Exam 1: Ten Principles of Economics: How People Make Decisions

You go to the movieplex where movies ordinarily cost $9.You are intending to see a movie for which you have a $3 off coupon good for only that movie at that time.However,when you get there you see a friend who asks if you would rather see a new release.Both movies start and end at the same time.If you decide to see the new release with your friend,what is your opportunity cost?

Suppose the cost of flying a 200-seat plane for an airline is $100,000 and there are 10 empty seats on a flight.The airline should sell a ticket to a standby passenger only if the passenger is willing to pay

It costs a meat-processing company $50,000 to produce 5,000 pounds of steak.The company's cost will be $50,009 if it produces an additional pound of steak.If the company produces 5,001 pounds of steak then

Suppose the cost of flying a 100-seat plane for an airline is $50,000 and there are 10 empty seats on a flight.The average cost per seat is

Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight.If the marginal cost of operating one room for one night is $40,the hotel manager should rent one of the empty rooms only if a customer is willing to pay

Melody decides to spend three hours working overtime rather than going to the park with her friends.She earns $20 per hour for overtime work.Her opportunity cost of working is

The phrase "no such thing as a free lunch" means

Which of the following statements exemplifies a principle of individual decisionmaking?

A tradeoff exists between a clean environment and a higher level of income in that

DeShawn has spent $600 purchasing and repairing an old fishing boat,which he expects to sell for $900 once the repairs are complete.DeShawn discovers that,in addition to the $600 he has already spent,he needs to make an additional repair,which will cost another $400,in order to make the boat worth $900 to potential buyers.He can sell the boat as it is now for $400.What should he do?

Which of the following statements best represents the principle represented by the adage,"There is no such thing as a free lunch"?

The principle that "people face tradeoffs" applies to

When the government redistributes income from the wealthy to the poor,

A tax on gasoline encourages people to drive smaller,more fuel-efficient cars.Which principle of economics does this illustrate?

Ashley eats two bananas during a particular day.The marginal benefit she enjoys from eating the second banana

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

For most students,the largest single cost of a college education is

In the context of decisionmaking,the word "marginal" is most closely associated with the word

As a result of a successful attempt by government to cut the economic pie into more equal slices,

For most students,the earnings they give up to attend college are