View AnswerShow Answer

The marginal benefit of a slice of pizza is the:

Correct AnswerverifiedShow Answer

The opportunity cost of an item is:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
A market is the process of buyers and se...
View Answer

Correct Answer
verified

Correct Answer
verified