Question 1

Basically, the marginal principle helps us to evaluate the factors involved in taking an action or if doing something is worth the effort.

Accepted Answer

A) True 
 B)False  True

Question 2

If a company's total costs per day increase from $200 to $400 by adding another worker, but its additional benefits are $300, it is sensible to add that additional worker.

Accepted Answer

A) True 
 B)False  True

Question 3

-Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that we observe Joe staying open 3 hours per day. If he is following the marginal principle, what must his marginal cost per hour be?

Accepted Answer

A)  $24 
B)  $32 
C)  $40 
D)  $48 
A)  $24 
B)  $32 
C)  $40 
D)  $48 D

Question 4

Points outside the production possibilities curve represent combinations of products that are

Accepted Answer

A)  attainable only if the economy's resources are fully employed. 
B)  attainable only if the economy's resources are not fully employed. 
C)  attainable if the economy's resources are either fully employed or not fully employed. 
D)  unattainable. 
A)  attainable only if the economy's resources are fully employed. 
B)  attainable only if the economy's resources are not fully employed. 
C)  attainable if the economy's resources are either fully employed or not fully employed. 
D)  unattainable.

Question 5

The principle that states that what matters to people is the real value or purchasing power of money is the

Accepted Answer

A)  marginal principle. 
B)  principle of diminishing returns. 
C)  spillover principle. 
D)  real-nominal principle. 
A)  marginal principle. 
B)  principle of diminishing returns. 
C)  spillover principle. 
D)  real-nominal principle.

Question 6

What is the opportunity cost of investing $10,000 of your own money in a business you wish to start?

Accepted Answer

The opportunity cost of your $

Question 7

If an economy is fully utilizing its resources, it can produce more of one product only if it

Accepted Answer

A)  doubles manufacturing of the product. 
B)  produces less of another product. 
C)  adds more people to the labor force. 
D)  reduces the prices of the most expensive products. 
A)  doubles manufacturing of the product. 
B)  produces less of another product. 
C)  adds more people to the labor force. 
D)  reduces the prices of the most expensive products.

Question 8

If product prices decrease more than nominal wages decrease, the real value of wages will increase.

Accepted Answer

A) True 
 B)False

Question 9

Use the marginal principle to explain why government mandated safety features in automobiles during the 1960s and 1970s resulted in an increase in collisions between automobiles and bicycles.

Accepted Answer

The mandated safety features decreased t

Question 10

What matters to people is the real value of money or income.

Accepted Answer

A) True 
 B)False

Question 11

-Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that Joe's marginal cost of staying open per hour is $32. How many hours should Joe stay open?

Accepted Answer

A)  4 hours 
B)  5 hours 
C)  6 hours 
D)  7 hours 
A)  4 hours 
B)  5 hours 
C)  6 hours 
D)  7 hours

Question 12

According to the possible trade-off example between warships and drinking water in the text, the policy question that should be considered in Malaysia is

Accepted Answer

A)  do the opportunity costs of the warships exceed their nominal costs? 
B)  do the nominal costs of the warships exceed their real costs? 
C)  do the benefits of the warships exceed their opportunity costs? 
D)  do the real costs of the warships exceed their nominal costs? 
A)  do the opportunity costs of the warships exceed their nominal costs? 
B)  do the nominal costs of the warships exceed their real costs? 
C)  do the benefits of the warships exceed their opportunity costs? 
D)  do the real costs of the warships exceed their nominal costs?

Question 13

Table 2.4
-Refer to Table 2.4. The principle of diminishing returns sets in with the addition of the ________ tank of fertilizer.

Accepted Answer

A)  second 
B)  third 
C)  fourth 
D)  fifth 
A)  second 
B)  third 
C)  fourth 
D)  fifth

Question 14

Suppose that your tuition to attend college is $24,000 per year and you spend $8,000 per year on room and board. If you were working full time, you could earn $30,000 per year. What is your opportunity cost of attending college for one year?

Accepted Answer

A)  $32,000 
B)  $38,000 
C)  $54,000 
D)  $62,000 
A)  $32,000 
B)  $38,000 
C)  $54,000 
D)  $62,000

Question 15

The marginal principle implies that an individual should produce or consume where

Accepted Answer

A)  marginal benefit exceeds marginal cost. 
B)  marginal benefit is less than marginal cost. 
C)  marginal benefit equals marginal cost. 
D)  total benefit equals total cost. 
A)  marginal benefit exceeds marginal cost. 
B)  marginal benefit is less than marginal cost. 
C)  marginal benefit equals marginal cost. 
D)  total benefit equals total cost.

Question 16

If real salaries increase but nominal salaries do not, this means that

Accepted Answer

A)  the purchasing power of money has decreased. 
B)  prices have not changed. 
C)  prices have risen. 
D)  prices have fallen. 
A)  the purchasing power of money has decreased. 
B)  prices have not changed. 
C)  prices have risen. 
D)  prices have fallen.

Question 17

Tradeoffs involve an exchange of one thing for another because resources are limited and can be used in different ways.

Accepted Answer

A) True 
 B)False

Question 18

A principle is a self-evident truth that most people readily understand and accept.

Accepted Answer

A) True 
 B)False

Question 19

Table 2.1
-Kaitlyn and Larissa have formed a dog bathing and grooming business business. The number of dogs they can bathe or groom in any given day is depicted in Table 2.1. The opportunity cost of grooming the sixth dog in a day is bathing ________ dog(s).

Accepted Answer

A)  0 
B)  5 
C)  6 
D)  7 
A)  0 
B)  5 
C)  6 
D)  7

Question 20

The opportunity cost of going to college

Accepted Answer

A)  is zero if your parents pay your tuition. 
B)  is equal to the cost of tuition, room and board, and other expenses. 
C)  includes wages you lose by going to school instead of working. 
D)  is the same for all students at a particular school who pay full tuition. 
A)  is zero if your parents pay your tuition. 
B)  is equal to the cost of tuition, room and board, and other expenses. 
C)  includes wages you lose by going to school instead of working. 
D)  is the same for all students at a particular school who pay full tuition.

Basically, the marginal principle helps us to evaluate the factors involved in taking an action or if doing something is worth the effort.

If a company's total costs per day increase from $200 to $400 by adding another worker, but its additional benefits are $300, it is sensible to add that additional worker.

-Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that we observe Joe staying open 3 hours per day. If he is following the marginal principle, what must his marginal cost per hour be?

Points outside the production possibilities curve represent combinations of products that are

The principle that states that what matters to people is the real value or purchasing power of money is the

What is the opportunity cost of investing $10,000 of your own money in a business you wish to start?

If an economy is fully utilizing its resources, it can produce more of one product only if it

If product prices decrease more than nominal wages decrease, the real value of wages will increase.

Use the marginal principle to explain why government mandated safety features in automobiles during the 1960s and 1970s resulted in an increase in collisions between automobiles and bicycles.

What matters to people is the real value of money or income.

-Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that Joe's marginal cost of staying open per hour is $32. How many hours should Joe stay open?

According to the possible trade-off example between warships and drinking water in the text, the policy question that should be considered in Malaysia is

Table 2.4 -Refer to Table 2.4. The principle of diminishing returns sets in with the addition of the ________ tank of fertilizer.

Suppose that your tuition to attend college is $24,000 per year and you spend $8,000 per year on room and board. If you were working full time, you could earn $30,000 per year. What is your opportunity cost of attending college for one year?

The marginal principle implies that an individual should produce or consume where

If real salaries increase but nominal salaries do not, this means that

Tradeoffs involve an exchange of one thing for another because resources are limited and can be used in different ways.

A principle is a self-evident truth that most people readily understand and accept.

Table 2.1 -Kaitlyn and Larissa have formed a dog bathing and grooming business business. The number of dogs they can bathe or groom in any given day is depicted in Table 2.1. The opportunity cost of grooming the sixth dog in a day is bathing ________ dog(s).

The opportunity cost of going to college

Introduction: What Is Economics

Demand, Supply, and Market Equilibrium

Elasticity: A Measure of Responsiveness

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry, Monopolistic Competition, and Oligopoly

Imperfect Information, External Benefits, and External Costs

The Labor Market and the Distribution of Income

Measuring a Nations Production and Income

Unemployment and Inflation

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and the Banking System

Monetary Policy and Inflation

International Trade and Finance

Filters

Exam 2: The Key Principles of Economics

Basically, the marginal principle helps us to evaluate the factors involved in taking an action or if doing something is worth the effort.

If a company's total costs per day increase from $200 to $400 by adding another worker, but its additional benefits are $300, it is sensible to add that additional worker.

-Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that we observe Joe staying open 3 hours per day. If he is following the marginal principle, what must his marginal cost per hour be?

Points outside the production possibilities curve represent combinations of products that are

The principle that states that what matters to people is the real value or purchasing power of money is the

What is the opportunity cost of investing $10,000 of your own money in a business you wish to start?

If an economy is fully utilizing its resources, it can produce more of one product only if it

If product prices decrease more than nominal wages decrease, the real value of wages will increase.

Use the marginal principle to explain why government mandated safety features in automobiles during the 1960s and 1970s resulted in an increase in collisions between automobiles and bicycles.

What matters to people is the real value of money or income.

-Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that Joe's marginal cost of staying open per hour is $32. How many hours should Joe stay open?

According to the possible trade-off example between warships and drinking water in the text, the policy question that should be considered in Malaysia is

Table 2.4 -Refer to Table 2.4. The principle of diminishing returns sets in with the addition of the ________ tank of fertilizer.

Suppose that your tuition to attend college is $24,000 per year and you spend $8,000 per year on room and board. If you were working full time, you could earn $30,000 per year. What is your opportunity cost of attending college for one year?

The marginal principle implies that an individual should produce or consume where

If real salaries increase but nominal salaries do not, this means that

Tradeoffs involve an exchange of one thing for another because resources are limited and can be used in different ways.

A principle is a self-evident truth that most people readily understand and accept.

Table 2.1 -Kaitlyn and Larissa have formed a dog bathing and grooming business business. The number of dogs they can bathe or groom in any given day is depicted in Table 2.1. The opportunity cost of grooming the sixth dog in a day is bathing ________ dog(s).

The opportunity cost of going to college

Introduction: What Is Economics

Demand, Supply, and Market Equilibrium

Elasticity: A Measure of Responsiveness

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry, Monopolistic Competition, and Oligopoly

Imperfect Information, External Benefits, and External Costs

The Labor Market and the Distribution of Income

Measuring a Nations Production and Income

Unemployment and Inflation

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and the Banking System

Monetary Policy and Inflation

International Trade and Finance

Filters