ECON 213 QUIZ 1 QUESTIONS AND
ANSWERS
A health insurance company may offer its policy-holders a discount on their premiums if they prove that
they have stopped smoking. What type of incentive is the health insurance company offering? -
ANSWER-a direct incentive.
In a growing number of cities, stores are required either not to make available plastic or paper bags or to
do so only for an additional fee. If this fee can be refunded when you recycle the bag, the refund acts as
a(n): - ANSWER-direct incentive
If you don't like changing the oil in your car and pay your father to do it for you, you have provided him
with a(n): - ANSWER-direct incentive
Macroeconomics is the study of: - ANSWER-the operation of the economy as a whole.
The opportunity cost of a purchase is: - ANSWER-the alternative good or service that one sacrifices
because a different good was purchased.
An example of a direct positive incentive is: - ANSWER-providing a commission for sales.
Instead of deciding to finish high school, you could have decided to work full-time. How would an
economist explain your decision to receive your high school degree? - ANSWER-The benefit of going to
high school was greater than the benefit of working full-time.
Microeconomics is the branch of economics that focuses on the: - ANSWER-choices and decision-making
of individuals and firms.
Because of scarcity: - ANSWER-individuals and societies must choose which wants and needs to satisfy.
The trade-offs that are made because of scarcity: - ANSWER-depend on the decision-maker's value
judgments about the relative importance of the alternatives.
I asked my neighbor to rake the leaves on his lawn because they are blowing into my yard. He responded
that it wouldn't be rational for him to do so. Why would this be the case? - ANSWER-My neighbor is a
lawyer who values his time at $200 an hour and knows that he can hire a high school kid to rake leaves
for $20 an hour.
What is the indirect incentive in the unemployment insurance program? - ANSWER-Workers face no
incentive to find a new job until the insurance runs out.
Public buildings in the United States are required to be accessible to the disabled and, as a result, almost
all have an elevator. What would be an example of a positive direct incentive for those who can use
stairs? - ANSWER-Using the stairs will give you some exercise and make you healthier.
When a ticket is given to a pedestrian for jaywalking, what type of incentive exists? - ANSWER-a negative
incentive
The opportunity cost of going to school rather than working is the cost of: - ANSWER-potential wages.
ANSWERS
A health insurance company may offer its policy-holders a discount on their premiums if they prove that
they have stopped smoking. What type of incentive is the health insurance company offering? -
ANSWER-a direct incentive.
In a growing number of cities, stores are required either not to make available plastic or paper bags or to
do so only for an additional fee. If this fee can be refunded when you recycle the bag, the refund acts as
a(n): - ANSWER-direct incentive
If you don't like changing the oil in your car and pay your father to do it for you, you have provided him
with a(n): - ANSWER-direct incentive
Macroeconomics is the study of: - ANSWER-the operation of the economy as a whole.
The opportunity cost of a purchase is: - ANSWER-the alternative good or service that one sacrifices
because a different good was purchased.
An example of a direct positive incentive is: - ANSWER-providing a commission for sales.
Instead of deciding to finish high school, you could have decided to work full-time. How would an
economist explain your decision to receive your high school degree? - ANSWER-The benefit of going to
high school was greater than the benefit of working full-time.
Microeconomics is the branch of economics that focuses on the: - ANSWER-choices and decision-making
of individuals and firms.
Because of scarcity: - ANSWER-individuals and societies must choose which wants and needs to satisfy.
The trade-offs that are made because of scarcity: - ANSWER-depend on the decision-maker's value
judgments about the relative importance of the alternatives.
I asked my neighbor to rake the leaves on his lawn because they are blowing into my yard. He responded
that it wouldn't be rational for him to do so. Why would this be the case? - ANSWER-My neighbor is a
lawyer who values his time at $200 an hour and knows that he can hire a high school kid to rake leaves
for $20 an hour.
What is the indirect incentive in the unemployment insurance program? - ANSWER-Workers face no
incentive to find a new job until the insurance runs out.
Public buildings in the United States are required to be accessible to the disabled and, as a result, almost
all have an elevator. What would be an example of a positive direct incentive for those who can use
stairs? - ANSWER-Using the stairs will give you some exercise and make you healthier.
When a ticket is given to a pedestrian for jaywalking, what type of incentive exists? - ANSWER-a negative
incentive
The opportunity cost of going to school rather than working is the cost of: - ANSWER-potential wages.
