EXAM
Exam Solutionms
Microeconomics Exam 1 Chang MSU 2026 A+ GRADE A ms ms ms ms ms ms ms ms
SSURED COMPLETE SOLUTIONS AND VERIFIED ANSWE ms ms ms ms ms
RS (10CE4) ms
QUESTION 1 ms
D. costs and benefits
ms ms ms
ANSWER
The cost-benefit principle states that _____ are the incentives that shape decisions.
ms ms ms ms ms ms ms ms ms ms ms
A. framing effects
ms ms
B. incomes
ms
C. opportunity costs
ms ms
D. costs and benefits
ms ms ms
QUESTION 2 ms
B. equal to
ms ms
ANSWER
According to the marginal principle, keep increasing quantity until the marginal benefit of an additio
ms ms ms ms ms ms ms ms ms ms ms ms ms ms
nal item is _____ the marginal cost of an additional item.
ms ms ms ms ms ms ms ms ms ms
A. less than
ms ms
B. equal to
ms ms
C. greater than
ms ms
D. greater than or less than
ms ms ms ms ms
QUESTION 3 ms
d. both the buyer and the seller.
ms ms ms ms ms ms
ANSWER
In a voluntary economic transaction between a buyer and a seller, _____ can earn economic surplus f
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms
rom the transaction.
ms ms
A. neither the buyer nor the seller
ms ms ms ms ms ms
, B. only the seller
ms ms ms
C. only the buyer
ms ms ms
D. both the buyer and the seller
ms ms ms ms ms ms
QUESTION 4 ms
D. $4 ms
ANSWER
Kevin Williamson goes to a local coffee shop and orders a medium-
ms ms ms ms ms ms ms ms ms ms ms
sized latte. His willingness to pay for that latte is $6. The price of the latte is $2. The cost to the cof
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms
fee shop to produce the latte is $1. How much economic surplus does Kevin gain when he purchase
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms
s the latte?
ms ms
A. $6 ms
B. $1
ms
C. $2
ms
D. $4 ms
QUESTION 5 ms
C. benefit of purchasing one more coffee equals the marginal cost
ms ms ms ms ms ms ms ms ms ms
ANSWER
Joshua Murphy is planning on studying late into the night for his economics exam. How many cups
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms
of coffee should he buy tonight? Joshua should keep buying coffee throughout the evening until the
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms
marginal:
A. cost of purchasing one more coffee is positive.
ms ms ms ms ms ms ms ms
B. benefit of purchasing one more coffee is positive.
ms ms ms ms ms ms ms ms
C. benefit of purchasing one more coffee equals the marginal cost.
ms ms ms ms ms ms ms ms ms ms
D. benefit of purchasing one more coffee is less than the marginal cost.
ms ms ms ms ms ms ms ms ms ms ms ms
QUESTION 6 ms
A. opportunity; financial
ms ms
ANSWER
Decisions should reflect the _____ costs, rather than just the _____ costs.
ms ms ms ms ms ms ms ms ms ms ms
A. opportunity; financial
ms ms
B. financial; marginal
ms ms
C. nonfinancial; financial
ms ms
D. opportunity; nonfinancial
ms ms
QUESTION 7 ms
D. both financial and nonfinancial
ms ms ms ms
Exam Solutionms
Microeconomics Exam 1 Chang MSU 2026 A+ GRADE A ms ms ms ms ms ms ms ms
SSURED COMPLETE SOLUTIONS AND VERIFIED ANSWE ms ms ms ms ms
RS (10CE4) ms
QUESTION 1 ms
D. costs and benefits
ms ms ms
ANSWER
The cost-benefit principle states that _____ are the incentives that shape decisions.
ms ms ms ms ms ms ms ms ms ms ms
A. framing effects
ms ms
B. incomes
ms
C. opportunity costs
ms ms
D. costs and benefits
ms ms ms
QUESTION 2 ms
B. equal to
ms ms
ANSWER
According to the marginal principle, keep increasing quantity until the marginal benefit of an additio
ms ms ms ms ms ms ms ms ms ms ms ms ms ms
nal item is _____ the marginal cost of an additional item.
ms ms ms ms ms ms ms ms ms ms
A. less than
ms ms
B. equal to
ms ms
C. greater than
ms ms
D. greater than or less than
ms ms ms ms ms
QUESTION 3 ms
d. both the buyer and the seller.
ms ms ms ms ms ms
ANSWER
In a voluntary economic transaction between a buyer and a seller, _____ can earn economic surplus f
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms
rom the transaction.
ms ms
A. neither the buyer nor the seller
ms ms ms ms ms ms
, B. only the seller
ms ms ms
C. only the buyer
ms ms ms
D. both the buyer and the seller
ms ms ms ms ms ms
QUESTION 4 ms
D. $4 ms
ANSWER
Kevin Williamson goes to a local coffee shop and orders a medium-
ms ms ms ms ms ms ms ms ms ms ms
sized latte. His willingness to pay for that latte is $6. The price of the latte is $2. The cost to the cof
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms
fee shop to produce the latte is $1. How much economic surplus does Kevin gain when he purchase
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms
s the latte?
ms ms
A. $6 ms
B. $1
ms
C. $2
ms
D. $4 ms
QUESTION 5 ms
C. benefit of purchasing one more coffee equals the marginal cost
ms ms ms ms ms ms ms ms ms ms
ANSWER
Joshua Murphy is planning on studying late into the night for his economics exam. How many cups
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms
of coffee should he buy tonight? Joshua should keep buying coffee throughout the evening until the
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms
marginal:
A. cost of purchasing one more coffee is positive.
ms ms ms ms ms ms ms ms
B. benefit of purchasing one more coffee is positive.
ms ms ms ms ms ms ms ms
C. benefit of purchasing one more coffee equals the marginal cost.
ms ms ms ms ms ms ms ms ms ms
D. benefit of purchasing one more coffee is less than the marginal cost.
ms ms ms ms ms ms ms ms ms ms ms ms
QUESTION 6 ms
A. opportunity; financial
ms ms
ANSWER
Decisions should reflect the _____ costs, rather than just the _____ costs.
ms ms ms ms ms ms ms ms ms ms ms
A. opportunity; financial
ms ms
B. financial; marginal
ms ms
C. nonfinancial; financial
ms ms
D. opportunity; nonfinancial
ms ms
QUESTION 7 ms
D. both financial and nonfinancial
ms ms ms ms
