Exam 1: The Economic Approach

Liam wants to buy some milk and a box of cereal. If Liam buys 4 gallons of milk at $3.00 per gallon, the box of cereal costs $2.00. If he buys 5 gallons of milk, the box of cereal is free. For Liam, the marginal cost of buying a fifth gallon of milk is

The basic difference between macroeconomics and microeconomics is that

The opportunity cost of an action is

"The resources now going into the War on Terrorism and into improved airport security would save more lives if they were invested in medical research." This statement most clearly reflects which of the following?

For a college student who wishes to calculate the true costs of going to college, the costs of room and board

Who is more likely to drive carelessly, Camila in her 1980 Ford with bad brakes or Samantha, who has a 2005 BMW with all the most recent safety options?

Economic analysis assumes that

Which of the following is part of the economic way of thinking?

Which of the following is part of the economic way of thinking?

Economic theory

Which of the following is true?

Which of the following is not consistent with the basic postulate of economics that incentives matter?

The economic way of thinking stresses that

Which of the following is a normative economic statement?

The economic way of thinking stresses that

The value of a good

Economics is primarily the study of

Which of the following is a positive economic statement?

Jacob and Mason go to a diner that sells burritos for $5 and tacos for $3. They agree to split the lunch bill evenly. Mason chooses a taco. The marginal cost to Jacob of ordering a burrito instead of a taco is

The expression "There's no such thing as a free lunch" means