Question 1

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. 
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.

Question 2

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. 
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.

Question 3

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

Question 4

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 costs 
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 costs

Question 5

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. 
A) hunting birds. 
B) fishing. 
C) both hunting birds and fishing 
D) neither hunting birds or fishing.

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

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. 
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.

Question 8

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 9

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. 
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.

Question 10

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

Question 11

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 12

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

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:

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

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

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

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:

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.

The marginal benefit of a slice of pizza is the:

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.

The opportunity cost of an item is:

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:

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

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.

The Role and Method of Economics

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

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Exam 2: The Economic Way of Thinking

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:

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

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

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

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:

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.

The marginal benefit of a slice of pizza is the:

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.

The opportunity cost of an item is:

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:

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

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.

The Role and Method of Economics

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

Filters