ECON 101 EXAM 1 STUDY GUIDE comprehensive Questions and Answers
with 100% Correct Answers | Latest Version
The real power of trade lies in people's ability to:
A) get things they can't produce.
B) get the lowest price possible.
C) increase their consumption.
D) specialize and increase production. - (ANSWER)D
A person has a comparative advantage in activity X when that person's:
A) opportunity cost of performing that activity is very high.
B) ability to perform that activity exceeds that of all other people.
C) government negotiates a favorable trade agreement.
D) opportunity cost is lower than other trading partners. - (ANSWER)D
Which of the following arise as benefits from trade?
I. economies of scale
II. cost reduction from mass production
III. the division of knowledge
A) I only
B) II and III only
C) I and III only
D) I, II, and III - (ANSWER)D
What you give up to obtain an item is called your:
A) opportunity cost.
B) explicit cost.
C) true cost.
D) direct cost. - (ANSWER)A
,ECON 101 EXAM 1 STUDY GUIDE comprehensive Questions and Answers
with 100% Correct Answers | Latest Version
The opportunity cost of a choice is:
A) the value of the next best alternative.
B) the net value of the opportunities gained.
C) the difference between the benefits and costs of the choice.
D) sometimes positive or negative. - (ANSWER)A
Deciding whether to study an additional hour for an exam by comparing the additional benefits to the
additional costs of an extra hour of study is an example of:
A) normative analysis.
B) transformational thought.
C) marginal thinking.
D) None of the answers is correct. - (ANSWER)C
18. When deciding whether or not to undertake an activity, economists compare:
A) the total cost of the activity against the total benefit received.
B) the total benefit of the activity against the total cost of production.
C) the additional cost of the activity against the additional benefits received.
D) the average cost of the activity versus the total benefits received. - (ANSWER)C
Economics:
A) teaches us how to make the world a better place.
B) increases our understanding of historical events.
C) can help you better manage your finances.
D) All of the answers are correct. - (ANSWER)D
, ECON 101 EXAM 1 STUDY GUIDE comprehensive Questions and Answers
with 100% Correct Answers | Latest Version
Suppose your teacher finishes class 30 minutes early on the day before an exam. She indicates that you
may leave, or stay on for an optional study period which will last for the remaining 30 minutes of the
scheduled class time. You should:
A) always choose to stay for the study period, since you have already paid for the class time.
B) only choose to stay if you like the instructor, since the value obtained is higher than if you disliked
the instructor.
C) only choose to stay if the benefits gained from the extra study session exceed the cost of another 30
minutes in class.
D) only choose to stay for the study session if you do not plan to study on your own for the exam -
(ANSWER)C
The main incentive for business activity is:
A) government subsidies.
B) technological advancement.
C) profit.
D) employment. - (ANSWER)C
Susan quits her administrative job, which pays $40,000 a year, to finish her four-year college degree. Her
annual college expenses are $8,000 for tuition, $900 for books, and $2,500 for food. The opportunity
cost of attending college for the year is:
A) $11,400.
B) $8,900.
C) $48,900.
D) $51,400. - (ANSWER)C. This answer is ****ING stupid, you don't include the costs of food because she
is gonna need it anyway even though the question poses it like you would because it calls food a college
expense.
The production possibilities frontier shows:
with 100% Correct Answers | Latest Version
The real power of trade lies in people's ability to:
A) get things they can't produce.
B) get the lowest price possible.
C) increase their consumption.
D) specialize and increase production. - (ANSWER)D
A person has a comparative advantage in activity X when that person's:
A) opportunity cost of performing that activity is very high.
B) ability to perform that activity exceeds that of all other people.
C) government negotiates a favorable trade agreement.
D) opportunity cost is lower than other trading partners. - (ANSWER)D
Which of the following arise as benefits from trade?
I. economies of scale
II. cost reduction from mass production
III. the division of knowledge
A) I only
B) II and III only
C) I and III only
D) I, II, and III - (ANSWER)D
What you give up to obtain an item is called your:
A) opportunity cost.
B) explicit cost.
C) true cost.
D) direct cost. - (ANSWER)A
,ECON 101 EXAM 1 STUDY GUIDE comprehensive Questions and Answers
with 100% Correct Answers | Latest Version
The opportunity cost of a choice is:
A) the value of the next best alternative.
B) the net value of the opportunities gained.
C) the difference between the benefits and costs of the choice.
D) sometimes positive or negative. - (ANSWER)A
Deciding whether to study an additional hour for an exam by comparing the additional benefits to the
additional costs of an extra hour of study is an example of:
A) normative analysis.
B) transformational thought.
C) marginal thinking.
D) None of the answers is correct. - (ANSWER)C
18. When deciding whether or not to undertake an activity, economists compare:
A) the total cost of the activity against the total benefit received.
B) the total benefit of the activity against the total cost of production.
C) the additional cost of the activity against the additional benefits received.
D) the average cost of the activity versus the total benefits received. - (ANSWER)C
Economics:
A) teaches us how to make the world a better place.
B) increases our understanding of historical events.
C) can help you better manage your finances.
D) All of the answers are correct. - (ANSWER)D
, ECON 101 EXAM 1 STUDY GUIDE comprehensive Questions and Answers
with 100% Correct Answers | Latest Version
Suppose your teacher finishes class 30 minutes early on the day before an exam. She indicates that you
may leave, or stay on for an optional study period which will last for the remaining 30 minutes of the
scheduled class time. You should:
A) always choose to stay for the study period, since you have already paid for the class time.
B) only choose to stay if you like the instructor, since the value obtained is higher than if you disliked
the instructor.
C) only choose to stay if the benefits gained from the extra study session exceed the cost of another 30
minutes in class.
D) only choose to stay for the study session if you do not plan to study on your own for the exam -
(ANSWER)C
The main incentive for business activity is:
A) government subsidies.
B) technological advancement.
C) profit.
D) employment. - (ANSWER)C
Susan quits her administrative job, which pays $40,000 a year, to finish her four-year college degree. Her
annual college expenses are $8,000 for tuition, $900 for books, and $2,500 for food. The opportunity
cost of attending college for the year is:
A) $11,400.
B) $8,900.
C) $48,900.
D) $51,400. - (ANSWER)C. This answer is ****ING stupid, you don't include the costs of food because she
is gonna need it anyway even though the question poses it like you would because it calls food a college
expense.
The production possibilities frontier shows:
