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Microeconomics, 3rd Edition Test Bank

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    Tests, Surveys, and Pools Tests Test Canvas : Self-Test Quiz - Chapter 01 Microeconom ics, 3e Test Canvas: Self-Test Quiz - Chapter 01 The Test Canvas allows you to add and edit questions, add Question Sets or Random Blocks, reorder questions, and review the test. More Help Delete Points Update Hide Question Details Select: All None Select by Type: - Question Type - Description Instructions Total Questions 20 Total Points 20 1. Multiple Choice: Economists would most likely disagree... Question Economists would most likely disagree with which of the following statements? Answer Correct Feedback Correct! There are finite amounts available of Inputs used in production such as labor and natural resources Section: Individual Choice: The Core of Economics Incorrect Feedback Incorrect! Economists generally agree about the power of incentives, the prevalence of opportunity costs, and the tendency of markets to seek equilibrium. Section: Individual Choice: The Core of Economics People respond to incentives. Making a choice involves an opportunity cost. Markets move towards equilibrium. Resources and inputs used in production are unlimited. 2. Multiple Choice: Macroeconomics is the branch of econo... Question Macroeconomics is the branch of economics studying: Answer how prices are determined. why trade-offs exist. Edit Mode is: ON Question Settings Create Question Reuse Question Upload Questions Points: 1 Points: 1

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    Correct Feedback Macroeconomists seek to understand the patterns of recession and recovery, as well as the underlying causes of economic growth. Section: Economy-Wide Interactions Incorrect Feedback The ups and downs in economic activity are the focal point of macroeconomic theory. Section: Economy-Wide Interactions how decisions are made at the margin. fluctuations in the overall level of business activity. 3. Multiple Choice: Economists generally agree that peopl... Question Economists generally agree that people are most likely to change their behavior when they: Answer Correct Feedback Correct! Economists assume that people will systematically act in ways to make themselves better off. Section: Individual Choice: The Core of Economics Incorrect Feedback Incorrect! Although scarcity is ever-present, individuals have an incentive to make the best decisions possible in the face of scarcity. Section: Individual Choice: The Core of Economics are asked to do so voluntarily. are given incentives to do so. live in a world without scarcity. live in a world without opportunity costs. 4. Multiple Choice: Economists would most likely agree wi... Question Economists would most likely agree with which one of the following statements? Answer Correct Feedback Correct! The assumption that individuals seek to promote their own best interest is a cornerstone of economic theory. Section: Individual Choice: The Core of Economics Incorrect Feedback Incorrect! Economists assert that everyone can gain from trade, and that this is one of the efficiencies resulting from a market economy. However, even an efficient trade entails an opportunity cost for both parties. Section: Individual Choice: The Core of Economics When transactions occur voluntarily, the seller gains and the buyer loses. Market economies generate economic growth, but they do not promote efficiency. People usually exploit opportunities to make themselves better off. If people make wise decisions, they can avoid incurring any opportunity cost. Points: 1 Points: 1

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    5. Multiple Choice: Most individuals choose careers in wh... Question Most individuals choose careers in which they specialize in producing only one type of good or service, yet as consumers they have access to a wide variety of goods and services. What principle allows for this? Answer Correct Feedback Correct! The efficiency of market economies derives from the fact that the great arena of trade allows for fine degrees of specialization. Section: Interaction: How Economies Work Incorrect Feedback Incorrect! Each individual will use the mechanism of the market to trade the fruits of his productive efforts for the items she seeks to consume. Section: Interaction: How Economies Work trade equity scarcity opportunity cost 6. Multiple Choice: In his book The Wealth of Nations, Ad... Question In his book The Wealth of Nations , Adam Smith used the example of pin-making to illustrate the advantages of: Answer Correct Feedback Correct! Smith described the advantages of an assembly-line production method over the practice of one craftsman making each individual item from start to finish. Section: Interaction: How Economies Work Incorrect Feedback Incorrect! Smith described a pin factory in which each worker specialized in one step of the process. Section: Interaction: How Economies Work equity. specialization. marginal analysis. interaction of choices. 7. Multiple Choice: An opportunity cost arises: Question An opportunity cost arises: Answer only when a monetary cost is incurred. only when a time cost is incurred. only when the wrong decision is made. Points: 1 Points: 1 Points: 1

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    Correct Feedback Correct! The opportunity cost is the value of the best alternative forgone. Section: Individual Choice: The Core of Economics Incorrect Feedback Incorrect! The opportunity cost is the value of something not chosen. Section: Individual Choice: The Core of Economics whenever any choice is made. 8. Multiple Choice: Exchanges taking place in a market sy... Question Exchanges taking place in a market system: Answer Correct Feedback Correct! Each individual determines whether the exchange will better her own self- interest prior to agreeing to the trade. Section: Interaction: How Economies Work Incorrect Feedback Incorrect! Market exchanges occur when both parties expect to benefit. Section: Interaction: How Economies Work are voluntary. are inefficient. will benefit one party at the expense of another. are monitored by the government to ensure that scarce resources are being used wisely. 9. Multiple Choice: The condition of scarcity means that: Question The condition of scarcity means that: Answer Correct Feedback Correct! Scarcity arises from the fact that the productive resources are not infinitely available Section: Individual Choice: The Core of Economics Incorrect Feedback Incorrect! Scarcity arises from the fact that the productive resources are not infinitely available. Section: Individual Choice: The Core of Economics when the government produces something, there is no opportunity cost. choices must be made in the allocation of productive resources. you will not incur an opportunity cost if you make the right choice. only a command economy can make efficient use of resources. 10. Multiple Choice: The purpose of an economic system is to: Question The purpose of an economic system is to: Answer eliminate scarcity. Points: 1 Points: 1 Points: 1

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    Correct Feedback Correct! Not all economic systems use the same criteria for making these decisions, but they all allocate goods and resources Section: Interaction: How Economies Work Incorrect Feedback Incorrect! Allocation decisions are made by a central authority In a command economy. In a market economy, they are made by the collective effect of individual decisions. Section: Interaction: How Economies Work protect the environment. allocate scarce resources. create an equal distribution of wealth. 11. Multiple Choice: The focal point of economic inquiry is: Question The focal point of economic inquiry is: Answer Correct Feedback Correct! In particular, economists look at how decisions are made at the margin by individual households and firms Section: Individual Choice: The Core of Economics Incorrect Feedback Incorrect! Economists evaluate the way that individuals use the perceived costs and benefits of various choices they might make. Section: Individual Choice: The Core of Economics the stock market. the value of the dollar. individual choice. business ethics. 12. Multiple Choice: An economic system is in __________ w... Question An economic system is in __________ when no individual would be better off by making a different choice. Answer Correct Feedback Correct! A point of equilibrium is where, ceteris paribus, no one has an incentive to make a different decision Section: Interaction: How Economies Work Incorrect Feedback Incorrect! If individuals are in the process of changing their decisions and their behavior, then the economy will still be moving to a point of equilibrium. Section: Interaction: How Economies Work chaos decline jeopardy equilibrium Points: 1 Points: 1

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    13. Multiple Choice: An economy is __________ if it has ex... Question An economy is __________ if it has exploited all opportunities to benefit someone without making anyone else worse off. Answer Correct Feedback Correct! At a point of efficiency, scarce resources of an economy have been used where they are most highly valued. Section: Interaction: How Economies Work Incorrect Feedback Incorrect! An efficient outcome is one in which any reallocation of resources would result in a higher opportunity cost. Section: Interaction: How Economies Work efficient equitable wealthy failing 14. Multiple Choice: Economic theory asserts that people w... Question Economic theory asserts that people will behave in ways that: Answer Correct Feedback Correct! Economists assume that people make choices based on what they expect will serve their own best interests. Section: Individual Choice: The Core of Economics Incorrect Feedback Incorrect! Economists predict behavior based on the idea that each individual will pursue opportunities to improve her own wellbeing. Section: Individual Choice: The Core of Economics will be unfair to others. will enhance their own overall well-being. will not take advantage of opportunities for self-improvement. do not follow generally predictable patterns. 15. Multiple Choice: An equilibrium outcome is one in which: Question An equilibrium outcome is one in which: Answer no one has as incentive to change his or her decisions or behavior. there is no scarcity. there is no opportunity cost. the distribution of wealth is fair. Points: 1 Points: 1 Points: 1

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    Correct Feedback Correct! An equilibrium is where, ceteris paribus, no one has an incentive to make a different decision. Section: Interaction: How Economies Work Incorrect Feedback Incorrect! Even though individuals may be content with their choices in an equilibrium outcome, they still incur an opportunity cost in terms of the forgone alternative. Section: Interaction: How Economies Work 16. Multiple Choice: Which one of the following statements... Question Which one of the following statements is not true of a market economy? Answer Correct Feedback Correct! Market economies are characterized by scarcity and opportunity cost, and the individuals who operate within them respond to incentives. Individual choices determine the appropriate level of production and consumption. Section: Individual Choice: The Core of Economics Incorrect Feedback Incorrect! Market economies are characterized by scarcity and opportunity cost and the individuals who operate within them respond to incentives. In a market economy, choices made by individuals and firms determine the appropriate level of production and consumption. Section: Individual Choice: The Core of Economics Productive resources are scarce. Every choice involves an opportunity cost. A central planning authority makes decisions about production and consumption. People will respond to incentives. 17. Multiple Choice: Market failure results when the: Question Market failure results when the: Answer Correct Feedback Correct! Government intervention may be used to solve problems arising from market failure. Section: Interaction: How Economies Work Incorrect Feedback Incorrect! Traffic congestion is an example of market failure. Pollution created by a chemical factory is an example of market failure. (This example explains the 'pursuit of self interest leads to bad results' a little better.) Section: Interaction: How Economies Work pursuit of individual self-interest leads to bad results for society as a whole. market fails to create an equal distribution of wealth. market fails to create an equal distribution of income. market fails to eliminate scarcity. 18. Multiple Choice: Adam Smith used the idea of the invis... Question Points: 1 Points: 1 Points: 1

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    Adam Smith used the idea of the invisible hand to refer to the ability of market economies to: Answer Correct Feedback Correct! The effect of the invisible hand is seen in the success of market economies. Section: Interaction: How Economies Work Incorrect Feedback Incorrect! In The Wealth of Nations , Smith talked about how producers supply us with the goods we want to consume because they are acting in their own best interest. In other words, they will not earn a profit unless they are providing goods that consumers want to buy. Section: Interaction: How Economies Work recover from recessions. solve the problem of market failure. harness the power of individual self-interest for the good of society as a whole. convince people that society is better off if its members sacrifice their own self- interest for the cause of the greater good. 19. Multiple Choice: After finishing high school, LeBron J... Question After finishing high school, LeBron James decided to enter the NBA rather that going to college to begin his studies to become a doctor. This choice between the two careers can best be described by: Answer Correct Feedback The value of the next best alternative when a choice is made is its opportunity cost. Section: Individual Choice: The Core of Economics Incorrect Feedback Incorrect! When an individual chooses one outcome and decides to forgo the another, what that person gives up is opportunity cost of that choice. Section: Individual Choice: The Core of Economics equilibrium. scarcity. market failure. opportunity cost. 20. Multiple Choice: If market failures exist, the market ... Question If market failures exist, the market can become efficient when: Answer the government intervenes to improve society's welfare. people just ignore the problem. the government eliminates all market transactions. Points: 1 Points: 1

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    Delete Points Update Hide Question Details Select: All None Select by Type: - Question Type - Correct Feedback Correct! Wise use of government policy can help markets operate more efficiently and improve the welfare of the people. Section: Interaction: How Economies Work Incorrect Feedback Incorrect! In the presence of market failure, assuming the good or service is desirable, governments can intervene to improve the outcome. Section: Interaction: How Economies Work all citizens immigrate to a country where the market failure does not exist. OK

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    Tests, Surveys, and Pools Tests Test Canvas : TestBanks Chapter 01: First Principles Microeconom ics, 3e Test Canvas: TestBanks Chapter 01: First Principles The Test Canvas allows you to add and edit questions, add Question Sets or Random Blocks, reorder questions, and review the test. More Help Delete Points Update Hide Question Details Select: All None Select by Type: - Question Type - Description Instructions Total Questions 223 Total Points 0 1. True/False: Because the United States is a rich n... Question Because the United States is a rich nation, free health care can be provided for all citizens without considering the issue of scarcity. Answer True False 2. True/False: The study of economics arises because... Question The study of economics arises because of the necessity for choice, and the necessity for choice arises because of the fundamental problem of scarcity of resources. Answer True False 3. True/False: Opportunity cost means that in the re... Question Opportunity cost means that in the rebuilding of Iraq, if the United States spends $87 billion, we have to forgo the opportunity to spend $87 billion on some other program. Answer True False Edit Mode is: ON Question Settings Create Question Reuse Question Upload Questions Points: 0 Points: 0 Points: 0 Success: 223 questions added as a copy.

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    4. True/False: In 2003, Congress passed a tax cut. S... Question In 2003, Congress passed a tax cut. Since taxes were reduced, the country did not incur any opportunity cost from this decision. Answer True False 5. True/False: A trade-off involves weighing the cos... Question A trade-off involves weighing the costs and the benefits. Answer True False 6. True/False: Using marginal analysis to decide whe... Question Using marginal analysis to decide whether to consume an additional slice of pizza requires making a comparison of the benefits and costs associated with the consumption of an additional slice of pizza. Answer True False 7. True/False: Economists make predictions about ind... Question Economists make predictions about individual behavior based on the assumption that people exploit opportunities to make themselves better off. The fact that different individuals make different choices when confronted with the same situation implies that this assumption is often violated. Answer True False 8. True/False: The principle that people will exploi... Question The principle that people will exploit opportunities to do what is best for others is the basis of all predictions by economists about individual behavior. Answer True False 9. True/False: When people in Brazil engage in trade... Question When people in Brazil engage in trade with people in Germany, the citizens of each nation are made worse off. Answer True False 10. True/False: As long as individuals know that they... Question Points: 0 Points: 0 Points: 0 Points: 0 Points: 0 Points: 0 Points: 0

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    As long as individuals know that they can find the goods and services that they want in the market, they are willing to forgo being self-sufficient and are willing to specialize. Answer True False 11. True/False: Trade allows people to get more of wh... Question Trade allows people to get more of what they want. Answer True False 12. True/False: In equilibrium there will be no furth... Question In equilibrium there will be no further opportunities for gains from trade. Answer True False 13. True/False: An economic situation is in equilibri... Question An economic situation is in equilibrium when no individual would be better off taking a different action. Answer True False 14. True/False: Market equilibrium will always be eff... Question Market equilibrium will always be efficient even if it is not equitable. Answer True False 15. True/False: An economy is efficient if one person... Question An economy is efficient if one person can be made better off by reallocating resources without making anyone else worse off. Answer True False 16. True/False: Equity is the same as efficiency. Question Equity is the same as efficiency. Answer True False 17. True/False: If an economy's resources are used ef... Question Points: 0 Points: 0 Points: 0 Points: 0 Points: 0 Points: 0 Points: 0

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    If an economy's resources are used efficiently, then it is guaranteed that the economy will also achieve equity. Answer True False 18. True/False: Handicapped-designated parking spaces... Question Handicapped-designated parking spaces are an example of the market economy achieving efficiency. Answer True False 19. True/False: The fact that individuals in a market... Question The fact that individuals in a market economy act so as to make themselves better off is a major reason why a market equilibrium is usually efficient. Answer True False 20. True/False: According to the textbook, markets us... Question According to the textbook, markets usually lead to efficiency. Answer True False 21. True/False: Market failure occurs when the pursui... Question Market failure occurs when the pursuit of self-interest leads to bad results. Answer True False 22. Multiple Choice: Microeconomics deals with: Question Microeconomics deals with: Answer the working of the entire economy or large sectors of it. economic growth. individual decision makers in the economy. gross domestic product. 23. Multiple Choice: The study of a single firm and how it... Question The study of a single firm and how it determines prices would fall under the study of: Points: 0 Points: 0 Points: 0 Points: 0 Points: 0 Points: 0

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    Answer macroeconomics. microeconomics. economic growth. fiscal policy. 24. Multiple Choice: Macroeconomics deals with: Question Macroeconomics deals with: Answer bits and pieces of the economy. the question of how a business unit should operate profitably. the working of the entire economy or large sectors of it. how individuals make decisions. 25. Multiple Choice: The primary emphasis in macroeconomic... Question The primary emphasis in macroeconomics is on: Answer how firms set prices. the national economy. marginal analysis. bits and pieces of the economy. 26. Multiple Choice: Which of the following would be studi... Question Which of the following would be studied in macroeconomics? Answer the change in automobile sales due to a change in the price of automobiles the impact of a tax reduction on the profits of an individual business recessions the unemployment of workers displaced by technological change in the typesetting industry Points: 0 Points: 0 Points: 0

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    27. Multiple Choice: Scarcity in economics means: Question Scarcity in economics means: Answer We do not have sufficient resources to produce all the goods and services we want. The wants of people are limited. There must be poor people in rich countries. Shortages exist in nearly all markets. 28. Multiple Choice: If resources are “scarce,&rdquo... Question If resources are “scarce,” it means that they: Answer cannot provide enough goods or services to satisfy all human material wants and needs. have no opportunity cost. are probably not valued by consumers. have an unlimited supply. 29. Multiple Choice: A key theme fundamental to all of eco... Question A key theme fundamental to all of economics is: Answer There are limited wants. We are a rich country but are simply not aware of it. People have unlimited wants facing limited means to satisfy them. There are unlimited resources. 30. Multiple Choice: The problem of scarcity is confronted... Question The problem of scarcity is confronted by: Answer industrialized societies only. preindustrialized societies only. Points: 0 Points: 0 Points: 0 Points: 0

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    societies governed by communist philosophies only. all societies. 31. Multiple Choice: When we are forced to make choices, w... Question When we are forced to make choices, we are facing the concept of: Answer ceteris paribus. free goods. scarcity. the margin. 32. Multiple Choice: The basic concern of microeconomics is: Question The basic concern of microeconomics is: Answer to keep business firms from losing money. to prove that capitalism is better than socialism. to study the choices people make. to use unlimited resources to produce goods and services to satisfy limited wants. 33. Multiple Choice: How people choose among the alternati... Question How people choose among the alternatives available to them is: Answer not part of the study of economics. impossible to describe. the study of microeconomics. not important. 34. Multiple Choice: We are forced to make choices because... Question We are forced to make choices because of: Answer exploitation. Points: 0 Points: 0 Points: 0 Points: 0

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    efficiency. scarcity. the margin. 35. Multiple Choice: Scarcity exists when: Question Scarcity exists when: Answer making choices among two or more alternatives is not necessary. individuals can have more of any good. individuals can have more of one good but only at the expense of another. resources are unlimited. 36. Multiple Choice: Scarcity in economics means: Question Scarcity in economics means: Answer We do not have sufficient resources to produce all of the goods and services we want. The wants of people are limited. There must be poor people in rich countries. Economists are clearly not doing their jobs. 37. Multiple Choice: Although water is very abundant in mo... Question Although water is very abundant in most places, it is scarce because: Answer it has no alternative uses. there is not enough of it to meet all needs. it is a free good. scarce goods in general are not all that costly. Points: 0 Points: 0 Points: 0

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    38. Multiple Choice: Water is considered a scarce good bec... Question Water is considered a scarce good because: Answer not enough of it is available for all needs. it does not have any uses. scarce goods are less expensive. not enough of it is available for all needs and because it is less expensive. 39. Multiple Choice: The problem of determining what goods... Question The problem of determining what goods and services society should produce: Answer exists because we can produce more than we need or want. exists because there are not enough resources to provide all of the goods and services that people want to purchase. would not exist if all goods and services were scarce. would not exist if government owned all of the resources. 40. Multiple Choice: In China, which of the following woul... Question In China, which of the following would not be a resource in the production of rice? Answer fertile land labor capital equipment money 41. Multiple Choice: A resource is anything that: Question A resource is anything that: Answer can be used in production. you pay for. is in scarce supply. Points: 0 Points: 0 Points: 0 Points: 0

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    can be consumed. 42. Multiple Choice: We have to make choices because: Question We have to make choices because: Answer we have unlimited income. resources are scarce. resources are infinite with good planning, trade-offs can be avoided. 43. Multiple Choice: When a chef creates a dinner plate of... Question When a chef creates a dinner plate of food for a customer, which of the following represents the physical capital resource? Answer the chef himself or herself the oven the food ingredients the chef's training and experience 44. Multiple Choice: Manny is attending college and majori... Question Manny is attending college and majoring in economics. Manny is improving his: Answer land. labor. capital. human capital. 45. Multiple Choice: Which is not an example of a resource? Question Which is not an example of a resource? Answer land labor Points: 0 Points: 0 Points: 0 Points: 0

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    capital production 46. Multiple Choice: Which of the following can best be co... Question Which of the following can best be considered the resources used in the production of computers? Answer money from investors wages of the engineers computer engineers taxes paid on the profits from the sale of the computers 47. Multiple Choice: Opportunity cost is: Question Opportunity cost is: Answer about half of the monetary cost of a product. the dollar payment for a product. the benefit derived from a product. the value of the best alternative forgone in making any choice. 48. Multiple Choice: The opportunity cost of something is: Question The opportunity cost of something is: Answer greater during periods of rising prices. equal to the money cost. less during periods of falling prices. what is given up to acquire it. 49. Multiple Choice: Whenever a choice is made: Question Whenever a choice is made: Points: 0 Points: 0 Points: 0 Points: 0

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    Answer the cost of that choice could be referred to as opportunity cost. the cost is easy to measure in dollar terms. efficiency is improved. scarcity is not the problem. 50. Multiple Choice: You can spend $100 on either a new ec... Question You can spend $100 on either a new economics textbook or a new CD player. If you choose to buy the new economics textbook, the opportunity cost is: Answer $100. your enjoyment of the new CD player. both the $100 and the your enjoyment of the new CD player. impossible to determine. 51. Multiple Choice: Margo spends $10,000 on one year's co... Question Margo spends $10,000 on one year's college tuition. The opportunity cost of spending one year in college for Margo is: Answer $10,000. whatever she would have purchased with the $10,000 instead. whatever she would have earned had she not been in college. whatever she would have purchased with the $10,000 and whatever she would have earned had she not been in college. 52. Multiple Choice: If the state government allocates add... Question If the state government allocates additional spending on education, the opportunity cost is: Answer zero. the dollar amount of the additional spending. considered only if additional taxes need to be raised to fund the spending. Points: 0 Points: 0 Points: 0

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    measured in terms of the best alternative uses for that money. 53. Multiple Choice: Khalil is offered a free ticket to th... Question Khalil is offered a free ticket to the opera. His opportunity cost of going to the opera is: Answer zero—the tickets were free. the price listed on the ticket. whatever Khalil would have done had he not gone to the opera. the price listed on the ticket or whatever Khalil would have done had he not gone to the opera. 54. Multiple Choice: The cost of leaving the skating champ... Question The cost of leaving the skating championship before it ends is ________, while the cost of staying for the entire match is ________. Answer the opportunity cost of not seeing the perfect “10” performance that happens; zero—the ticket to the championship is already paid, so there is no cost the opportunity cost of not seeing the perfect “10” performance that happens; the opportunity cost of what else you could have done during that time zero—you don't have to pay to leave; zero—the ticket to the match is already paid so there is no cost the cost of the ticket; the cost of the ticket 55. Multiple Choice: A new fast-food restaurant offered a ... Question A new fast-food restaurant offered a free meal (valued at $5) a week for a year to its first 100 customers. Ramona camped out for 48 hours before the opening to be one of the first 100 customers. The cost of the free meal a week for a year for Ramona was: Answer zero. $260. whatever she would have done with those 48 hours. The cost is impossible to determine. Points: 0 Points: 0 Points: 0

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    56. Multiple Choice: The local Taco Hut charges the same p... Question The local Taco Hut charges the same price for everything on its menu: $3 will buy a taco, a burrito, or nachos. You buy the taco and think that if you had not purchased the taco, you would have purchased the burrito. The opportunity cost of the taco is: Answer the $3. your enjoyment of the burrito. the $3 and your enjoyment of the burrito. the $3, your enjoyment of the burrito, and your enjoyment of the nachos. 57. Multiple Choice: For an economist, the cost of somethi... Question For an economist, the cost of something is: Answer the amount of money you paid for it. what you gave up to get it. always equal to its market value. the quantity of resources used to produce it. 58. Multiple Choice: The best measure of the opportunity c... Question The best measure of the opportunity cost of any choice is: Answer the monetary cost of that choice. whatever you have given up to make that choice, even if no monetary costs are involved. the cost associated with not taking full advantage of the opportunity offered by that choice. your hourly wage. 59. Multiple Choice: While buying refreshments for an upco... Question Points: 0 Points: 0 Points: 0 Points: 0

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    While buying refreshments for an upcoming party, you notice that a six-pack of Americana Beer costs $2 and a six-pack of Bavarian Beer costs $4. You buy the six-pack of Bavarian Beer, although you wonder if maybe two six-packs of Americana Beer would have been a better choice. The opportunity cost of the Bavarian Beer is: Answer the $4. a six-pack of Americana Beer. two six-packs of Americana Beer. the $4 and the six-pack of Americana Beer. 60. Multiple Choice: Your elderly grandma tells you: &ldqu... Question Your elderly grandma tells you: “I haven't been taking my beloved walks because I'm concerned about falling and getting hurt. See, there is always a cost to doing something. But if you don't do anything, then there is no cost.” Your grandma does not understand the concept of: Answer scarcity in economics. efficiency in economics. opportunity cost in economics. marginal analysis in economics. 61. Multiple Choice: The cost of leaving a championship so... Question The cost of leaving a championship soccer match before it ends is ________, while the cost of staying for the entire match is ________. Answer the opportunity cost of not seeing the winning goal with two minutes to go; zero—the ticket to the match is already paid so there is no cost the opportunity cost of not seeing the winning goal with two minutes to go; the opportunity cost of what else you could have done during that time zero—you don't have to pay to leave; zero—the ticket to the match is already paid so there is no cost the cost of the ticket; also the cost of the ticket 62. Multiple Choice: Zoe's grandparents are excited about ... Question Points: 0 Points: 0 Points: 0

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    Zoe's grandparents are excited about finally paying off their mortgage, because, as they say, “Our cost of housing is now zero.” Zoe should explain to them the economic principle of: Answer marginal analysis: if the additional cost of housing is zero, then their additional benefit is also zero. opportunity cost: by living in the house, they are giving up the opportunity to sell the house, buy a smaller one, and pocket the difference. efficiency: if their cost of housing is now zero, they should let Zoe move in without charging her any rent. Zoe is better off, and her grandparents aren't hurt. equity: it is unfair that some people are still paying off their mortgage. 63. Multiple Choice: The university recently inherited a l... Question The university recently inherited a large mansion from a wealthy alumnus. The university plans to use the mansion for faculty parties and to house distinguished guests. The opportunity cost of the mansion to the university is: Answer zero, because it was a gift. the original cost of building the mansion the amount the university would receive if it sold the mansion. the cost of catering the parties at the mansion 64. Multiple Choice: A new startup airline is offering fre... Question A new startup airline is offering free round-trip tickets to anywhere to the first 600 people who enter the office on the airline's first day of business. You arrive 24 hours before they are scheduled to open to be sure to get the free tickets, and you buy food from vendors while waiting in line. The cost of the tickets to you is: Answer zero. just the cost of food while you wait in line. the cost of food while you wait in line and the opportunity cost of your time. the actual value of the ticket. 65. Multiple Choice: A friend comes up to you and offers t... Points: 0 Points: 0 Points: 0

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    Question A friend comes up to you and offers to give you a free ticket to the local professional team's baseball game that night. You decide to attend the game. The game takes five hours and costs you $15 for transportation. If you had not attended the game, you would have worked at your part-time job for $8 an hour. What is the cost to you of attending the game? Answer The cost is zero—the ticket is free. $65 $40 $55 66. Multiple Choice: The cost of going to college is: Question The cost of going to college is: Answer tuition and the cost of housing. tuition, the cost of housing, and the cost of books. tuition, the cost of books, and forgone income. forgone income only. 67. Multiple Choice: You have $1 to spend on a vending mac... Question You have $1 to spend on a vending machine snack. A bag of chips will cost you $1 and the candy bar will also cost you $1. If you choose the bag of chips, the opportunity cost of buying the chips is: Answer $1 plus the enjoyment you would have received from the candy bar. $2 minus the enjoyment you received from the bag of chips. $1. the enjoyment you would have received from the candy bar. 68. Multiple Choice: A college student is faced with a dif... Question A college student is faced with a difficult decision of how to spend one hour tonight. She could babysit her professor's child at an hourly wage of $7, she could work at the college library at a wage of $6, or she could finish her economics homework assignment. If she chooses to complete her homework assignment, she has incurred an opportunity cost equal to: Points: 0 Points: 0 Points: 0

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    Answer $7. $6. $13. $0. 69. Multiple Choice: If you decide to go to Cancun with yo... Question If you decide to go to Cancun with your friends during spring break, you realize you cannot go to Paris with your sister in the summer. This statement best represents this economic concept: Answer The real cost of something is what you must give up to get it. “How much” is a decision at the margin. People usually exploit opportunities to make themselves better off. There are gains from trade. 70. Multiple Choice: You decide to join the economics club... Question You decide to join the economics club, but this means you can't join the accounting club because it meets at the same time. This statement best represents this economic concept: Answer The real cost of something is what you must give up to get it. “How much” is a decision at the margin. People usually exploit opportunities to make themselves better off. There are gains from trade. 71. Multiple Choice: The student center on campus has burr... Question The student center on campus has burritos, bagels, or burgers for lunch, and they all cost the same. You decide to have a burger today, but if they were out of burgers, you would have bought a bagel. Your opportunity cost is: Answer your enjoyment of the burger. your enjoyment of the bagel. Points: 0 Points: 0 Points: 0

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    your enjoyment of the burrito. your enjoyment of the bagel and burrito. 72. Multiple Choice: The economic way of thinking uses: Question The economic way of thinking uses: Answer the analysis of benefits but not costs. the analysis of costs but not benefits. making choices at the margin. making the distinction between microeconomics and macroeconomics. 73. Multiple Choice: A choice made ________ is a choice wh... Question A choice made ________ is a choice whether to do a little more or a little less of something. Answer at the front end in the beginning at the margin ceteris paribus 74. Multiple Choice: Which of the following is the best ex... Question Which of the following is the best example of making a choice at the margin? Answer buying a new car quitting your job drinking another cup of coffee attending college 75. Multiple Choice: You decide whether to eat one more sl... Question You decide whether to eat one more slice of pizza based on how hungry you feel. This statement best represents this economic concept: Points: 0 Points: 0 Points: 0 Points: 0

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    Answer resources are scarce. the real cost of something is what you must give up to get it. “How much” is a decision at the margin. there are gains from trade. 76. Multiple Choice: The concept of the margin deals with: Question The concept of the margin deals with: Answer making incremental choices. all or none of something. engaging in unethical activities. making difficult choices. 77. Multiple Choice: A choice made ________ is a choice wh... Question A choice made ________ is a choice whether to do a little more or a little less of something. Answer at the fringe in the beginning at the margin after the fact 78. Multiple Choice: The best example of making a choice a... Question The best example of making a choice at the margin is: Answer buying a new computer. quitting your job. eating another slice of pizza. attending college. Points: 0 Points: 0 Points: 0

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    79. Multiple Choice: Marla will make $10 by tutoring for a... Question Marla will make $10 by tutoring for an additional hour, but she will lose an hour of studying for her economics test. Marla decides to study rather than tutor. Marla's choice indicates that she: Answer values an additional hour of studying more than the $10 she would earn tutoring. values an hour of studying less than the $10 she would earn tutoring. does not understand that there is no benefit from studying. doesn't need the money. 80. Multiple Choice: Thinking in economic terms, when Mary... Question Thinking in economic terms, when Mary Sweettooth is deciding whether to eat another brownie, she: Answer considers only the price of the brownie. considers only how much additional exercise she will need to do to work off the calories associated with eating another brownie. compares all of the benefits and costs of eating another brownie. considers whether she can do so without anyone else noticing. 81. Multiple Choice: For which of the following decisions ... Question For which of the following decisions would marginal analysis be most relevant? Answer Should I go to college or work after graduating from high school? Should I eat another doughnut? Should I use $20,000 as a down payment on a house or buy a car? Should I get married? 82. Multiple Choice: For which of the following decisions ... Question For which of the following decisions would marginal analysis be most relevant? Answer Should George accept a job with Delta Airlines or with Greenpeace? Points: 0 Points: 0 Points: 0 Points: 0

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