Question 1

The marginal cost of an activity is the

Accepted Answer

A)  change in the costs of the activity divided by the change in the level of the activity. 
B)  same as the total costs of the activity. 
C)  ratio of total costs to the level of the activity. 
D)  change in the level of the activity divided by the change in the costs of the activity. 
E)  reservation costs.

Question 2

Class attendance today is nearly 100%,but on most other days it is less.The likely explanation for this would be

Accepted Answer

A)  the opportunity cost of not attending today is much higher than usual. 
B)  random chance. 
C)  everything on TV was a rerun. 
D)  students thought today's class was a review. 
E)  the opportunity cost of attending today is much higher than usual.

Question 3

The following table provides the costs (Cost A and Cost B)and the benenfits associated with each unit of activity
-The average benefit of 5 units of activity is

Accepted Answer

A)  $41. 
B)  $50. 
C)  $60. 
D)  $75. 
E)  $100.

Question 4

The scarcity problem indicates that

Accepted Answer

A)  no matter how much one has,it is never enough. 
B)  compared to 100 years ago,individuals have less time today. 
C)  with limited resources,having more of "this" means having less of "that." 
D)  because trade-offs must be made,resources are therefore scarce. 
E)  the wealthier a person is,the fewer trade-offs he must makE.

Question 5

The study of macroeconomics includes

Accepted Answer

A)  the choices made by individual consumers. 
B)  the production decisions of firms. 
C)  the causes of poverty. 
D)  the determinants of the national unemployment rate. 
E)  individual markets.

Question 6

The scarcity problem refers to the fact that

Accepted Answer

A)  consumers do not have to make choices. 
B)  consumers have limited wants in the face of unlimited resources. 
C)  there are not many products available to consumers. 
D)  consumers have unlimited needs and wants,but there are limited resources. 
E)  there are unlimited resources available so consumers never have to make choices.

Question 7

The following table provides the costs (Cost A and Cost B)and the benenfits associated with each unit of activity
-The additional cost of consuming three rather than two units of activity is

Accepted Answer

A)  $10. 
B)  $20. 
C)  $30. 
D)  $40. 
E)  $50.

Question 8

The following table shows the relationship between the speed of a computer's CPU and the benefits and costs.Assume that all other features of the computer are the same,i.e. ,CPU speed is the only source of variation.
 
-The total cost of a 2 GHz computer is

Accepted Answer

A)  $1,000. 
B)  $900. 
C)  $300. 
D)  $200. 
E)  $100.

Question 9

-The marginal labour cost (extra labour cost)of the 4th employee is

Accepted Answer

A)  $9,500. 
B)  $10,000. 
C)  $10,750. 
D)  $11,000. 
E)  $12,000.

Question 10

To avoid spurious correlation,one must recognize that

Accepted Answer

A)  what is true for a part must also be true for the whole. 
B)  what is true for a part is not necessarily true for the whole. 
C)  because two variables move together,one causes the other. 
D)  because two variables move together,one does not necessarily causes the other. 
E)  correlation implies causation.

Question 11

Dillon purchased his nonrefundable,nontransferable ticket to see the M.C.Hammer/Vanilla Ice Career Revival show for $30 last week;Bob has yet to buy his ticket,but wants to go.In deciding whether to go to the show,the price of the ticket is a __________ to Dillon and a __________ to Bob.

Accepted Answer

A)  sunk cost;sunk cost 
B)  relevant cost;irrelevant cost 
C)  sunk cost;relevant cost 
D)  marginal cost;opportunity cost 
E)  irrelevant cost;relevant cost

Question 12

The following table provides the costs (Cost A and Cost B)and the benenfits associated with each unit of activity
 
-If the activity in question is yearly fishing trips,which of the following is the most appropriate example of Cost A?

Accepted Answer

A)  Worms and tackle for fishing. 
B)  Expenses,such as gasoline,for car trips. 
C)  Food and drinks bought during trips. 
D)  An annual fishing licence. 
E)  Hourly wages on hired help for launching the boat each trip for the year.

Question 13

The following table shows the total benefit from painting 0,1,2,3,or 4 rooms in a home.
 
-What is the marginal benefit of painting the third room?

Accepted Answer

A)  $0. 
B)  $200. 
C)  $300. 
D)  $400. 
E)  $500.

Question 14

The following table shows the relationship between the speed of a computer's CPU and the benefits and costs.Assume that all other features of the computer are the same,i.e. ,CPU speed is the only source of variation.
 
-Choosing the 5 GHz computer would be inefficient because

Accepted Answer

A)  the extra benefit is less than the extra cost. 
B)  the extra benefit is equal to the extra cost. 
C)  it is impossible to tell the difference compared to a 1 GHz computer. 
D)  it will be surpassed by a 6 GHz computer very soon. 
E)  the total cost exceeds the total benefit.

Question 15

-The least important cost(s)in deciding the fate of the project is the

Accepted Answer

A)  research and development expenditures to date. 
B)  interest payments. 
C)  salaries for engineers. 
D)  salaries for support staff. 
E)  materials.

Question 16

Sharon,a marketing major,has her first economics test and her first finance test to take tomorrow and she has four hours tonight to allocate to studying the two subjects.The data below show her scores on the two tests based on the time spent studying.(Hint: Studying economics for 0 hours means studying finance for 4 hours. )
 
-The sequence of marginal benefits from the 1st to the 4th hour of economics studying is

Accepted Answer

A)  12,4.5,1,-5. 
B)  77,86,89,91. 
C)  26,14,5,2. 
D)  12,21,24,26. 
E)  12,9,3,2.

Question 17

Dividing the total benefit of N units of an activity by N quantifies the

Accepted Answer

A)  average benefit. 
B)  marginal benefit. 
C)  average cost. 
D)  units per benefit. 
E)  additional benefit.

Question 18

Which of the following is a macroeconomic statement?

Accepted Answer

A)  Severe drought in the prairies has increased the price of wheat. 
B)  Technological improvements have lowered prices in the automobile industry. 
C)  The provincial government of British Columbia has increased tuition fees. 
D)  The unemployment rate in Canada is expected to decline over the next two years. 
E)  Hurricanes in Florida lead to greater exports of soft wood lumber from Canada to the U.S.

Question 19

The opportunity cost of any activity is defined as

Accepted Answer

A)  the value of the least best alternative activity forgone. 
B)  the time one spends involved in the activity. 
C)  the value of the next best alternative activity forgone. 
D)  the income one spends on the activity. 
E)  the value of some unspecified alternative activity forgonE.

Question 20

Cost-benefit analysis can help to shed light in the decision-making process

Accepted Answer

A)  even if we can at times describe costs and benefits in vague qualitative form only. 
B)  even if we have absolutely no information at all. 
C)  only if we know the precise dollar value of all costs and benefits. 
D)  only if we know the maximum dollar value of all costs and benefits. 
E)  only if we have information on all the relevant market data.

Exam 1: Measuring Macroeconomic Performance: Output and Prices

The marginal cost of an activity is the

Class attendance today is nearly 100%,but on most other days it is less.The likely explanation for this would be

The following table provides the costs (Cost A and Cost B) and the benenfits associated with each unit of activity -The average benefit of 5 units of activity is

The scarcity problem indicates that

The study of macroeconomics includes

The scarcity problem refers to the fact that

The following table provides the costs (Cost A and Cost B) and the benenfits associated with each unit of activity -The additional cost of consuming three rather than two units of activity is

The following table shows the relationship between the speed of a computer's CPU and the benefits and costs.Assume that all other features of the computer are the same,i.e. ,CPU speed is the only source of variation. -The total cost of a 2 GHz computer is

-The marginal labour cost (extra labour cost) of the 4^th employee is

To avoid spurious correlation,one must recognize that

Dillon purchased his nonrefundable,nontransferable ticket to see the M.C.Hammer/Vanilla Ice Career Revival show for $30 last week;Bob has yet to buy his ticket,but wants to go.In deciding whether to go to the show,the price of the ticket is a to Dillon and a to Bob.

The following table provides the costs (Cost A and Cost B) and the benenfits associated with each unit of activity -If the activity in question is yearly fishing trips,which of the following is the most appropriate example of Cost A?

The following table shows the total benefit from painting 0,1,2,3,or 4 rooms in a home. -What is the marginal benefit of painting the third room?

The following table shows the relationship between the speed of a computer's CPU and the benefits and costs.Assume that all other features of the computer are the same,i.e. ,CPU speed is the only source of variation. -Choosing the 5 GHz computer would be inefficient because

-The least important cost(s) in deciding the fate of the project is the

Dividing the total benefit of N units of an activity by N quantifies the

Which of the following is a macroeconomic statement?

The opportunity cost of any activity is defined as

Cost-benefit analysis can help to shed light in the decision-making process

Exam 1: Measuring Macroeconomic Performance: Output and Prices

The marginal cost of an activity is the

Class attendance today is nearly 100%,but on most other days it is less.The likely explanation for this would be

The following table provides the costs (Cost A and Cost B) and the benenfits associated with each unit of activity -The average benefit of 5 units of activity is

The scarcity problem indicates that

The study of macroeconomics includes

The scarcity problem refers to the fact that

The following table provides the costs (Cost A and Cost B) and the benenfits associated with each unit of activity -The additional cost of consuming three rather than two units of activity is

The following table shows the relationship between the speed of a computer's CPU and the benefits and costs.Assume that all other features of the computer are the same,i.e. ,CPU speed is the only source of variation. -The total cost of a 2 GHz computer is

-The marginal labour cost (extra labour cost) of the 4th employee is

To avoid spurious correlation,one must recognize that

Dillon purchased his nonrefundable,nontransferable ticket to see the M.C.Hammer/Vanilla Ice Career Revival show for $30 last week;Bob has yet to buy his ticket,but wants to go.In deciding whether to go to the show,the price of the ticket is a __________ to Dillon and a __________ to Bob.

The following table provides the costs (Cost A and Cost B) and the benenfits associated with each unit of activity -If the activity in question is yearly fishing trips,which of the following is the most appropriate example of Cost A?

The following table shows the total benefit from painting 0,1,2,3,or 4 rooms in a home. -What is the marginal benefit of painting the third room?

The following table shows the relationship between the speed of a computer's CPU and the benefits and costs.Assume that all other features of the computer are the same,i.e. ,CPU speed is the only source of variation. -Choosing the 5 GHz computer would be inefficient because

-The least important cost(s) in deciding the fate of the project is the

Dividing the total benefit of N units of an activity by N quantifies the

Which of the following is a macroeconomic statement?

The opportunity cost of any activity is defined as

Cost-benefit analysis can help to shed light in the decision-making process

-The marginal labour cost (extra labour cost) of the 4^th employee is

Dillon purchased his nonrefundable,nontransferable ticket to see the M.C.Hammer/Vanilla Ice Career Revival show for $30 last week;Bob has yet to buy his ticket,but wants to go.In deciding whether to go to the show,the price of the ticket is a to Dillon and a to Bob.