Question 1

People are interested in how much their money can buy.This is called the ________.

Accepted Answer

real-nomin

Question 2

The opportunity cost of something is what you sacrifice to get it.

Accepted Answer

A) True 
 B)False

Question 3

Firms that make their customers better off get more repeat business and make earn more profits.

Accepted Answer

A) True 
 B)False

Question 4

Table 2.2
-Julianne runs a business and needs to decide how many hours to stay open.Table 2.2 illustrates her marginal costs of staying open for each additional hour.Suppose that Julianne's marginal benefit of staying open per hour is $20.If she is following the marginal principle,how many hours should Julianne stay open?

Accepted Answer

A) 4 hours 
B) 5 hours 
C) 6 hours 
D) 7 hours 
A) 4 hours 
B) 5 hours 
C) 6 hours 
D) 7 hours

Question 5

From the Application,the opportunity cost of your invested capital is:

Accepted Answer

A) the interest you could get if you invested in in a bond. 
B) zero. 
C) the revenue you could get once the capital is used. 
D) the sum of the value of all your equipment. 
A) the interest you could get if you invested in in a bond. 
B) zero. 
C) the revenue you could get once the capital is used. 
D) the sum of the value of all your equipment.

Question 6

Table 2.1
-A group of people has formed a house cleaning and yard maintenance business.The number of houses or yards that they can clean or maintain in any given day is depicted in Table 2.1.As the group cleans more houses,the opportunity cost of doing yard work:

Accepted Answer

A) falls. 
B) rises. 
C) stays the same. 
D) becomes equal to the opportunity cost of cleaning houses. 
A) falls. 
B) rises. 
C) stays the same. 
D) becomes equal to the opportunity cost of cleaning houses.

Question 7

What matters to people is the face value of money or income.

Accepted Answer

A) True 
 B)False

Question 8

The principle that states that the cost of something is equal to what is sacrificed to get it is known as the:

Accepted Answer

A) marginal principle. 
B) principle of opportunity cost. 
C) principle of diminishing returns. 
D) reality principle. 
A) marginal principle. 
B) principle of opportunity cost. 
C) principle of diminishing returns. 
D) reality principle.

Question 9

Mark quit his job as a salesman where he made $43,000 per year to start his own t-shirt making business.His business expenses are $6,000 per year on rent,$12,000 per year on supplies,and $4,000 per year on part-time help.As for his personal expenses,his apartment costs him $4,800 per year and his personal bills are an extra $1,200 per year.What is Mark's opportunity cost of running the business?

Accepted Answer

A) $65,000 
B) $57,000 
C) $71,000 
D) $43,000 
A) $65,000 
B) $57,000 
C) $71,000 
D) $43,000

Question 10

Based on the Application,the marginal benefit of sailing a ship faster is:

Accepted Answer

A) more cargo delivered per year. 
B) more fuel cost incurred. 
C) less fuel costs incurred. 
D) less cargo delivered per year. 
A) more cargo delivered per year. 
B) more fuel cost incurred. 
C) less fuel costs incurred. 
D) less cargo delivered per year.

Question 11

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 3 hours per day.If he is following the marginal principle,what must his marginal cost be?

Accepted Answer

A) $24 
B) $32 
C) $40 
D) $48 
A) $24 
B) $32 
C) $40 
D) $48

Question 12

Based on the Application,a ship captain will decide to sail a ship slower if:

Accepted Answer

A) the marginal benefit of a faster sail is less than the marginal cost. 
B) the marginal benefit of a faster sail is more than the marginal cost. 
C) the marginal benefit of a faster sail is equal than the marginal cost. 
D) the marginal benefit of a faster sail is positive. 
A) the marginal benefit of a faster sail is less than the marginal cost. 
B) the marginal benefit of a faster sail is more than the marginal cost. 
C) the marginal benefit of a faster sail is equal than the marginal cost. 
D) the marginal benefit of a faster sail is positive.

Question 13

Table 2.2
-Julianne runs a business and needs to decide how many hours to stay open.Table 2.2 illustrates her marginal costs of staying open for each additional hour.Suppose that Julianne's marginal benefit of staying open per hour is $3.If she is following the marginal principle,how many hours should Julianne stay open?

Accepted Answer

A) 1 hour 
B) 3 hours 
C) 6 hours 
D) none of the above 
A) 1 hour 
B) 3 hours 
C) 6 hours 
D) none of the above

Question 14

If the government estimates that the marginal cost of building a bridge is $100 million,while the marginal benefit is $150 million,the marginal principle dictates that the government should:

Accepted Answer

A) build the bridge. 
B) never build the bridge. 
C) wait until the marginal cost of building the bridge rises to above $150 million before building the bridge. 
D) wait until the marginal benefit of building the bridge drops to below $100 million before building the bridge. 
A) build the bridge. 
B) never build the bridge. 
C) wait until the marginal cost of building the bridge rises to above $150 million before building the bridge. 
D) wait until the marginal benefit of building the bridge drops to below $100 million before building the bridge.

Question 15

You are running a small yard maintenance business for the summer.What do you expect to happen to the number of yards you can maintain in a day as you add workers if you don't purchase more capital equipment (like mowers and leaf blowers)?

Accepted Answer

It is likely that as you add workers,you

Question 16

Recall Application 1,"Don't Forget the Costs of Time and Invested Funds," to answer the following questions.
-According to the Application,if the interest rate rises,then the opportunity costs of running a business:

Accepted Answer

A) rises. 
B) falls. 
C) is unchanged. 
D) cannot be determined with the information given. 
A) rises. 
B) falls. 
C) is unchanged. 
D) cannot be determined with the information given.

Question 17

From 1974 to 2011,as the nominal minimum wage rose from $2 to $5.85,the real minimum wage fell.

Accepted Answer

A) True 
 B)False

Question 18

According to the application,if you are a debtor who owes student loans,you are helped in paying back your student loans by:

Accepted Answer

A) unexpected deflation. 
B) unexpected inflation. 
C) expected inflation. 
D) expectedly deflation. 
A) unexpected deflation. 
B) unexpected inflation. 
C) expected inflation. 
D) expectedly deflation.

Question 19

The opportunity cost of something is:

Accepted Answer

A) the cost of the labor used to produce it. 
B) what you sacrifice to get it. 
C) the price charged for it. 
D) the search cost required to find it. 
A) the cost of the labor used to produce it. 
B) what you sacrifice to get it. 
C) the price charged for it. 
D) the search cost required to find it.

Question 20

The extra benefit resulting from a small increase in an activity is called the:

Accepted Answer

A) opportunity cost. 
B) marginal benefit. 
C) marginal cost. 
D) diminishing returns of the activity. 
A) opportunity cost. 
B) marginal benefit. 
C) marginal cost. 
D) diminishing returns of the activity.

People are interested in how much their money can buy.This is called the ________.

The opportunity cost of something is what you sacrifice to get it.

Firms that make their customers better off get more repeat business and make earn more profits.

From the Application,the opportunity cost of your invested capital is:

Table 2.1 -A group of people has formed a house cleaning and yard maintenance business.The number of houses or yards that they can clean or maintain in any given day is depicted in Table 2.1.As the group cleans more houses,the opportunity cost of doing yard work:

What matters to people is the face value of money or income.

The principle that states that the cost of something is equal to what is sacrificed to get it is known as the:

Based on the Application,the marginal benefit of sailing a ship faster is:

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 3 hours per day.If he is following the marginal principle,what must his marginal cost be?

Based on the Application,a ship captain will decide to sail a ship slower if:

If the government estimates that the marginal cost of building a bridge is $100 million,while the marginal benefit is $150 million,the marginal principle dictates that the government should:

You are running a small yard maintenance business for the summer.What do you expect to happen to the number of yards you can maintain in a day as you add workers if you don't purchase more capital equipment (like mowers and leaf blowers)?

Recall Application 1,"Don't Forget the Costs of Time and Invested Funds," to answer the following questions. -According to the Application,if the interest rate rises,then the opportunity costs of running a business:

From 1974 to 2011,as the nominal minimum wage rose from $2 to $5.85,the real minimum wage fell.

According to the application,if you are a debtor who owes student loans,you are helped in paying back your student loans by:

The opportunity cost of something is:

The extra benefit resulting from a small increase in an activity is called the:

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

People are interested in how much their money can buy.This is called the ________.

The opportunity cost of something is what you sacrifice to get it.

Firms that make their customers better off get more repeat business and make earn more profits.

From the Application,the opportunity cost of your invested capital is:

Table 2.1 -A group of people has formed a house cleaning and yard maintenance business.The number of houses or yards that they can clean or maintain in any given day is depicted in Table 2.1.As the group cleans more houses,the opportunity cost of doing yard work:

What matters to people is the face value of money or income.

The principle that states that the cost of something is equal to what is sacrificed to get it is known as the:

Based on the Application,the marginal benefit of sailing a ship faster is:

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 3 hours per day.If he is following the marginal principle,what must his marginal cost be?

Based on the Application,a ship captain will decide to sail a ship slower if:

If the government estimates that the marginal cost of building a bridge is $100 million,while the marginal benefit is $150 million,the marginal principle dictates that the government should:

You are running a small yard maintenance business for the summer.What do you expect to happen to the number of yards you can maintain in a day as you add workers if you don't purchase more capital equipment (like mowers and leaf blowers)?

Recall Application 1,"Don't Forget the Costs of Time and Invested Funds," to answer the following questions. -According to the Application,if the interest rate rises,then the opportunity costs of running a business:

From 1974 to 2011,as the nominal minimum wage rose from $2 to $5.85,the real minimum wage fell.

According to the application,if you are a debtor who owes student loans,you are helped in paying back your student loans by:

The opportunity cost of something is:

The extra benefit resulting from a small increase in an activity is called the:

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