Economic Strategies 10th Edition Final Exam Questions with
Solutions |Already Graded A+
Chapter 1:The power of principles A Historical perspective
Multiple choces.
QUESTION: 1. Philosophers draw a distinction between positive statements, which describe
the world as it is, and ___________________s, which describe how the world should be
A. normative statement
B. budget constraint
C. trade-off
D. opportunity cost ✓✓Correct Answer: A. normative statement
QUESTION: 2. As depicted in _________________________________, it is necessary to give
up some of one good to gain more of the other good
A. the production possibilities frontier
B. allocative efficiency
C. scarcity
D. utility ✓✓Correct Answer: A. the production possibilities frontier
QUESTION: 6. Why is there scarcity
A. Because the opportunity set determines this.
B. Because theory dictates it.
C. Because our unlimited wants exceed our limited resources
D. Because human wants are limited ✓✓Correct Answer: c
QUESTION: 7. Gomer decides to spend an hour playing basketball rather than studying. His
opportunity cost is
A. nothing, because he enjoys playing basketball more than studying.
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,B. the increase in skill he obtains from playing basketball for that hour.
C. the benefit to his grades from studying for an hour
D. nothing, because he had a free pass into the sports complex to play basketball ✓✓Correct
Answer: c
QUESTION: 8. "If I didn't have class tonight, I would save the $4 campus parking fee and
spend four hours at work where I earn $10 per hour." The opportunity cost of attending class
this evening is
A. $0
B. $4
C. $40
D. $44 ✓✓Correct Answer: D
QUESTION: 9. Most choices involve _________________, which involves comparing the
benefits and costs of choosing a little more or a little less of a good.
A. utility
B. marginal analysis
C. the budget constraint
D. consumption ✓✓Correct Answer: B
QUESTION: 10. Marginal thinking is best demonstrated by:
A. choosing to spend one more hour studying economics because you think the
improvement in your score on the next quiz will be worth the sacrifice of time.
B. deciding to never purchase a coat made with animal skins or furs
C. acquiring the information relevant to a choice before making that choice
D. measuring all of the costs of a meal against all of the benefits when deciding whether to
order a second milkshake ✓✓Correct Answer: A.
QUESTION: 11. The marginal benefit of a slice of pizza is the:
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,A. total amount that a consumer is willing to pay for a whole pizza, divided by the number of
slices
B. difference between the value of the slice to the consumer and the price of the slice.
C. maximum amount that a consumer is willing to pay for the slice.
D. price of the slice of pizza ✓✓Correct Answer: c
QUESTION: 12. The general pattern that consumption of the first few units of any good
tends to bring a higher level of _______ to a person than consumption of later units is a
common pattern.
A. utility
B. marginal benefit
C. opportunity cost
D. sunk costs ✓✓Correct Answer: A.
QUESTION: 13. The lesson of __________ is to forget about the money that's irretrievably
gone and instead to focus on the marginal costs and benefits of future options.
A. marginal utility
B. sunk costs
C. marginal analysis
D. budget constraints ✓✓Correct Answer: B
QUESTION: 14. The law of ____________________________ explains why people and
societies rarely make all-or-nothing choices
.A. consumption
B. marginal analysis
C. diminishing marginal utility
D. utility ✓✓Correct Answer: C
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, QUESTION: 15. As a person receives more of a good, the _______________ from each
additional unit of the good declines.
A. utility
B. sunk costs
C. marginal utility
D. budget constraint ✓✓Correct Answer: C
QUESTION: 16. Which of the following would most likely shift the production possibilities
curve inward?
A. an increase in the number of hours factories are in use
B. a decrease in the average number of hours worked per week as the labor force chooses to
enjoy more leisure time
C. an increase in the production of capital goods
D. technological progress ✓✓Correct Answer: B
QUESTION: 17. In deciding how many hours to work, Beulah will make a choice that
maximizes her _______; that is, she will choose according to her preferences for leisure time
and income.
A. budget constraint
B. opportunity set
C. utility
D. production possibilities frontier ✓✓Correct Answer: C
QUESTION: 18. The model that economists use for illustrating the process of individual
choice in a situation of scarcity is the budget constraint, sometimes also called the
_______________, a diagram which shows what choices are possible.
A. opportunity set
B. consumption choice
C. time value of money
D. risk premium ✓✓Correct Answer: A.
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Solutions |Already Graded A+
Chapter 1:The power of principles A Historical perspective
Multiple choces.
QUESTION: 1. Philosophers draw a distinction between positive statements, which describe
the world as it is, and ___________________s, which describe how the world should be
A. normative statement
B. budget constraint
C. trade-off
D. opportunity cost ✓✓Correct Answer: A. normative statement
QUESTION: 2. As depicted in _________________________________, it is necessary to give
up some of one good to gain more of the other good
A. the production possibilities frontier
B. allocative efficiency
C. scarcity
D. utility ✓✓Correct Answer: A. the production possibilities frontier
QUESTION: 6. Why is there scarcity
A. Because the opportunity set determines this.
B. Because theory dictates it.
C. Because our unlimited wants exceed our limited resources
D. Because human wants are limited ✓✓Correct Answer: c
QUESTION: 7. Gomer decides to spend an hour playing basketball rather than studying. His
opportunity cost is
A. nothing, because he enjoys playing basketball more than studying.
Page 1 of 56
,B. the increase in skill he obtains from playing basketball for that hour.
C. the benefit to his grades from studying for an hour
D. nothing, because he had a free pass into the sports complex to play basketball ✓✓Correct
Answer: c
QUESTION: 8. "If I didn't have class tonight, I would save the $4 campus parking fee and
spend four hours at work where I earn $10 per hour." The opportunity cost of attending class
this evening is
A. $0
B. $4
C. $40
D. $44 ✓✓Correct Answer: D
QUESTION: 9. Most choices involve _________________, which involves comparing the
benefits and costs of choosing a little more or a little less of a good.
A. utility
B. marginal analysis
C. the budget constraint
D. consumption ✓✓Correct Answer: B
QUESTION: 10. Marginal thinking is best demonstrated by:
A. choosing to spend one more hour studying economics because you think the
improvement in your score on the next quiz will be worth the sacrifice of time.
B. deciding to never purchase a coat made with animal skins or furs
C. acquiring the information relevant to a choice before making that choice
D. measuring all of the costs of a meal against all of the benefits when deciding whether to
order a second milkshake ✓✓Correct Answer: A.
QUESTION: 11. The marginal benefit of a slice of pizza is the:
Page 2 of 56
,A. total amount that a consumer is willing to pay for a whole pizza, divided by the number of
slices
B. difference between the value of the slice to the consumer and the price of the slice.
C. maximum amount that a consumer is willing to pay for the slice.
D. price of the slice of pizza ✓✓Correct Answer: c
QUESTION: 12. The general pattern that consumption of the first few units of any good
tends to bring a higher level of _______ to a person than consumption of later units is a
common pattern.
A. utility
B. marginal benefit
C. opportunity cost
D. sunk costs ✓✓Correct Answer: A.
QUESTION: 13. The lesson of __________ is to forget about the money that's irretrievably
gone and instead to focus on the marginal costs and benefits of future options.
A. marginal utility
B. sunk costs
C. marginal analysis
D. budget constraints ✓✓Correct Answer: B
QUESTION: 14. The law of ____________________________ explains why people and
societies rarely make all-or-nothing choices
.A. consumption
B. marginal analysis
C. diminishing marginal utility
D. utility ✓✓Correct Answer: C
Page 3 of 56
, QUESTION: 15. As a person receives more of a good, the _______________ from each
additional unit of the good declines.
A. utility
B. sunk costs
C. marginal utility
D. budget constraint ✓✓Correct Answer: C
QUESTION: 16. Which of the following would most likely shift the production possibilities
curve inward?
A. an increase in the number of hours factories are in use
B. a decrease in the average number of hours worked per week as the labor force chooses to
enjoy more leisure time
C. an increase in the production of capital goods
D. technological progress ✓✓Correct Answer: B
QUESTION: 17. In deciding how many hours to work, Beulah will make a choice that
maximizes her _______; that is, she will choose according to her preferences for leisure time
and income.
A. budget constraint
B. opportunity set
C. utility
D. production possibilities frontier ✓✓Correct Answer: C
QUESTION: 18. The model that economists use for illustrating the process of individual
choice in a situation of scarcity is the budget constraint, sometimes also called the
_______________, a diagram which shows what choices are possible.
A. opportunity set
B. consumption choice
C. time value of money
D. risk premium ✓✓Correct Answer: A.
Page 4 of 56
