, Chapter 01
Thinking Like an Economist
Multiple Choice Questions
1. Microeconomics is primarily the study of how
A. the stock market
works.
B. people choose among
alternatives.
C. businesses can make
money.
D. the economy functions as a
whole.
2. If you are at an all-you-can-eat buffet dinner and you are considering whether to eat
another dessert, you, as a rational consumer should decide to eat the desert
A. if it brings you any pleasure
at all.
B. if it brings you more pleasure than the price you paid for
the meal.
C. if it brings you as much pleasure as the desert costs if it is ordered
a la carte.
D. no matter what because you want to get more for
your money.
1-1
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
,3. Say your girlfriend has received two free tickets to the Sunday movie matinee and
she wants you to go with her. Nevertheless, the movie plays at the same time you
were planning to watch the football game on the TV. As a rational person you should
decide to go to the movie
A. always, since the tickets were
free.
B. only if you would gain some pleasure
from it.
C. only if the pleasure you will gain from it outweighs the pleasure you would gain
from watching the football game.
D. only if it brings you more pleasure than the cost of
the tickets.
4. The reservation price of good X is
A. the market price for a
good.
B. any price above what you would be willing to pay for
the good.
C. the price at which one would be indifferent between good X and simply keeping
the money.
D. the cost of producing
good X.
5. If the benefits of X = $50 and the price of X = $50, then
A. $100 is the reservation
price.
B. you will be indifferent between buying X and keeping
your money.
C. $0 is the reservation
price.
D. you should buy
X.
1-2
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
, 6. Your bank account pays 3% interest per year. You loan a friend $100 for one year at
zero interest. Assuming the loan is paid on time the opportunity cost of the loan is
A. $3
.
B. $10
0.
C. $10
3.
D. $0
.
7. You decide to go skiing this weekend. It costs $50 for transportation, $50 for lodging,
$30 for ski lift tickets and you could have earned $100 as a waiter. What is the total
cost of the ski weekend?
A. $23
0
B. $13
0
C. $10
0
D. $8
0
8. You decide to go skiing this weekend. It costs $50 for transportation, $50 for lodging,
$30 for ski lift tickets. You are unemployed. What is the total cost of the ski
weekend?
A. $23
0
B. $13
0
C. $10
0
D. $8
0
1-3
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
Thinking Like an Economist
Multiple Choice Questions
1. Microeconomics is primarily the study of how
A. the stock market
works.
B. people choose among
alternatives.
C. businesses can make
money.
D. the economy functions as a
whole.
2. If you are at an all-you-can-eat buffet dinner and you are considering whether to eat
another dessert, you, as a rational consumer should decide to eat the desert
A. if it brings you any pleasure
at all.
B. if it brings you more pleasure than the price you paid for
the meal.
C. if it brings you as much pleasure as the desert costs if it is ordered
a la carte.
D. no matter what because you want to get more for
your money.
1-1
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
,3. Say your girlfriend has received two free tickets to the Sunday movie matinee and
she wants you to go with her. Nevertheless, the movie plays at the same time you
were planning to watch the football game on the TV. As a rational person you should
decide to go to the movie
A. always, since the tickets were
free.
B. only if you would gain some pleasure
from it.
C. only if the pleasure you will gain from it outweighs the pleasure you would gain
from watching the football game.
D. only if it brings you more pleasure than the cost of
the tickets.
4. The reservation price of good X is
A. the market price for a
good.
B. any price above what you would be willing to pay for
the good.
C. the price at which one would be indifferent between good X and simply keeping
the money.
D. the cost of producing
good X.
5. If the benefits of X = $50 and the price of X = $50, then
A. $100 is the reservation
price.
B. you will be indifferent between buying X and keeping
your money.
C. $0 is the reservation
price.
D. you should buy
X.
1-2
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
, 6. Your bank account pays 3% interest per year. You loan a friend $100 for one year at
zero interest. Assuming the loan is paid on time the opportunity cost of the loan is
A. $3
.
B. $10
0.
C. $10
3.
D. $0
.
7. You decide to go skiing this weekend. It costs $50 for transportation, $50 for lodging,
$30 for ski lift tickets and you could have earned $100 as a waiter. What is the total
cost of the ski weekend?
A. $23
0
B. $13
0
C. $10
0
D. $8
0
8. You decide to go skiing this weekend. It costs $50 for transportation, $50 for lodging,
$30 for ski lift tickets. You are unemployed. What is the total cost of the ski
weekend?
A. $23
0
B. $13
0
C. $10
0
D. $8
0
1-3
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
