Quiz
An arrangement that allows buyers and sellers to exchange things is called __________.
Question 1 options:
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| a contract |
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| a market |
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| money |
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| efficient |
An unemployed individual decides to spend the day fishing. The opportunity cost of fishing is __________.
Question 2 options:
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| the cost of bait and any other monetary expenses |
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| zero, because the person doesn't have a job |
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| the cost of bait, any other monetary expenses, and the value of the individual's wages while he was working |
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| the cost of bait, any other monetary expenses, and the value of the best alternative use of the individual's time |
Economics is best defined as the study of __________.
Question 3 options:
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| financial decision-making |
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| how consumers make purchasing decisions |
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| the choices made by people faced with scarcity |
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| inflation, unemployment, and economic growth |
If an economy is fully utilizing its resources, it can produce more of one product only if it __________.
Question 4 options:
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| doubles manufacturing of the product |
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| produces less of another product |
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| adds more people to the labor force |
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| reduces the prices of the most expensive products |
Another factor that was responsible for roughly one-third of hybrid vehicles purchased in 2007 was an increase in the price of gasoline. The increase in sales due to higher gasoline prices describe the economic concept of __________.
Question 5 options:
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| using assumptions to simplify |
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| ceteris paribus |
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| marginal thinking |
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| rational self-interest |
Jerome has a "C"; average in his philosophy course and a "B" average in his economics course. He decides to study an extra hour for his philosophy exam. This is an example of __________.
Question 6 options:
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| thinking at the margin |
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| using assumptions to simplify |
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| ceteris paribus |
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| caveat emptor |
The opportunity cost of something is __________.
Question 7 options:
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| the cost of the labor used to produce it |
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| what you sacrifice to get it |
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| the price charged for it |
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| the search cost required to find it |
Deciding if a company will produce automobiles by robotics or manual labor answers the economic question of __________.
Question 8 options:
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| who consumes the products produced |
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| what products will be produced |
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| where will the products be consumed |
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| how will the products be produced |
Referring to the figure above, if you increase the production of farm goods, what other area is affected?
Question 9 options:
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| the price of produce |
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| the production of manufactured goods |
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| how much people can purchase |
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| the wages earned by farm workers |
Angelina, age 7, decides to dress up like Princess Fiona for Halloween. What is the opportunity cost of her decision?
Question 10 options:
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| the cost of the costume |
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| the fact that she can't dress up like Dora the Explorer, her second choice |
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| zero, because 7 year olds don't have opportunity costs |
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| the cost of the Lady Gaga costume which she did not want |
You rent a DVD of The Dark Knight Rises. The rental is for seven days and you watch the movie on the first day. You tell a friend about the film and your friend asks to come over and watch the movie with you before it is due back. What is your opportunity cost if you decide to watch the movie a second time instead of going to a football game?
Question 11 options:
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| the entire cost of the movie rental, since you have already watched the movie |
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| one half the rental cost, because you have already watched the movie one time |
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| The answer depends on how much you liked the movie in the first place. |
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| the football game you forego by watching the movie again |
The opportunity cost of going to college __________.
Question 12 options:
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| is zero if your parents pay your tuition |
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| is equal to the cost of tuition, room and board, and other expenses |
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| includes wages you lose by going to school instead of working |
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| is the same for all students at a particular school who pay full tuition |
The 3 key economic questions include all of the following EXCEPT __________.
Question 13 options:
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| "What products do we produce?" |
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| "How do we produce these products?" (Incorrecr) |
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| "Where should these products be produced?" |
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| "Who consumes the products?" |
Scarcity can best be defined as a situation in which __________.
Question 14 options:
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| there are no buyers willing to purchase what sellers have produced |
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| there are not enough goods to satisfy all of the buyers' demand |
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| the resources we use to produce goods and services are limited |
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| there is more than enough money to satisfy consumers' wants |
After the implementation of the congestion tax in London, traffic volume was reduced and travel time for cars and buses was cut in half. This is an example of __________.
Question 15 options:
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| responding to incentives |
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| the role of pricing in allocating resources |
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| caveat emptor |
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| comparative advantage |
When economists assume that people are rational and respond to incentives, they mean __________.
Question 16 options:
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| people act with kindness |
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| people are altruistic |
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| people act in their own self-interest |
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| people are selfish |
The production possibilities curve in Figure 2.1 illustrates the notion of __________.
Question 17 options:
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| increased factory goods production |
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| increased farm produce production |
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| diminishing resources |
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| opportunity cost |
Economic models are used to __________.
Question 18 options:
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| explain every detail of an economic theory |
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| explore decision making by individuals, firms, and other organizations |
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| build physical renditions of government construction projects |
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| represent the complexities of economic environments |
The principle that the cost of something is equal to what is sacrificed to get it is known as the __________.
Question 19 options:
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| marginal principle |
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| principle of opportunity cost |
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| principle of diminishing returns |
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| reality principle |
To make things simpler and focus attention on what really matters, economists would __________.
Question 20 options:
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| use assumptions |
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| ignore all variables |
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| think at the margin |
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| respond to incentives |
