Question 1

-Refer to Table 2.4. The marginal product of the 3rd tank of fertilizer is:

Accepted Answer

A)  29.33 truckloads of fruit. 
B)  1.67 truckloads of fruit. 
C)  5 truckloads of fruit. 
D)  20 truckloads of fruit. 
A)  29.33 truckloads of fruit. 
B)  1.67 truckloads of fruit. 
C)  5 truckloads of fruit. 
D)  20 truckloads of fruit.

Question 2

The opportunity cost of going to college:

Accepted Answer

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

Question 3

What is the opportunity cost of investing $10,000 of your own money in a business you wish to start?

Accepted Answer

The opportunity cost of your $

Question 4

According to the marginal principle, a rational individual should undertake an economic activity as long as the:

Accepted Answer

A)  marginal benefit equals marginal cost. 
B)  total benefit equals total cost. 
C)  marginal benefit exceeds marginal cost. 
D)  marginal benefit is less than marginal cost. 
A)  marginal benefit equals marginal cost. 
B)  total benefit equals total cost. 
C)  marginal benefit exceeds marginal cost. 
D)  marginal benefit is less than marginal cost.

Question 5

Recall Application 5, "The Declining Real Minimum Wage," to answer the following questions:
-According to the application, if the weekly income from 1974 to 2007 increased from $80 to $234, but the number of standard baskets of goods that the weekly income decreased from 1.70 to 1.16 in 2007, then we can conclude that:

Accepted Answer

A)  prices decreased faster than the wage increase between 1974 and 2007. 
B)  prices increased faster than the wage increase between 1974 and 2007. 
C)  prices decreased slower than the wage increase between 1974 and 2007. 
D)  prices increased slower than the wage increase between 1974 and 2007. 
A)  prices decreased faster than the wage increase between 1974 and 2007. 
B)  prices increased faster than the wage increase between 1974 and 2007. 
C)  prices decreased slower than the wage increase between 1974 and 2007. 
D)  prices increased slower than the wage increase between 1974 and 2007.

Question 6

If the price level falls faster than the wage rate, then the real wage decreases.

Accepted Answer

A) True 
 B)False

Question 7

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

Question 8

The marginal output of labor is the amount of output that can be produced if one more unit of labor is added.

Accepted Answer

A) True 
 B)False

Question 9

Economists argue that individuals should continue to consume until total benefit equals total cost.

Accepted Answer

A) True 
 B)False

Question 10

Figure 2.1
-The production possibilities curve in Figure 2.1 illustrates the notion of:

Accepted Answer

A)  increased farm produce production. 
B)  opportunity cost. 
C)  increased factory goods production. 
D)  diminishing resources. 
A)  increased farm produce production. 
B)  opportunity cost. 
C)  increased factory goods production. 
D)  diminishing resources.

Question 11

Figure 2.1
-On the production possibilities curve in Figure 2.1 as agricultural production increases by 200 tons per year from 200 tons to 400 tons and then to 600 tons, the opportunity cost in terms of tons of manufacturing goods:

Accepted Answer

A)  rises. 
B)  becomes negative. 
C)  falls. 
D)  is constant. 
A)  rises. 
B)  becomes negative. 
C)  falls. 
D)  is constant.

Question 12

The opportunity cost of something is:

Accepted Answer

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

Question 13

Suppose that your tuition to attend college is $10,000 per year and you spend $4,000 per year on room and board. If you were working full time instead of attending college, you could earn $20,000 per year. What is your opportunity cost of attending college for one year?

Accepted Answer

A)  $30,000 
B)  $34,000 
C)  $24,000 
D)  $14,000 
A)  $30,000 
B)  $34,000 
C)  $24,000 
D)  $14,000

Question 14

Nancy and Melissa both have broken light fixtures in their living rooms. Nancy opts to hire an electrician, while Melissa spends two hours replacing the fixture herself. Which of the following is a possible explanation of this behavior?

Accepted Answer

A)  The opportunity cost of Nancy's time is higher than her cost to hire an electrician. 
B)  Nancy dislikes electrical work more than Melissa. 
C)  Melissa is better at doing electrical work than Nancy. 
D)  All of the above are possible explanations of this behavior. 
A)  The opportunity cost of Nancy's time is higher than her cost to hire an electrician. 
B)  Nancy dislikes electrical work more than Melissa. 
C)  Melissa is better at doing electrical work than Nancy. 
D)  All of the above are possible explanations of this behavior.

Question 15

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

-Refer to Table 2.4. The marginal product of the 3rd tank of fertilizer is:

The opportunity cost of going to college:

What is the opportunity cost of investing $10,000 of your own money in a business you wish to start?

According to the marginal principle, a rational individual should undertake an economic activity as long as the:

If the price level falls faster than the wage rate, then the real wage decreases.

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

The marginal output of labor is the amount of output that can be produced if one more unit of labor is added.

Economists argue that individuals should continue to consume until total benefit equals total cost.

Figure 2.1 -The production possibilities curve in Figure 2.1 illustrates the notion of:

Figure 2.1 -On the production possibilities curve in Figure 2.1 as agricultural production increases by 200 tons per year from 200 tons to 400 tons and then to 600 tons, the opportunity cost in terms of tons of manufacturing goods:

The opportunity cost of something is:

Suppose that your tuition to attend college is $10,000 per year and you spend $4,000 per year on room and board. If you were working full time instead of attending college, you could earn $20,000 per year. What is your opportunity cost of attending college for one year?

Nancy and Melissa both have broken light fixtures in their living rooms. Nancy opts to hire an electrician, while Melissa spends two hours replacing the fixture herself. Which of the following is a possible explanation of this behavior?

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

Introduction: What Is Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Measuring a Nations Production and Income

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

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Exam 2: The Key Principles of Economics

-Refer to Table 2.4. The marginal product of the 3rd tank of fertilizer is:

The opportunity cost of going to college:

What is the opportunity cost of investing $10,000 of your own money in a business you wish to start?

According to the marginal principle, a rational individual should undertake an economic activity as long as the:

If the price level falls faster than the wage rate, then the real wage decreases.

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

The marginal output of labor is the amount of output that can be produced if one more unit of labor is added.

Economists argue that individuals should continue to consume until total benefit equals total cost.

Figure 2.1 -The production possibilities curve in Figure 2.1 illustrates the notion of:

Figure 2.1 -On the production possibilities curve in Figure 2.1 as agricultural production increases by 200 tons per year from 200 tons to 400 tons and then to 600 tons, the opportunity cost in terms of tons of manufacturing goods:

The opportunity cost of something is:

Suppose that your tuition to attend college is $10,000 per year and you spend $4,000 per year on room and board. If you were working full time instead of attending college, you could earn $20,000 per year. What is your opportunity cost of attending college for one year?

Nancy and Melissa both have broken light fixtures in their living rooms. Nancy opts to hire an electrician, while Melissa spends two hours replacing the fixture herself. Which of the following is a possible explanation of this behavior?

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

Introduction: What Is Economics

Exchange and Markets

Demand, Supply, and Market Equilibrium

Measuring a Nations Production and Income

Unemployment and Inflation

The Economy at Full Employment

Why Do Economies Grow

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Income-Expenditure Model

Investment and Financial Markets

Money and the Banking System

The Federal Reserve and Monetary Policy

Modern Macroeconomics: From the Short Run to the Long Run

The Dynamics of Inflation and Unemployment

Macroeconomic Policy Debates

International Trade and Public Policy

The World of International Finance

Filters