Microeconomics Midterm Chapters 1-8
Exam 2024 With 100% Correct
Answers
Economics is best defined as the study of - CORRECT ANSWER✔✔The choice in the face of
limited resources
Chris has a one-hour break between classes every Wednesday. Chris can either stay at the
library and study or go to the gym and work out. The decision Chris must make is - CORRECT
ANSWER✔✔An economic problem because Chris has only one hour, and engaging in one
activity means giving up the other.
Microeconomics differs from macroeconomics in that microeconomics focuses on - CORRECT
ANSWER✔✔The choices made by individuals and the implications of those choices.
Which of the following would not be studied in macroeconomics? - CORRECT ANSWER✔✔How
a sharp increase in gasoline prices is likely to affect SUV sales.
The Scarcity Principle states that - CORRECT ANSWER✔✔With limited resources, having more of
one thing means having less of another.
The Cost-Benefit Principle indicates that an action should be taken if - CORRECT ANSWER✔✔its
extra benefit is greater than or equal to its extra cost.
Choosing to study for an exam until the extra benefit (e.g., improved score) equals the extra
cost (e.g., the value of forgone activities) is - CORRECT ANSWER✔✔An application of the Cost-
Benefit Principle.
, Janie must choose to either mow the lawn or wash clothes. If she mows the lawn, she will earn
$25, and if she washes clothes, she will earn $20. She dislikes both tasks equally and they both
take the same amount of time. Janie will therefore choose ______ because ______. - CORRECT
ANSWER✔✔To mow the lawn; it generates a bigger economic surplus.
Suppose Monique is willing to pay up to $15,000 for a used Ford pick-up truck. If she buys one
for $12,500, her economic ______ would be ______. - CORRECT ANSWER✔✔surplus; $2,500
The opportunity cost of an activity includes the value of - CORRECT ANSWER✔✔the next-best
alternative that must be forgone.
Your classmates from the University of Chicago are planning to go to Miami for spring break,
and you are undecided about whether you should go with them. The round-trip airfare is $600,
but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare.
All other costs for the vacation are exactly $900. The most you would be willing to pay for the
trip is $1,400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta
two weeks after the break to attend your sister's graduation, which your parents are forcing you
to attend. The Chicago-Atlanta round-trip airfare is $450. If you do not use the frequent-flyer
coupon to fly to Miami, should you go to Miami? - CORRECT ANSWER✔✔No, your benefit is less
than your cost.
You paid $35 for a ticket (which is nonrefundable) to see SPAM, a local rock band, in concert on
Saturday. Assume that $35 is the most you would have been willing to pay for a ticket. Your boss
called, and she is looking for someone to cover a shift on Saturday at the same time as the
concert. You would have to work 4 hours and she would pay you $11/hr. The cost to you of
working is $2/hr. Should you go to the concert instead of working Saturday? - CORRECT
ANSWER✔✔No, the benefit of going to the concert is less than the cost.
During times of high unemployment, colleges often observe an increase in enrollment even if
tuition remains unchanged. Why? - CORRECT ANSWER✔✔The opportunity cost of attending
college is lower when unemployment is high.
Exam 2024 With 100% Correct
Answers
Economics is best defined as the study of - CORRECT ANSWER✔✔The choice in the face of
limited resources
Chris has a one-hour break between classes every Wednesday. Chris can either stay at the
library and study or go to the gym and work out. The decision Chris must make is - CORRECT
ANSWER✔✔An economic problem because Chris has only one hour, and engaging in one
activity means giving up the other.
Microeconomics differs from macroeconomics in that microeconomics focuses on - CORRECT
ANSWER✔✔The choices made by individuals and the implications of those choices.
Which of the following would not be studied in macroeconomics? - CORRECT ANSWER✔✔How
a sharp increase in gasoline prices is likely to affect SUV sales.
The Scarcity Principle states that - CORRECT ANSWER✔✔With limited resources, having more of
one thing means having less of another.
The Cost-Benefit Principle indicates that an action should be taken if - CORRECT ANSWER✔✔its
extra benefit is greater than or equal to its extra cost.
Choosing to study for an exam until the extra benefit (e.g., improved score) equals the extra
cost (e.g., the value of forgone activities) is - CORRECT ANSWER✔✔An application of the Cost-
Benefit Principle.
, Janie must choose to either mow the lawn or wash clothes. If she mows the lawn, she will earn
$25, and if she washes clothes, she will earn $20. She dislikes both tasks equally and they both
take the same amount of time. Janie will therefore choose ______ because ______. - CORRECT
ANSWER✔✔To mow the lawn; it generates a bigger economic surplus.
Suppose Monique is willing to pay up to $15,000 for a used Ford pick-up truck. If she buys one
for $12,500, her economic ______ would be ______. - CORRECT ANSWER✔✔surplus; $2,500
The opportunity cost of an activity includes the value of - CORRECT ANSWER✔✔the next-best
alternative that must be forgone.
Your classmates from the University of Chicago are planning to go to Miami for spring break,
and you are undecided about whether you should go with them. The round-trip airfare is $600,
but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare.
All other costs for the vacation are exactly $900. The most you would be willing to pay for the
trip is $1,400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta
two weeks after the break to attend your sister's graduation, which your parents are forcing you
to attend. The Chicago-Atlanta round-trip airfare is $450. If you do not use the frequent-flyer
coupon to fly to Miami, should you go to Miami? - CORRECT ANSWER✔✔No, your benefit is less
than your cost.
You paid $35 for a ticket (which is nonrefundable) to see SPAM, a local rock band, in concert on
Saturday. Assume that $35 is the most you would have been willing to pay for a ticket. Your boss
called, and she is looking for someone to cover a shift on Saturday at the same time as the
concert. You would have to work 4 hours and she would pay you $11/hr. The cost to you of
working is $2/hr. Should you go to the concert instead of working Saturday? - CORRECT
ANSWER✔✔No, the benefit of going to the concert is less than the cost.
During times of high unemployment, colleges often observe an increase in enrollment even if
tuition remains unchanged. Why? - CORRECT ANSWER✔✔The opportunity cost of attending
college is lower when unemployment is high.
