Question 1

You have an hour between your economics and math classes.What is the opportunity cost of that time if you use it to do math homework?

Accepted Answer

A) It depends on what you would do if you had no math homework. 
B) It depends on how much you like math. 
C) zero,because an hour isn't long enough to go to a paying job 
D) zero,because it doesn't cost any money to do your math homework 
A) It depends on what you would do if you had no math homework. 
B) It depends on how much you like math. 
C) zero,because an hour isn't long enough to go to a paying job 
D) zero,because it doesn't cost any money to do your math homework

Question 2

In order to go to college,James incurs an opportunity cost even though all he gave up was a full time job as a clerk at Wally World.

Accepted Answer

A) True 
 B)False

Question 3

Opportunity cost is the difference between the benefit and cost of some action.

Accepted Answer

A) True 
 B)False

Question 4

When does voluntary exchange take place?

Accepted Answer

When both parties ex

Question 5

The government uses the buying power of wages rather than face value or nominal value in reporting changes in "real wages" in the economy.

Accepted Answer

A) True 
 B)False

Question 6

Figure 2.4
-Joe runs a business and needs to decide how many hours to stay open.Figure 2.4 illustrates his marginal benefit of staying open for each additional hour.Suppose that we observe Joe staying open 4 hours per day.If he is following the marginal principle,what must his marginal cost be?

Accepted Answer

A) $16 
B) $24 
C) $32 
D) $40 
A) $16 
B) $24 
C) $32 
D) $40

Question 7

Table 2.3
-The firm depicted in Table 2.3 is facing diminishing returns because:

Accepted Answer

A) capital and labor are both fixed. 
B) capital and labor are both variable. 
C) capital is fixed. 
D) the number of workers can only be increased to 5. 
A) capital and labor are both fixed. 
B) capital and labor are both variable. 
C) capital is fixed. 
D) the number of workers can only be increased to 5.

Question 8

Figure 2.1
-On the production possibilities curve in Figure 2.1 the gain from decreasing manufacturing production from 700 tons to 500 tons is:

Accepted Answer

A) 700 tons of agriculture. 
B) 500 tons of agriculture. 
C) 200 tons of agriculture. 
D) 100 tons of agriculture. 
A) 700 tons of agriculture. 
B) 500 tons of agriculture. 
C) 200 tons of agriculture. 
D) 100 tons of agriculture.

Question 9

Figure 2.1
-Referring to Figure 2.1,if you increase the production of farm goods,what other area is affected?

Accepted Answer

A) the price of produce 
B) the production of factory goods 
C) how much people can purchase 
D) the wages earned by farm workers 
A) the price of produce 
B) the production of factory goods 
C) how much people can purchase 
D) the wages earned by farm workers

Question 10

Figure 2.2
-Figure 2.2 presents a production possibilities curve for a country that can either produce highways or provide people with medical care in a given year.The figure shows that the production possibilities curve is:

Accepted Answer

A) bowed inward. 
B) bowed outward. 
C) a straight line. 
D) bowed inward and then outward. 
A) bowed inward. 
B) bowed outward. 
C) a straight line. 
D) bowed inward and then outward.

Question 11

Figure 2.3
-In Figure 2.3,point A:

Accepted Answer

A) implies unemployment of some resources. 
B) is the optimum. 
C) cannot be produced. 
D) all of the above. 
A) implies unemployment of some resources. 
B) is the optimum. 
C) cannot be produced. 
D) all of the above.

Question 12

A "market" is an arrangement that enables people to exchange goods and services.

Accepted Answer

A) True 
 B)False

Question 13

What is the nominal value of money?

Accepted Answer

A) what can be purchased with the money 
B) discounts taken by multiple purchases 
C) savings by shopping on specific days of the week 
D) its actual face value 
A) what can be purchased with the money 
B) discounts taken by multiple purchases 
C) savings by shopping on specific days of the week 
D) its actual face value

Question 14

The notion of opportunity cost allows the measurement of tradeoffs.

Accepted Answer

A) True 
 B)False

Question 15

What is the opportunity cost of your college degree?

Accepted Answer

A quick answer would be to say that the

Question 16

Suppose prices increase by 3% per year.What nominal percentage return on your savings account would you require to get a 3% real return?

Accepted Answer

A) 3% 
B) 6% 
C) 8% 
D) 9% 
A) 3% 
B) 6% 
C) 8% 
D) 9%

Question 17

Increase the level of an activity if its marginal benefit exceeds its marginal cost;reduce the level of an activity if its marginal cost exceeds its marginal benefit.This is known as the ________.

Accepted Answer

The answer of Increase the level of an activity if...

Question 18

The opportunity cost of going to college:

Accepted Answer

A) is zero if your parents pay your tuition. 
B) is equal to the cost of tuition,room and board,and other expenses. 
C) includes wages you lose by going to school instead of working. 
D) is the same for all students at a particular school who pay full tuition. 
A) is zero if your parents pay your tuition. 
B) is equal to the cost of tuition,room and board,and other expenses. 
C) includes wages you lose by going to school instead of working. 
D) is the same for all students at a particular school who pay full tuition.

Question 19

By making acquisitions,resources are used that could have been used to ________.

Accepted Answer

acquire so

You have an hour between your economics and math classes.What is the opportunity cost of that time if you use it to do math homework?

In order to go to college,James incurs an opportunity cost even though all he gave up was a full time job as a clerk at Wally World.

Opportunity cost is the difference between the benefit and cost of some action.

When does voluntary exchange take place?

The government uses the buying power of wages rather than face value or nominal value in reporting changes in "real wages" in the economy.

Figure 2.4 -Joe runs a business and needs to decide how many hours to stay open.Figure 2.4 illustrates his marginal benefit of staying open for each additional hour.Suppose that we observe Joe staying open 4 hours per day.If he is following the marginal principle,what must his marginal cost be?

Table 2.3 -The firm depicted in Table 2.3 is facing diminishing returns because:

Figure 2.1 -On the production possibilities curve in Figure 2.1 the gain from decreasing manufacturing production from 700 tons to 500 tons is:

Figure 2.1 -Referring to Figure 2.1,if you increase the production of farm goods,what other area is affected?

Figure 2.2 -Figure 2.2 presents a production possibilities curve for a country that can either produce highways or provide people with medical care in a given year.The figure shows that the production possibilities curve is:

Figure 2.3 -In Figure 2.3,point A:

A "market" is an arrangement that enables people to exchange goods and services.

What is the nominal value of money?

The notion of opportunity cost allows the measurement of tradeoffs.

What is the opportunity cost of your college degree?

Suppose prices increase by 3% per year.What nominal percentage return on your savings account would you require to get a 3% real return?

Increase the level of an activity if its marginal benefit exceeds its marginal cost;reduce the level of an activity if its marginal cost exceeds its marginal benefit.This is known as the ________.

The opportunity cost of going to college:

By making acquisitions,resources are used that could have been used to ________.

Introduction: What Is Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 2: The Key Principles of Economics

You have an hour between your economics and math classes.What is the opportunity cost of that time if you use it to do math homework?

In order to go to college,James incurs an opportunity cost even though all he gave up was a full time job as a clerk at Wally World.

Opportunity cost is the difference between the benefit and cost of some action.

When does voluntary exchange take place?

The government uses the buying power of wages rather than face value or nominal value in reporting changes in "real wages" in the economy.

Figure 2.4 -Joe runs a business and needs to decide how many hours to stay open.Figure 2.4 illustrates his marginal benefit of staying open for each additional hour.Suppose that we observe Joe staying open 4 hours per day.If he is following the marginal principle,what must his marginal cost be?

Table 2.3 -The firm depicted in Table 2.3 is facing diminishing returns because:

Figure 2.1 -On the production possibilities curve in Figure 2.1 the gain from decreasing manufacturing production from 700 tons to 500 tons is:

Figure 2.1 -Referring to Figure 2.1,if you increase the production of farm goods,what other area is affected?

Figure 2.2 -Figure 2.2 presents a production possibilities curve for a country that can either produce highways or provide people with medical care in a given year.The figure shows that the production possibilities curve is:

Figure 2.3 -In Figure 2.3,point A:

A "market" is an arrangement that enables people to exchange goods and services.

What is the nominal value of money?

The notion of opportunity cost allows the measurement of tradeoffs.

What is the opportunity cost of your college degree?

Suppose prices increase by 3% per year.What nominal percentage return on your savings account would you require to get a 3% real return?

Increase the level of an activity if its marginal benefit exceeds its marginal cost;reduce the level of an activity if its marginal cost exceeds its marginal benefit.This is known as the ________.

The opportunity cost of going to college:

By making acquisitions,resources are used that could have been used to ________.

Introduction: What Is Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters