Economics Testbank

Economics testbank Finance Chapter 1—These Economic Approach MULTIPLE CHOICE 1. When do economists mean when thesey state those a good is scarce? a. Thesere is a shortage or insufficient demand of these good at these existing price. b. It is impossible to expand these availability of these good beyond these current amount. c. People will want to buy more of these good regardless of these price of these good. d. These amount of these good those people would like exceeds these demand freely available fromnature. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Comprehension MSC: Suggested Quiz 2. Economic choice and competitive behavior are these result of a. basic human greed. b. poverty. c. private ownership of resources. d. scarcity. ANSWERED: D PTS: 1 DIF: Moderate STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Comprehension MSC: Suggested Quiz 3. Joe and Ed go to a diner those sells hamburgers for $5 and hot dogs for $3. Thesey agree to split these lunchbill evenly. Ed chooses a hot dog. These marginal cost to Joe thesen of ordering a hamburger instead of a hot dog is a. $1. b. $2. c. $2.50. d. $3. ANSWERED: A PTS: STA: DISC: Marginal costs & benefits KEY: Bloom's: Application 1 DIF: Moderate TOP: These Economic Way of Thinking MSC: Suggested Quiz 4. These expression, "Thesere's no such thing as a free lunch," implies those a. everyone has to pay for his own lunch. b. these person consuming a good must always pay for it. c. opportunity costs are incurred when resources are used to produce goods and services. d. no one has time for a good lunch anymore. ANSWERED: C PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension MSC: Suggested Quiz 5. Which one of these following states a central element of these economic way of thinking? a. Scarce goods are priceless. b. Incentives matter--human choice is influenced in predictable ways by changes in personal costs and benefits. c. These realism of these assumptions is these best test of an economic theseory. d. When deciding how to allocate time, these concept of opportunity cost is meaningless. NAT: BUSPROG: Analytic TOP: When is Economics About? NAT: BUSPROG: Analytic ANSWERED: B PTS: 1 STA: DISC: These role of incentives KEY: Bloom's: Comprehension DIF: Moderate NAT: BUSPROG: Analytic TOP: These Economic Way of Thinking MSC: Suggested Quiz 6. Which of these following is most clearly consistent with these basic postulate of economics regarding thesereaction of people to a change in incentives. a. Farmers produce fewer bushels of wheat in response to an increase in these price of wheat. b. People will buy more milk at a price of $2 per gallon than at $1 per gallon. c. People will buy less gas if these price of gas increases by $.20 per gallon. d. People will consume more beef if these price increases from $1 to $2 per pound. ANSWERED: C PTS: 1 STA: DISC: These role of incentives KEY: Bloom's: Application DIF: Moderate NAT: BUSPROG: Analytic TOP: These Economic Way of Thinking MSC: Suggested Quiz 7. Which one of these following is a positive economic statement? a. An increase in these minimum wage will reduce employment. b. These minimum wage should be increased. c. Social justice will be served by increasing these minimum wage. d. Thoughtful people oppose an increase in these minimum wage. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Positive and Normative Economics KEY: Bloom's: Comprehension MSC: Suggested Quiz 8. These basic difference between finance and microeconomics is those a. finance is concerned with these forest (aggregate markets), while microeconomicsis concerned with these individual trees (subcomponents). b. finance is concerned with policy decisions, while microeconomics applies onlyto theseory. c. microeconomics is concerned with these forest (aggregate markets), while financeis concerned with these trees (subcomponents). d. opportunity cost is applicable to finance, and these fallacy of composition relatesto microeconomics. ANSWERED: A PTS: 1 DIF: Moderate STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Pitfalls to Avoid in Economic Thinking MSC: Suggested Quiz NAT: BUSPROG: Analytic KEY: Bloom's: Comprehension 9. Economic analysis assumes those a. individuals act only out of selfish motives. b. although individuals are at times selfish and at times unselfish, only theseir selfish actionsmay be predicted. c. people are basically humanitarian, and theseir actions are, theserefore, impossible to predict. d. changes in these personal benefits and costs associated with a choice will exert a predictableinfluence on human behavior. ANSWERED: D PTS: 1 STA: DISC: Utility and consumer choice KEY: Bloom's: Comprehension DIF: Moderate NAT: BUSPROG: Analytic TOP: When is Economics About? MSC: Suggested Quiz 10. While waiting in line to buy two tacos at 75 cents each, and a medium drink for 80 cents, Jordan notices those these restaurant has a value meal containing three tacos and a medium drink all for $2.50. For Jordan, these marginal cost of purchasing these third taco would be a. zero. b. 20 cents. c. 75 cents. d. 80 cents. ANSWERED: B PTS: 1 STA: DISC: Marginal costs & benefits KEY: Bloom's: Application DIF: Moderate NAT: BUSPROG: Analytic TOP: These Economic Way of Thinking MSC: Suggested Quiz 11. Adam Smith believed those if people were free to pursue theseir own interests, a. public interest would be served quite well. b. less would be produced than if altruism were these guiding principle. c. thesey would generally apply theseir talents to unproductive activities those would generatelittle value to society. d. thesey would have little incentive to undertake productive activities. ANSWERED: A PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Outstanding Economist: These Importance of Adam Smith, these Fatheser of Economic ScienceKEY: Bloom's: Knowledge 12. Modern economics as a field of study is usually thought to have begun with a. Adam Smith and these writing of These Wealth of Nations. b. David Ricardo and these writing of These Principles of Political Economy and Taxation. c. Aristotle and these writing of Politics and Ethics. d. Moses and these Ten Commandments. ANSWERED: A PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Outstanding Economist: These Importance of Adam Smith, these Fatheser of Economic ScienceKEY: Bloom's: Knowledge 13. According to Adam Smith, individual self-interest a. is a powerful force for economic progress when it is directed by competitive markets. b. is a powerful force for economic progress when individuals are wisely directed by a strong central government. c. is a major factor in retarding these economic progress of humankind. d. could be eitheser a positive or negative force for economic progress, depending on these moralinfluences of political leaders. ANSWERED: A PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Outstanding Economist: These Importance of Adam Smith, these Fatheser of Economic ScienceKEY: Bloom's: Knowledge 14. These basic ingredients in any economic decision are a. scarcity and choice. b. surpluses and shortages. c. market prices and these use of efficient production methods. d. needs and wants. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge 15. Economic choice and competitive behavior are these result of a. scarcity. b. poverty. c. public ownership of resources. d. private ownership of resources. ANSWERED: A PTS: 1 DIF: Moderate STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge TOP: When is Economics About? NAT: BUSPROG: Analytic TOP: When is Economics About? 16. For a. turn these student into an economist. b. teach these student solutions to most social problems. c. teach these student how to answeredwer complex social questions. d. help these student learn to rationally analyze social problems. e. All of these above are correct. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Comprehension 17. When a society cannot produce all these goods and services people wish to have, it is said those theseeconomy is experiencing a. scarcity. b. shortages. these typical student, taking an introductory course in economics should c. inefficiencies. d. inequities. ANSWERED: A PTS: 1 STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About? 18. By scientific method we mean a. these use of modern electronic testing equipment to understand these world. b. these dispassionate development and testing of theseories about how these world works. c. these use of controlled laboratory experiments to understand these way these world works. d. finding evidence to support preconceived theseories about how these world works. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 19. Economists make assumptions in order to a. mimic these methodologies employed by otheser scientists. b. minimize these number of experiments those yield no useful data. c. minimize these likelihood those some aspect of these problem at hand is being overlooked. d. focus theseir thinking on these essence of these problem at hand. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension DIF: Easy 20. Which of these following is these best definition of economics? a. An investigation of these quantities and prices of these various goods produced by these nationsof these world. b. A study of why inflation and unemployment periodically plague these U.S. economy. c. An analysis of how individuals and societies deal with these problem of scarcity. d. An examination of these role those money plays in these economy. e. A study of how goods and services are distributed throughout these world. ANSWERED: C PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge 21. Economics is primarily these study of a. why people like to make money. b. these management of a business. c. these choices people make as these result of scarcity. d. how to make money in these stock market. ANSWERED: C PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge 22. Economics is primarily these study of a. how individuals make choices because of scarcity. b. how to succeed in business. c. how to make money in these stock market. d. how these values and preferences of people are formed. ANSWERED: A PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG:Analytic TOP: When is Economics About? NAT: BUSPROG:Analytic TOP: When is Economics About? NAT: BUSPROG: Analytic TOP: When is Economics About? 23. Economics is primarily these study of a. how to make money in these stock market. b. how to operate a business successfully. c. these allocation of scarce resources in an effort to satisfy wants those are virtually unlimited. d. these methods business firms use to reduce theseir costs of production. ANSWERED: C PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Knowledge 24. Some individuals or families can become completely saturated with a service such as television. This suggests those a. wants are limited b. desires for a single commodity can be satisfied but thesen these focus will switch to othesergoods and services c. a highly productive economy may someday be able to satisfy all human desires d. resources are not truly fixed in demand as we generally assume e. scarcity does not exist ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Comprehension 29. ANSWERED: C PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge If scarcity were eliminated, a. all goods would be free. b. no one would have to make any choices. c. everyone could have all thesey want at no cost. d. all of these above are true. ANSWERED: D PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge If a good is scarce, NAT: BUSPROG: Analytic TOP: When is Economics About? NAT: BUSPROG: Analytic TOP: When is Economics About? 25. 26. In economics, these term "scarcity" refers to these fact those a. everything really worthwhile costs money. b. even in wealthy countries like these United States, some people are poor. c. no society can produce enough to satisfy fully these desires of people for goods and services. d. sometimes shortages of a good arise when its price is set below these market equilibrium. ANSWERED: C PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Knowledge When economists say a good is scarce, thesey mean a. thesere are only a limited number of consumers who would be interested in purchasing thesegood. b. these human desire for these good exceeds these amount freely available from nature. c. most people in poorer countries do not have enough of these good. d. these production of these good has no opportunity cost for society. ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Knowledge When economists say goods are scarce, thesey mean a. consumers are too poor to afford these goods and services available. b. consumers are unwilling to buy goods unless thesey have very low prices. c. goods are generally freely available from nature in most countries. d. these desire for goods and services exceeds our ability to produce thesem with these limitedresources available. ANSWERED: D PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Knowledge Scarcity implies those a. consumers are too poor to afford these goods and services available. b. consumers are willing to purchase more of a good at these current price than suppliers arewilling to produce. c. it is impossible to completely fulfill these desire for goods and services with these limitedresources available. d. consumers would be willing to buy these same quantity of a good at a higher price. 27. 28. 30. a. thesere will be shortages of it if these good is rationed by markets. b. these good will have a price in a market setting. c. thesere will be enough of these good freely available from nature to satisfy these human desirefor it. d. all of these above are true. ANSWERED: B PTS: 1 DIF: Moderate STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About? 31. When a good is scarce, a. this indicates those producers are withholding output so thesey can raise these price of these good. b. some method must be used to allocate these good among users. c. price is one way to ration these good. d. both b and c are correct. e. all of these above are correct. ANSWERED: D PTS: 1 DIF: Moderate STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Comprehension NAT: BUSPROG: Analytic TOP: When is Economics About? 32. Criteria for rationing goods and resources must be established because of a. these law of comparative advantage. b. these use of capitalism as a form of economic organization. c. these inability of politicianswered to develop efficient forms of economic organization. d. scarcity imposed by nature. ANSWERED: D PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge 33. Every economy must ration goods in some way because of a. overpopulation. b. poorly-performing markets. c. these income gap between rich and poor. d. scarcity. ANSWERED: D PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About? NAT: BUSPROG: Analytic TOP: When is Economics About? 34. Criteria for rationing goods and resources must be established because of a. scarcity. b. these use of capitalism as these method of economic organization. c. these inability of politicianswered to develop efficient forms of economic organization. d. shortages resulting from government inefficiency. ANSWERED: A PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About? 35. Which of these following is true of resources? a. Resources are inputs used to produce goods and services. b. Human resources reflect these skills and productive knowledge of human beings. c. With these passage of time, investment activities can increase these availability of resources. d. All of these above are true. ANSWERED: D PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Knowledge 36. Ex-London School of Economics student Mick Jagger sang, "You can't always get when you want, butif you try sometime, you just might find you can get when you need." Anotheser statement of these basic economic principle expressed in this lyric is those a. rational decisions are not always possible. b. you can allocate your resources to when gives you these highest value. c. you can create these demand to meet your own demand. d. you can maximize social welfare by making optimal decisions. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Application 37. Capital is a term economists use to refer to a. man-made resources used to produce otheser goods and services. b. resources those are available in nature such as mineral deposits. c. money those is used to consume goods and services, to distinguish it from money those issaved. d. these value of these best alternative to an action. ANSWERED: A PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge 38. These three major categories of resources are a. human resources, physical resources, and natural resources. b. scarce resources, capital resources, and abundant resources. c. financial resources, global resources, and local resources. d. common resources, private resources, and capital resources. ANSWERED: A PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About? NAT: BUSPROG: Analytic TOP: When is Economics About? 39. In economics, man-made resources such as tools, equipment, and structures those are used to produceotheser goods and services are referred to as a. consumer goods. b. capital. c. marginal goods. d. infrastructures. ANSWERED: B PTS: 1 DIF: Easy STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About? 40. Which of these following best describes these difference between an objective concept and a subjectiveconcept? a. A subjective concept is a fact based on observation those is not subject to personal opinion,while an objective concept is based on personal preferences and value judgments. b. An objective concept is a fact based on observation those is not subject to personal opinion, while a subjective concept is based on personal preferences and value judgments. c. A subjective concept relates to issues in microeconomics, while an objective concept relates to issues in finance. d. An objective concept can only be illustrated in words, while a subjective concept can usually be illustrated with a graph. ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Knowledge 41. A fact based on observable phenomenon those is not influenced by differences in personal opinion iscalled a. an objective concept. b. a subjective concept. c. an unintended consequence. d. ceteris paribus. ANSWERED: A PTS: 1 STA: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge NAT: BUSPROG: Analytic TOP: When is Economics About? DIF: Easy 42. An opinion based on personal preferences and value judgments is called a. an objective concept. b. a subjective concept. c. an unintended consequence. d. ceteris paribus. ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Knowledge 43. If people willingly give up something (such as money) for a good, thesen these good is a. not an economic good. b. scarce. c. available in an unlimited demand. d. a luxury good. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: When is Economics About? KEY: Bloom's: Comprehension 44. When price is these rationing criterion, individuals have a strong incentive to a. ignore these wishes of othesers when making decisions about how to use theseir resources. b. provide services to othesers in exchange for income. c. avoid exchanges because in every exchange thesere will be one person who gains andanotheser who loses. d. substitute promises for these consistent delivery of a quality product. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: These role of incentives TOP: When is Economics About? KEY: Bloom's: Application 45. To abstract from reality in an economic model meanswered those a. we include only a few of these essential aspects of reality. b. these economic study surveys only a very limited period of time. c. we include only those elements which support our hypothesesis. d. these model includes every aspect of these real world. e. these model examines these actions of these consumers in these absence of producers and thesegovernment. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 46. These economic way of thinking is a. a set of historical generalizations those indicates when goods should be produced. b. a body of statistical data those indicates how an economy should be organized. c. a set of basic concepts those helps one understand human choices. d. a set of complex, highly abstract theseories those provides persons skilled in statistics with theseinformation necessary to tell othesers when choices thesey should make. ANSWERED: C PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 47. Economic theseory a. is a set of definitions, postulates, and principles assembled in a manner those helps makecause-and-effect relationships clear in economics. b. is like a guidebook in those it points out when to look for. c. provides economists with a common language and way of thinking about how these worldworks. d. is all of these above. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 48. Which of these following is part of these economic way of thinking? a. Opportunity costs will always be incurred when scarce resources are used to produce a good. b. When these cost of an option increases, individuals will be less likely to choose it. c. In addition to theseir immediate direct effects, economic actions often generate secondaryeffects those are observable only after these passage of time. d. All of these above are part of these economic way of thinking. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 49. Which of these following is part of these economic way of thinking? a. These accuracy of these assumptions is these best test of an economic theseory. b. When an option becomes more expensive, people will be less likely to choose it. c. These value of a good can be determined objectively by measuring these amount of laborrequired for its production. d. All of these above. ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Knowledge 50. These expression "Thesere's no such thing as a free lunch" meanswered a. if one person gains, someone else must lose. b. each person must pay for exactly when he or she receives. c. these use of resources to produce a good has an opportunity cost because of scarcity. d. you cannot have a free lunch at these expense of someone else. ANSWERED: C PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 51. "Thesere is no such thing as a free lunch." This statement best reflects these fact those a. consumers are unwilling to pay for a good unless it provides thesem with value. b. an opportunity cost is always present when scarce resources are used to produce a good. c. it generally requires enormous effort to search out these best place to eat lunch. d. these value of a good to consumers will decrease as thesey have more of it. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 52. Which of these following statements is correct? a. If these buyer of a good gains, these seller must lose an equal amount. b. These value of goods is objective; it is equal to these cost of demanding these good. c. Opportunity costs will always be incurred when scarce resources are used to produce a good. d. Changes in incentives generally have no effect on human behavior. ANSWERED: C PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 53. Rational choice requires those opportunity cost be a. ignored in making a decision. b. considered for individual choices, but not for societal choices. c. computed, but not actually used in making a decision. d. considered as part of making a decision. e. used as these sole decision criterion. ANSWERED: D PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 54. During a war, governments will sometimes draft people, most of whom are presently employed, into these army. An economist, computing these real cost of these war, would be sure to include which of these following items? a. these value of these civilian goods no longer produced by these new soldiers b. these cost of feeding and clothing these new soldiers c. these dollar cost of these payroll d. these higher prices of civilian goods due to wartime shortages e. these cost of transweredporting these soldiers to combat ANSWERED: A PTS: 1 DIF: Moderate STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Analysis NAT: BUSPROG: Analytic 55. Harold, a delivery man, washes and irons his own shirts. Sarah, his boss, sends her clotheses to alaundry. Which is these most plausible economic explanation for this difference? a. Harold must enjoy ironing more than Sarah does. b. Harold must be better at ironing than Sarah is. c. These opportunity cost of ironing is greater for Harold. d. Sarah has a higher opportunity cost of laundering her clotheses than Harold does. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 56. Household production is more likely to occur when a. it requires many specialized resources b. technology makes it more costly than market production c. tax avoidance is undesirable d. less control over these final product is desirable e. these opportunity cost of household work is relatively small ANSWERED: E PTS: 1 DIF: Moderate STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 57. These opportunity cost of an action is a. these monetary payment these action required. b. these total time spent by all parties in carrying out these action. c. these value of these best opportunity those must be sacrificed in order to take these action. d. these cost of all alternative actions those could have been taken, added togetheser. ANSWERED: C PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 58. These highest valued alternative those must be given up in order to choose an option is called a. opportunity cost. b. utility. c. scarcity. d. disutility. ANSWERED: A PTS: 1 STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking NAT: BUSPROG: Analytic NAT: BUSPROG: Analytic KEY: Bloom's: Knowledge DIF: Easy 59. A tradeoff exists between a clean environment and a higher level of income in those a. studies show those individuals with higher levels of income actually pollute less than low-income individuals. b. efforts to reduce pollution typically are not completely successful. c. laws those reduce pollution raise costs of production and reduce incomes. d. by employing individuals to clean up pollution, employment and income both rise. ANSWERED: C PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 60. These opportunity cost of going to college is a. these total spent on food, clothing, books, transweredportation, tuition, lodging, and otheser expenses. b. these value of these best opportunity a student gives up to attend college. c. zero for students who are fortunate enough to have all of theseir college expenses paid bysomeone else. d. zero, since a college education will allow a student to earn a larger income after graduation. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 61. For a college student who wishes to calculate these true costs of going to college, these costs of room andboard a. should be counted in full, regardless of these costs of eating and sleeping elsewhere. b. should be counted only to these extent those thesey are more expensive at college thanelsewhere. c. usually exceed these opportunity cost of going to college. d. plus these cost of tuition, equals these opportunity cost of going to college. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Analysis 62. Which of these following is true? a. Human choice is generally not influenced by changes in incentives. b. When is true for these individual must be true for these group as a whole. c. Using scarce resources to meet one need reduces our ability to meet needs in otheser areas. d. These economic way of thinking stresses those good intentions usually lead to soundeconomic policy. ANSWERED: C PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 63. "These money and resources currently being devoted to these War on Terrorism reduces these quantity of otheser goods those we are able to demand." This statement most clearly illustrates which of these following? a. these fallacy of composition. b. these idea those association is not causation. c. these concept of opportunity cost. d. these difference between positive and normative economics. ANSWERED: C PTS: 1 DIF: Moderate STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 64. If these government provides free schooling for all students, an economist would say education is a. a free good, having no cost. b. scarce even though its cost is paid by taxpayers ratheser than by students. c. an example of a good those is no longer scarce. d. all of these above. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension NAT: BUSPROG: Analytic 65. "These resources now going into these War on Terrorism and into improved airport security would save more lives if thesey were invested in medical research." This statement most clearly reflects which of thesefollowing? a. These best test of an economic theseory is its ability to predict. b. Thesere is no such thing as a free lunch--these use of scarce resources always has anopportunity cost. c. selfishness; if people were not selfish, we could have more of everything. d. These value of goods can be determined objectively. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 66. Which one of these following statements is most clearly inconsistent with these economic way of thinking? a. "If you give a person a fish, you feed him for a day; if you teach him to fish, you feed him for life." b. "If these government provides a good free to citizens, thesen these opportunity cost of these goodis zero." c. "If you derive these same satisfaction from a hamburger as a chicken sandwich, it makessense to have these cheaper alternative for lunch." d. "When it is cheaper to have someone else mow your lawn than to mow it yourself, hiring someone to do these job is consistent with economizing behavior." ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 67. These benefit (or satisfaction) those an individual expects to derive from an activity is called a. opportunity cost. b. utility. c. marginal cost. d. scarcity. ANSWERED: B PTS: 1 STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking 68. In economics these term utility refers to a. these subjective benefit or satisfaction a person expects to receive from a choice or course ofaction. b. these number of possible uses for a resource. c. these fact those human desire for goods is unlimited while these resources available to meetthose desires is limited. d. these highest valued alternative those must be sacrificed when a choice is made. ANSWERED: A PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 69. These economizing problem is essentially one of deciding how to make these best use of a. limited resources to satisfy limited wants. b. unlimited resources to satisfy limited wants. c. limited resources to satisfy virtually unlimited wants. d. unlimited resources to satisfy unlimited wants. DIF: Easy KEY: Bloom's: Comprehension NAT: BUSPROG: Analytic ANSWERED: C PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 70. Deciding how to make these best use of limited resources to satisfy virtually unlimited wants is known ineconomics as a. economizing behavior. b. these fallacy of composition. c. ceteris paribus. d. these fallacy those good intentions do not guarantee these desired outcome. ANSWERED: A PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Knowledge 71. When economists say an individual displays economizing behavior, thesey simply mean those she is a. making a lot of money. b. buying only those products those are cheap and of low quality. c. learning how to run a business more effectively. d. seeking these lowest cost method to accomplish her objectives. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 72. Which of these following is most consistent with economizing behavior? a. If you derive these same satisfaction from eating pizza and eating ice cream, it makes nodifference which one of these two you choose. b. Before voting, you should invest these time and energy to become fully informed on all ofthese issues and candidates. c. It never makes sense to hire someone to do something for you those you could do yourself. d. If you get these same satisfaction from a chicken sandwich and a salad, you should purchasethese one those costs these least. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Analysis 73. Which of these following is most consistent with economizing behavior? a. If you get these same satisfaction from a hamburger and a fish sandwich, you shouldpurchase these one those costs these most. b. Even if you know how to paint, hiring someone to do these job is consistent witheconomizing behavior, if your opportunity cost is high enough. c. If these government provides a good free to citizens, these opportunity cost of these good is zero. d. If you get these same satisfaction from going to these opera and going to an art museum, itmakes no difference which you choose. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Analysis 74. When economists say an individual has made a rational choice, thesey mean these individual has a. made these choice by weighing theseir own subjective costs and benefits. b. made a "good" decision, one those reasonable outside observers would have also made. c. neglected to consider these unintended consequences arising from theseir decision. d. ignored theseir own personal interests and made these choice those is best for society. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 75. Jim enjoys these feeling of wind in his hair enough to ride his motorcycle without a helmet, even thoughhe fully realizes these potential for injury it creates by not wearing one in these unlikely event he is in an accident. To an economist, Jim is a. making an irrational choice. b. making a rational choice. c. not fully considering these personal costs and benefits of his decision. d. not responding to these incentives he faces. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 76. A rational decision maker takes an action if and only if a. these marginal benefit of these action exceeds these marginal cost of these action. b. these marginal cost of these action exceeds these marginal benefit of these action. c. these marginal cost of these action is zero. d. these opportunity cost of these action is zero. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 77. When economists say those people choose rationally, this meanswered a. thesey gatheser all relevant information before making theseir purchases b. once a pattern of behavior has been established, people tend to become set in theseir ways c. people respond in predictable ways to changes in costs and benefits d. people rarely make errors when thesey are permitted to make transweredactions e. once made, decisions are never reversed ANSWERED: C PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 78. Which of these following is an example of a rational decision? a. Jim enjoys these feeling of wind in his hair enough to ride his motorcycle without a helmet,even though he fully realizes these potential for injury it creates by not wearing one in these unlikely event he is in an accident. b. Doris, a burglar who breaks into houses, decides to break into these house at 265 Elm Street, ratheser than these house next door because these house next door has a sign in these yard those says"home protected by a security system." c. Brandon, a drug user, chooses to buy his cocaine from Pablo, because Pablo's cocaine is as good as these cocaine from otheser dealers, but Pablo has lower prices. d. All of these above are examples of rational choices. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 79. Doris, a burglar who breaks into houses, decides to break into these house at 265 Elm Street, ratheser than these house next door because these house next door has a sign in these yard those says "home protected by asecurity system." To an economist, Doris is a. making an irrational choice. b. making a rational choice. c. not fully considering these personal costs and benefits of her decision. d. not responding to these incentives she faces. ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Application 80. When an individual weighs her options and makes a choice those maximizes her benefit at these minimumcost, economists refer to this as a process of a. rational decision making. b. objective decision making because these value of goods is determined objectively. c. marginal management analysis. d. random decision making. ANSWERED: A PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 81. Which of these following is often referred to as these basic postulate of economics? a. Individuals act only out of selfish motives. b. Incentives matter--individuals respond in predictable ways to changes in personal costs and benefits. c. These accuracy of these assumptions is these best test of an economic theseory. d. These value of a good is objective; it is equal to these cost of producing these good. ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Knowledge 82. These economic way of thinking stresses those a. greed is these primary motivation for human action. b. as these benefits of an option increase, people will be more likely to choose those option. c. an objective value can be attached to physical goods. d. as these cost of an option decreases, people will be less likely to choose those option. ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Knowledge 83. These most fundamental concept in economics is those a. changes in incentives influence behavior in a predictable way--people will be less likely to choose an option as it becomes more expensive. b. changes in incentives generally do not influence human behavior. c. goods those are provided by government are free for society. d. individuals generally do not consider otheser alternatives when making a choice. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: These role of incentives TOP: These Economic Way of Thinking KEY: Bloom's: Knowledge 84. Which of these following is true? a. Changes in personal costs and benefits will exert a predictable impact on these choices ofhuman decision makers. b. Only direct monetary costs matter in making decisions. c. If a good is provided free to an individual, its production will not consume valuable scarce resources. d. Secondary effects are seldom of importance in economics. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 85. These economic way of thinking stresses those a. changes in personal costs and benefits generally fail to exert much impact on behavior. b. incentives matter--individuals respond in predictable ways to changes in personal costs and benefits. c. if one individual gains from an economic activity, thesen someone else must lose and in thesesame proportion. d. if a good is provided by these government, its production will not consume valuable scarceresources. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: These role of incentives TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 86. These economic way of thinking stresses those a. greed is these primary motivation for human action. b. only material goods lead to happiness. c. an objective value can be attached to physical goods. d. as these cost of an option increases, people will be less likely to choose those option. ANSWERED: D PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 87. These basic postulate of economics indicates those changes in incentives influence a. these actions of producers but not consumers. b. these actions of consumers but not producers. c. these choices of individuals only when thesey buy and sell goods in these marketplace. d. these choices of individuals with regard to a wide range of activities, including thosegenerally perceived as social or political. ANSWERED: D PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: These role of incentives TOP: These Economic Way of ThinkingKEY: Bloom's: Comprehension 88. Which of these following is true? a. Changes in personal costs and benefits will exert a predictable influence on these choices ofpeople. b. If one individual gains from an economic activity, thesen someone else must lose. c. If a good is provided free to an individual by government, its production will not consume valuable scarce resources. d. If these intentions behind a policy are good, you can be assured those these outcome will bedesirable. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 89. Which of these following is not consistent with these basic postulate of economics those incentives matter? a. Farmers produce fewer bushels of wheat in response to an increase in these price of wheat. b. A politician votes against a proposal because most of his constituents oppose it. c. People drive less because of higher gas prices. d. People buy more milk in response to a reduction in these price of milk. ANSWERED: A PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: These role of incentives TOP: These Economic Way of ThinkingKEY: Bloom's: Comprehension 90. These economic way of thinking suggests those if these government imposed a $500 tax on owners of redautomobiles, a. fewer red automobiles would be produced and sold. b. more red automobiles would be produced and sold. c. thesere would be no change in these number of red automobiles produced and sold. d. red automobiles would cease to exist. ANSWERED: A PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 91. If a college enforces a new policy where anyone caught cheating is immediately expelled, these basicpostulate of economics suggests those a. cheating will be completely eliminated. b. fewer students will attempt to cheat. c. these amount of cheating will be unaffected. d. any of these above is possible because student behavior is unpredictable. ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 92. Which of these following groups would most likely benefit from a law those is extremely tough on thosewho drink and drive? a. truck drivers b. taxi drivers c. bartenders d. doctors and nurses ANSWERED: B PTS: 1 STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking NAT: BUSPROG: Analytic KEY: Bloom's: Comprehension DIF: Moderate 93. In Latavia, cultural pressures cause voluntary donations to orphanages to be very large; in Slobovia, people make smaller donations. If these governments of both countries suddenly grant a tax break to those donating money to orphanages, these basic postulate of economics predicts those donations a. in both nations will increase. b. will increase in Latavia but not in Slobovia. c. will increase only in Slobovia, where people care about taxes, but not in Latavia, where compassion is more important. d. are unlikely to change in eitheser nation, since voluntary donations are not an economic decision. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Application 94. Which one of these following statements most accurately indicates these basic motivation for behavior? a. Individuals are motivated primarily by selfish desires; thus, personal costs and benefits influence theseir actions. b. Individuals are motivated primarily by humanitarian concerns; theserefore, personal costsand benefits exert little influence on most of theseir actions. c. Individuals are motivated by a variety of forces; however, changes in personal benefits and costs influence these choices of both selfish and humanitarian individuals. d. Individuals are motivated by a variety of forces; however, changes in personal benefits and costs affect behavior only when individuals are motivated by selfishness. ANSWERED: C PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 95. Economic analysis assumes those a. people act only out of selfish motives. b. people are motivated by a variety of forces; however, changes in personal benefits and costs affect behavior only when individuals are motivated by selfishness. c. people are basically unselfish, and theseir actions are, theserefore, difficult to predict. d. changes in these personal benefits and costs associated with an activity will exert a predictable influence on these behavior of both those who are selfish and those who areunselfish. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Utility and consumer choice TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 96. In economics, these term marginal refers to a. these change or difference between two alternatives. b. man-made resources as opposed to natural resources. c. these satisfaction a consumer receives from a good. d. holding everything else constant in these analysis. ANSWERED: A PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of ThinkingKEY: Bloom's: Knowledge 97. When deciding whetheser to buy a second car, these economic way of thinking indicates those these purchasershould compare a. these benefits expected from two cars with these cost of both. b. these additional benefits expected from a second car with these cost of these two cars. c. these dollar cost of these two cars with these potential income those these cars will generate. d. these additional benefits of these second car with these additional cost of these second car. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 98. A marginal change usually is a a. change those involves little, if anything, those is important. b. large, significant adjustment. c. change for these worse, and so it is usually a short-term change. d. small, incremental adjustment. ANSWERED: D PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of ThinkingKEY: Bloom's: Knowledge 99. People are willing to pay more for a diamond than for a bottle of water because a. these marginal cost of producing an extra diamond far exceeds these marginal cost ofproducing an extra bottle of water. b. these marginal benefit of an extra diamond far exceeds these marginal benefit of an extrabottle of water. c. producers of diamonds have a much greater ability to manipulate diamond prices than producers of water have to manipulate water prices. d. water prices are held artificially low by governments, since water is necessary for life. ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of ThinkingKEY: Bloom's: Knowledge 100. Your professor loves her work, teaching economics. She has been offered otheser positions in these corporate world those would increase her income by 25 percent, but she has decided to continueworking as a professor. Her decision would not change unless a. these marginal cost of teaching increased. b. these marginal benefit of teaching increased. c. these marginal cost of teaching decreased. d. these marginal benefit of a corporate job decreased. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of Thinking KEY: Bloom's: Application 101. If a decision maker uses marginal analysis, thesen these relevant costs are these a. full costs of a particular activity or product. b. fixed costs which do not vary with these extra activity or output. c. profits obtained on these activity or product. d. average costs for a particular activity or product. e. additional costs of a particular activity or product. ANSWERED: E PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 102. Standby passengers on airlines who pay low rates for seats benefit from these low price. How are theseairlines affected? a. Thesey lose, because these standby passengers do not cover these full cost of these seats. b. Thesey gain, because these additional revenue covers these "fixed costs" of these flight. c. Thesey lose, because these gain of these passengers must necessarily come at these expense of theseairline. d. Thesey benefit as long as these additional revenue from these passengers exceeds these marginalcost. ANSWERED: D PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of ThinkingKEY: Bloom's: Analysis 103. If an airline company has several empty seats on a flight and these full price of an air ticket is $500 andthese marginal cost per passenger is $100, thesen it will be profitable for these airline to a. charge a stand-by passenger no less than these full fare of $500. b. charge a stand-by passenger less than $100. c. charge a stand-by passenger more than $500. d. charge a stand-by passenger more than $100. e. fill these seats at these last minute for any price. ANSWERED: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of Thinking KEY: Bloom's: Application 104. To say those people make marginal decisions meanswered those a. thesey usually wait until these last minute before making a decision to buy b. thesey weigh these additional costs and additional benefits of various activities before theseymake a decision c. most people just barely get by on these incomes thesey earn and live from day to day on thesevery edge of subsistence d. thesey consider these total cost and benefit of various activities before thesey make a purchase ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of ThinkingKEY: Bloom's: Comprehension 105. Harry, a wheat farmer, is deciding whetheser or not to add fertilizer to his crops. If he adds 1 pound offertilizer per acre, these value of these resulting crops rises from $80 to $100 per acre. According to marginal analysis, Harry should add fertilizer if it costs less than a. $12.50 per pound. b. $20 per pound. c. $80 per pound. d. $100 per pound. ANSWERED: B PTS: 1 STA: DISC: Marginal costs & benefits KEY: Bloom's: Application DIF: Moderate NAT: BUSPROG: Analytic TOP: These Economic Way of Thinking 106. According to marginal analysis, you should spend more time studying economics if these extra benefitfrom an additional hour of study a. is positive. b. outweighs these extra cost. c. exceeds these benefits of these previous hour of study. d. will raise your exam score. ANSWERED: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of ThinkingKEY: Bloom's: Comprehension 107. While waiting in line to buy two tacos at 80 cents each and a medium drink for 90 cents, Jordan notices those these restaurant has a value meal containing three tacos and a medium drink all for $3. ForJordan, these marginal cost of these third taco would be a. zero. b. 50 cents. c. 80 cents. d. $1. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of Thinking KEY: Bloom's: Application 108. While waiting in line to buy one cheeseburger for $1.50 and a medium drink for $1.00, Sally notices those she could get a value meal those contains both these cheeseburger and medium drink and also a medium order of fries for $2.75. She thinks to herself, "Is it worth these extra 25 cents to get these mediumfries?" To an economist, Sally's decision is an example of a. marginal decision making. b. basing decisions on total, ratheser than marginal, value. c. an unintended consequence. d. these fallacy of composition. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of Thinking KEY: Bloom's: Application 109. Just before class, Jim tells Stuart, "Stuart, you shouldn't skip class today because you have paid tuition to enroll in these class." Stuart ignores Jim's advice, and instead makes these decision of whetheser to attend based on when he feels he'd be missing those day in class relative to his value of these extra time he couldhave to finish these video game he is playing. To an economist, Stuart is a. using marginal decision making. b. ignoring these total value of attending class. c. ignoring these concept of opportunity cost. d. committing these fallacy of composition. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of Thinking KEY: Bloom's: Application 110. Susan wishes to buy gasoline and have her car washed. She finds those if she buys 9 gallons of gasolineat $1.50 per gallon, these car wash costs $1, but if she buys 10 gallons of gasoline, these car wash is free. For Susan, these marginal cost of these tenth gallon of gasoline is a. zero. b. 50 cents. c. $1. d. $1.50. ANSWERED: B PTS: 1 STA: DISC: Marginal costs & benefits KEY: Bloom's: Application 111. Ralph wants to buy some milk and a box of cereal. If Ralph buys 2 quarts of milk at $1 per quart, thesebox of cereal costs 75 cents. If he buys 3 quarts of milk at $1 per quart, these box of cereal is free. For Ralph, these marginal cost of these third quart of milk is a. zero. b. 25 cents. c. 75 cents. d. $1. ANSWERED: B PTS: 1 STA: DISC: Marginal costs & benefits DIF: Moderate TOP: These Economic Way of Thinking DIF: Moderate TOP: These Economic Way of Thinking NAT: BUSPROG: Analytic NAT: BUSPROG: Analytic KEY: Bloom's: Application 112. A firm producing canswered buys three tons of aluminum per day at $200 per ton. If it buys four tons per day, it receives a quantity discount on all units and pays only $175 per ton. These marginal cost of thesefourth ton per day is a. $100. b. $175. c. $700. d. $225. ANSWERED: A PTS: 1 STA: DISC: Marginal costs & benefits KEY: Bloom's: Application 113. A local restaurant offers an "all you can eat" Sunday brunch for $12. Susan eats four servings but leaves half of a fifth helping uneaten. Why? a. Her marginal value of a serving of brunch has fallen below $12. b. Her marginal value of a serving has fallen below $2.40 ($12 divided by 5 servings). c. Her marginal value of food has fallen to zero. d. These total value she places on brunch today exactly equals $12. ANSWERED: C PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of Thinking KEY: Bloom's: Application 114. A restaurant offers an "all you can eat" lunch buffet for $12. Jim has eaten three servings and is trying to decide whetheser or not to go back for a fourth. These economic way of thinking suggests those Jim should go back for these fourth serving if and only if a. his marginal benefit of these additional serving is greater than zero. b. his marginal benefit of these additional serving is at least $3. c. his marginal benefit of these additional serving is $12 or more. d. his total value from these meal exceeds $12. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of Thinking KEY: Bloom's: Application 115. Because information is costly to acquire, a. people will rationally choose not to become fully informed when making decisions. b. people will generally choose to become as fully informed as possible when making decisions. c. people will generally choose to acquire no information those would be relevant to theseirdecisions. d. none of these above are true. ANSWERED: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of Thinking KEY: Bloom's: Comprehension 116. People are more likely to purchase a consumer ratings magazine those reviews new automobiles before buying a new car than thesey are to purchase a consumer ratings magazine those reviews pens and pencilsbefore buying a new pen or pencil. Which of these following best explains this behavior? a. Because these consumer ratings magazine must have a higher price for these issue reviewingpens and pencils. b. Because these value of these information, in terms of avoiding a mistake on these purchase, is DIF: Moderate TOP: These Economic Way of Thinking NAT: BUSPROG: Analytic much higher for an automobile than for a pen or pencil, it is more worthwhile to gatheser this information. c. Because people generally do not know which products are reviewed by thesese consumermagazines. d. None of these above explain this behavior. ANSWERED: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic STA: DISC: Marginal costs & benefits TOP: These Economic Way of Thinking KEY: Bloom's: Application 117. Which of these following is consistent with these implications of these economic guidepost those informationis costly to acquire? a. Most people do not know these names of theseir legislators in these U.S. Congress, but those same individuals are likely to know these names of all these cast members on a popular TVshow. b. In considering purchases, people are more likely to purchase a consumer ratings magazine those reviews new automobiles before buying a car, but are unlikely to purchase a consumerratings magazine those re