ECN 104 Exam Questions with Correct Answers Graded A+
Daniel decides to spend the last two hours of the night before his economics exam studying
instead of sleeping. For Daniel, his tradeoff would be
A) nothing, since studying would be more beneficial than sleep
B) the six hours of sleep he could have had if he had gone to bed before midnight
C) the two hours of rest he would have gotten
D) nothing, since no dollar value can be put on sleep - Answers C) the two hours of rest he
would have gotten
What is the oppurtunity cost of going to college?
A) the total spent on food, clothing, books, transportation, tuition, lodging and other expenses
B) zero for students who are fortunate enough to have all of their college expenses paid by
someone else
C) zero, since a college education will allow a student to earn a larger income after graduation
D) The value of the best opportunity a student gives up to attend college - Answers D) The value
of the best opportunity a student gives up to attend college
The main function of the entrepreneur is to:
A) create market demand
B) innovate
C) purchase capital
D) make routine pricing decisions - Answers B) innovate
Tammie makes $150 a day as a bank clerk. She takes off two days off work without pay to fly to
another city to attend the concert of her favorite music group. The cost of transportation for the
trip is $250. The cost of the concert ticket is $50. The opportunity cost of Tammie's attending
the concert is:
A) $500
B) $300
C) $600
D) $450 - Answers C) $600
,A typical concave production possibility curve implies:
A) that economic resources are scarce
B) all of the above
C) that society must choose among various attainable combinations of goods
D) increasing opportunity costs - Answers B) all of the above
The society must also make choices under conditions of scarcity. This problem arises from the
fact that:
A) Society's wants and resources are both unlimited
B) resources are scarce relative to society's wants
C) society's wants are limited but the resources are not
D) societies behave only in their self-interest - Answers B) resources are scarce relative to
society's wants
the output of compact disc players should be:
A) reduced if marginal costs exceed marginal benefits
B) reduced if marginal benefits exceed marginal costs
C) reduced to zero if their unit costs exceed the unit costs of alternative products
D) increased if marginal costs exceed marginal benefits - Answers A) reduced if marginal costs
exceed marginal benefits
Normative statements are concerned with:
A) what ought to be
B) facts and theories
C) what is
D) rational choice involving costs and benefits - Answers A) what ought to be
What does making decisions "at the margin" mean?
A) that people always calculate the marginal dollar costs for each decision
B) that people make those decisions that do not impose a marginal cost
C) that people evaluate how easily a decision can be reversed if problems arise
, D) that people compare the MC and MB benefits of each decision - Answers D) that people
compare the MC and MB of each decision
In which of the following situations would economists use the world equity?
A) society is getting the most it can from its scare resources
B) each member of society has the same income
C) those in society who have the least will receive the most
D) the benefits of society's resources are distributed fairly among society's members - Answers
D) the benefits of society's resources are distributed fairly among society's members
Macroeconomics approaches the study of economics from the viewpoint of:
A) the entire economy
B) governmental units
C) the operation of specific product and resource markets
D) individual firms - Answers A) the entire economy
The production possibilities curve illustrates the basic principles that:
A) the production of more of any one good will in time require smaller and smaller sacrifices of
other goods
B) if all resources of an economy are in use, more of one good can be produced only if less of
another good is produced
C) an economy will automatically seek that level of output at which all of its resources are
employed
D) an economy's capacity to produce increases in proportion to its population size - Answers B)
if all resources of an economy are in use, more of one good can be produced only if less of
another good is produced
The production possibilities curve:
A) is a frontier between all combinations of two goods which can be produced and those
combinations which cannot be
B) indicates that any combination of goods lying outside the curve is economically inefficient
C) shows all of those combinations of two goods which are most preferred by society
D) shows all of those levels of production which are consistent with a stable price level -
Daniel decides to spend the last two hours of the night before his economics exam studying
instead of sleeping. For Daniel, his tradeoff would be
A) nothing, since studying would be more beneficial than sleep
B) the six hours of sleep he could have had if he had gone to bed before midnight
C) the two hours of rest he would have gotten
D) nothing, since no dollar value can be put on sleep - Answers C) the two hours of rest he
would have gotten
What is the oppurtunity cost of going to college?
A) the total spent on food, clothing, books, transportation, tuition, lodging and other expenses
B) zero for students who are fortunate enough to have all of their college expenses paid by
someone else
C) zero, since a college education will allow a student to earn a larger income after graduation
D) The value of the best opportunity a student gives up to attend college - Answers D) The value
of the best opportunity a student gives up to attend college
The main function of the entrepreneur is to:
A) create market demand
B) innovate
C) purchase capital
D) make routine pricing decisions - Answers B) innovate
Tammie makes $150 a day as a bank clerk. She takes off two days off work without pay to fly to
another city to attend the concert of her favorite music group. The cost of transportation for the
trip is $250. The cost of the concert ticket is $50. The opportunity cost of Tammie's attending
the concert is:
A) $500
B) $300
C) $600
D) $450 - Answers C) $600
,A typical concave production possibility curve implies:
A) that economic resources are scarce
B) all of the above
C) that society must choose among various attainable combinations of goods
D) increasing opportunity costs - Answers B) all of the above
The society must also make choices under conditions of scarcity. This problem arises from the
fact that:
A) Society's wants and resources are both unlimited
B) resources are scarce relative to society's wants
C) society's wants are limited but the resources are not
D) societies behave only in their self-interest - Answers B) resources are scarce relative to
society's wants
the output of compact disc players should be:
A) reduced if marginal costs exceed marginal benefits
B) reduced if marginal benefits exceed marginal costs
C) reduced to zero if their unit costs exceed the unit costs of alternative products
D) increased if marginal costs exceed marginal benefits - Answers A) reduced if marginal costs
exceed marginal benefits
Normative statements are concerned with:
A) what ought to be
B) facts and theories
C) what is
D) rational choice involving costs and benefits - Answers A) what ought to be
What does making decisions "at the margin" mean?
A) that people always calculate the marginal dollar costs for each decision
B) that people make those decisions that do not impose a marginal cost
C) that people evaluate how easily a decision can be reversed if problems arise
, D) that people compare the MC and MB benefits of each decision - Answers D) that people
compare the MC and MB of each decision
In which of the following situations would economists use the world equity?
A) society is getting the most it can from its scare resources
B) each member of society has the same income
C) those in society who have the least will receive the most
D) the benefits of society's resources are distributed fairly among society's members - Answers
D) the benefits of society's resources are distributed fairly among society's members
Macroeconomics approaches the study of economics from the viewpoint of:
A) the entire economy
B) governmental units
C) the operation of specific product and resource markets
D) individual firms - Answers A) the entire economy
The production possibilities curve illustrates the basic principles that:
A) the production of more of any one good will in time require smaller and smaller sacrifices of
other goods
B) if all resources of an economy are in use, more of one good can be produced only if less of
another good is produced
C) an economy will automatically seek that level of output at which all of its resources are
employed
D) an economy's capacity to produce increases in proportion to its population size - Answers B)
if all resources of an economy are in use, more of one good can be produced only if less of
another good is produced
The production possibilities curve:
A) is a frontier between all combinations of two goods which can be produced and those
combinations which cannot be
B) indicates that any combination of goods lying outside the curve is economically inefficient
C) shows all of those combinations of two goods which are most preferred by society
D) shows all of those levels of production which are consistent with a stable price level -
