Sophia Microeconomics Unit 1 Exam Questions And Answers All Correct

Sophia Microeconomics Unit 1 Exam Questions And Answers All Correct Microeconomics focuses mainly on the study of decisions made by __________. a.) firms and national governments b.) individuals and firms c.) local and national governments d.) individuals and local governments - CORRECT ANSWERS b.) individuals and firms Macroeconomics studies the behavior of __________. a.) households b.) individuals c.) an economy in its entirety d.) firms - CORRECT ANSWERS c.) an economy in its entirety Which of the following statements describes macroeconomics? a.) It is an academic discipline that looks at variables that affect the quality of human life. b.) It looks at the overall ups and downs of the economy. c.) It looks at how individuals and entities optimize the decisions they make. d.) It considers the behavior of individuals and firms on an individual level. - CORRECT ANSWERS b.) It looks at the overall ups and downs of the economy. Ben was offered a full-time position working on his uncle's construction crew and would be paid $20 per hour. Instead, Ben chose to take classes at the local college so he could finish his degree. In economic terms, this loss of potential income is known as a(n) __________. a.) utility maximization b.) marginal utility c.) cost/benefit analysis d.) opportunity cost - CORRECT ANSWERS d.) opportunity cost Which of the following is a characteristic of a rational consumer? a.) Rational consumers assume unlimited resources when making decisions. b.) Rational consumers aim to increase profit when making decisions. c.) Rational consumers reduce the quantity demanded when prices decrease. d.) Rational consumers analyze costs and benefits when making decisions. - CORRECT ANSWERS d.) Rational consumers analyze costs and benefits when making decisions. Which of the following best describes a rational consumer? a.) Purchases when the cost is greater than the additional benefit b.) Uses infinite resources to maximize consumption c.) Wants to make choices that maximize utility d.) Has limited wants and needs - CORRECT ANSWERS c.) Wants to make choices that maximize utility Which of the following statements is true as it relates to labor/leisure trade-off? a.) If someone works a lot it can be assumed they have a lot of leisure time too. b.) It is necessary to consider the resources necessary for production with a labor/leisure trade-off. c.) It is the comparison of time spent working to time spent participating in non-work activities. d.) Everyone has the same labor/leisure trade-off. - CORRECT ANSWERS c.) It is the comparison of time spent working to time spent participating in non-work activities. Terry currently works a part-time evening job on campus. With this job, he has free time on the weekends to hang out with his friends and catch up on school work. However, a nearby shoe store, Speedy Feet, is hiring for $10/hour. He would be able to earn a higher income and a significant discount on running gear that he would be buying anyway. Terry has to take into consideration which of the following economic principles when deciding whether to forego his current job at the university in favor of a job at the shoe store? a.) Explicit cost b.) Production constraints c.) Labor/leisure trade-off d.) Utility maximization - CORRECT ANSWERS c.) Labor/leisure trade-off