Question 1

Jody has purchased a non-refundable $25 ticket to attend a Miley Cyrus concert on Friday evening.Subsequently,she is asked to go to dinner and dancing at no expense to her.If she uses cost-benefit analysis to choose between going to the concert and going on the date,she should:

Accepted Answer

A)  include only the entertainment value of the concert in the opportunity cost of going on the date.
B)  include the cost of the ticket plus the entertainment value of the concert in the opportunity cost of going on the date.
C)  include only the cost of concert ticket in the opportunity cost of going on the date.
D)  include neither the cost of the ticket nor the entertainment value of the concert in the opportunity cost of going on the date.

Question 2

The cost-benefit model used by economists is:

Accepted Answer

A)  unrealistic because it is too detailed and specific to apply to a variety of situations.
B)  unrealistic because everyone can think of times when he or she violated the principle.
C)  useful because everyone follows it all of the time.
D)  useful because most people follow it most of the time.

Question 3

During times of high unemployment,colleges often observe an increase in enrollment even if tuition remains unchanged.Why?

Accepted Answer

A)  Students do not know about the decision pitfalls and go to college even though the net benefit is negative.
B)  The opportunity cost of attending college is lower because students are less likely to have good full-time jobs.
C)  The opportunity cost of attending college is higher because good jobs are harder to find.
D)  The benefit of attending college is lower because college graduates are less likely to find jobs upon graduation.

Question 4

Economic models claim to be:

Accepted Answer

A)  reasonable abstractions of how people make choices,highlighting the most important factors.
B)  exact replications of the decision-making process people use.
C)  interesting chalkboard exercises with little applicability to the real world.
D)  exceptionally accurate methods of predicting nearly all behavior of everyone.

Question 5

The number of US households with access to the Internet and those with broadband connections is growing rapidly.As an economic naturalist,one could predict that when a major purchase is being considered,families will:

Accepted Answer

A)  always buy online.
B)  never buy online.
C)  collect more information before making the purchase because the cost of finding and acquiring it is lower.
D)  collect more information before making the purchase because the benefit of information is now larger.

Question 6

If all the world's resources were to magically increase a hundredfold,then:

Accepted Answer

A)  the scarcity principle would still govern behavior.
B)  economics would no longer be relevant.
C)  the scarcity principle would disappear.
D)  tradeoffs would become unnecessary.

Question 7

Last year interest rates fell.The field of economics that would be most concerned with this is:

Accepted Answer

A)  microeconomics.
B)  macroeconomics.
C)  economic naturalism.
D)  marginal economics.

Question 8

An economic naturalist is described as someone who:

Accepted Answer

A)  uses economic arguments to protect forests and wetlands from development.
B)  has a natural talent for drawing graphs.
C)  applies economic insights to everyday life.
D)  studies the process of natural selection in a marginal cost and marginal benefit framework.

Question 9

Larry was accepted at three different graduate schools,and must choose one.Elite U costs $50,000 per year and did not offer Larry any financial aid.Larry values attending Elite U at $60,000 per year.State College costs $30,000 per year,and offered Larry an annual $10,000 scholarship.Larry values attending State College at $40,000 per year.NoName U costs $20,000 per year,and offered Larry a full $20,000 annual scholarship.Larry values attending NoName at $15,000 per year.
Larry has decided to go to Elite U.Assuming that all of the values described are correct,for Larry to decide on Elite U,he must have:

Accepted Answer

A)  calculated his surplus from each choice and picked the one with the highest surplus.
B)  underestimated the benefits of attending No Name.
C)  miscalculated the surplus of attending Elite U.
D)  determined the opportunity cost of each choice and picked the one with the lowest opportunity cost.

Question 10

Suppose a person makes a choice that seems inconsistent with the cost-benefit principle.Which of the following statements represents the most reasonable conclusion to draw?

Accepted Answer

A)  The person (explicitly or implicitly) over-estimated the benefits or under-estimated the costs or both.
B)  The cost-benefit principle is rarely true.
C)  The person does not grasp how decisions should be made.
D)  The person is simply irrational.

Question 11

You had to pay $600 (non-refundable) for your meal plan for Fall semester,which gives you up to 150 meals.If you eat only 100 meals,your marginal cost for the 100th meal is:

Accepted Answer

A)  $6
B)  $4
C)  $0.25
D)  $0

Question 12

If the marginal costs of 1,2,and 3 hours of talking on the phone are $50,$75,and $105 respectively,then the total costs are of 1,2 and 3 hours of talking on the phone are:

Accepted Answer

A)  $50,$150,and $315 respectively.
B)  $50,$41.67,and $115 respectively.
C)  $50,$125,and $230 respectively.
D)  $50,$175,and $405 respectively.

Question 13

Jack has a ticket to see Bo Bice for which he paid $30 yesterday.He takes an unpaid day off from work to get ready for the concert.When he arrives at the concert,five different people offer him $70 for his ticket.Jack decides to keep his ticket.The cost to Jack of seeing Bo Bice is:

Accepted Answer

A)  $30.
B)  $40.
C)  $70.
D)  $70 plus his forgone earnings.

Question 14

You own a pizza shop called "Pizzas'R' Us".Currently you are paying your cooks an hourly wage of $20.You sell a medium pizza for $10.By hiring more cooks,you can increase your pizza production as shown in the following table.   Number of  cooks  Total production of  pizzas each hour 00142739410510\begin{array} { | l | l | } \hline \begin{array} { l } 	ext { Number of } \	ext { cooks }\end{array} & \begin{array} { l } 	ext { Total production of } \	ext { pizzas each hour }\end{array} \\hline 0 & 0 \\hline 1 & 4 \\hline 2 & 7 \\hline 3 & 9 \\hline 4 & 10 \\hline 5 & 10 \\hline\end{array} Number of  cooks ​012345​ Total production of  pizzas each hour ​04791010​​ 
If you operate one hour every day,what is the marginal benefit of hiring the 3rd cook?

Accepted Answer

A)  $10
B)  $20
C)  $30
D)  $40

Question 15

The average benefit of an activity is the:

Accepted Answer

A)  total benefit of the activity divided by the number of units.
B)  number of units divided by the total benefit of the activity.
C)  number of units times the total benefit of the activity.
D)  extra benefit for one additional unit of the activity.

Question 16

Moe has a big exam tomorrow.He considered studying this evening,but decided to go out with Curly instead.Since Moe always chooses rationally,it must be true that:

Accepted Answer

A)  the opportunity cost of studying tonight is less than the value Moe gets from spending time with Curly.
B)  the opportunity cost of studying tonight is equal to the value Moe gets from spending time with Curly minus the cost of earning a low grade on the exam.
C)  Moe gets more benefit from spending time with Curly than from studying.
D)  Moe gets less benefit from spending time with Curly than from studying.

Question 17

You had to pay $600 (non-refundable) for your meal plan for the Fall semester,which gives you up to 150 meals.If you eat all of the meals,your average cost for a meal equals:

Accepted Answer

A)  $6.
B)  $5.
C)  $4.
D)  $0.25.

Question 18

If Jane works for 6 hours she can rent 12 apartments,and if she works for 7 hours she can rent 15 apartments.The marginal benefit of the 7th hour of Jane's work equals:

Accepted Answer

A)  12 apartments.
B)  15 apartments.
C)  1 apartment.
D)  3 apartments.

Question 19

Most people make some decisions based on intuition rather than calculation.This is:

Accepted Answer

A)  irrational,because intuition is often wrong.
B)  consistent with the economic model of decision-making,because calculating costs and benefits leads to decision-making pitfalls.
C)  consistent with the economic model because people intuitively compare the relative costs and benefits of the choices they face.
D)  inconsistent with the economic model,but rational because intuition takes into account non-financial considerations.

Question 20

You paid $35 for a ticket (which is non-refundable) to see SPAM,a local rock band,in concert on Saturday.(Assume that you would not have been willing to pay any more than $35 for this concert. ) Your boss called and she is looking for someone to cover a shift on Saturday at the same time as the concert.You will have to work 4 hours and she will pay you time and a half,which is $9/hr.
Your economic surplus of going to work on Saturday is:

Accepted Answer

A)  $0
B)  $1
C)  $35
D)  $36

Exam 1: Thinking Like an Economist

An economic naturalist is described as someone who:

Correct Answer
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The cost-benefit model used by economists is:

Correct Answer
verified

You had to pay $600 (non-refundable) for your meal plan for the Fall semester,which gives you up to 150 meals.If you eat all of the meals,your average cost for a meal equals:

Correct Answer
verified

Correct Answer
verified

The number of US households with access to the Internet and those with broadband connections is growing rapidly.As an economic naturalist,one could predict that when a major purchase is being considered,families will:

Correct Answer
verified

Suppose a person makes a choice that seems inconsistent with the cost-benefit principle.Which of the following statements represents the most reasonable conclusion to draw?

Correct Answer
verified

Jody has purchased a non-refundable $25 ticket to attend a Miley Cyrus concert on Friday evening.Subsequently,she is asked to go to dinner and dancing at no expense to her.If she uses cost-benefit analysis to choose between going to the concert and going on the date,she should:

Correct Answer
verified

You had to pay $600 (non-refundable) for your meal plan for Fall semester,which gives you up to 150 meals.If you eat only 100 meals,your marginal cost for the 100^th meal is:

Correct Answer
verified

The average benefit of an activity is the:

Correct Answer
verified

Correct Answer
verified

Last year interest rates fell.The field of economics that would be most concerned with this is:

Correct Answer
verified

If all the world's resources were to magically increase a hundredfold,then:

Correct Answer
verified

Correct Answer
verified

During times of high unemployment,colleges often observe an increase in enrollment even if tuition remains unchanged.Why?

Correct Answer
verified

Economic models claim to be:

Correct Answer
verified

If the marginal costs of 1,2,and 3 hours of talking on the phone are $50,$75,and $105 respectively,then the total costs are of 1,2 and 3 hours of talking on the phone are:

Correct Answer
verified

Moe has a big exam tomorrow.He considered studying this evening,but decided to go out with Curly instead.Since Moe always chooses rationally,it must be true that:

Correct Answer
verified

Most people make some decisions based on intuition rather than calculation.This is:

Correct Answer
verified

Jack has a ticket to see Bo Bice for which he paid $30 yesterday.He takes an unpaid day off from work to get ready for the concert.When he arrives at the concert,five different people offer him $70 for his ticket.Jack decides to keep his ticket.The cost to Jack of seeing Bo Bice is:

Correct Answer
verified

If Jane works for 6 hours she can rent 12 apartments,and if she works for 7 hours she can rent 15 apartments.The marginal benefit of the 7^th hour of Jane's work equals:

Correct Answer
verified

Exam 1: Thinking Like an Economist

An economic naturalist is described as someone who:

Correct AnswerverifiedShow Answer

The cost-benefit model used by economists is:

Correct AnswerverifiedShow Answer

You had to pay $600 (non-refundable) for your meal plan for the Fall semester,which gives you up to 150 meals.If you eat all of the meals,your average cost for a meal equals:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The number of US households with access to the Internet and those with broadband connections is growing rapidly.As an economic naturalist,one could predict that when a major purchase is being considered,families will:

Correct AnswerverifiedShow Answer

Suppose a person makes a choice that seems inconsistent with the cost-benefit principle.Which of the following statements represents the most reasonable conclusion to draw?

Correct AnswerverifiedShow Answer

Jody has purchased a non-refundable $25 ticket to attend a Miley Cyrus concert on Friday evening.Subsequently,she is asked to go to dinner and dancing at no expense to her.If she uses cost-benefit analysis to choose between going to the concert and going on the date,she should:

Correct AnswerverifiedShow Answer

You had to pay $600 (non-refundable) for your meal plan for Fall semester,which gives you up to 150 meals.If you eat only 100 meals,your marginal cost for the 100th meal is:

Correct AnswerverifiedShow Answer

The average benefit of an activity is the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Last year interest rates fell.The field of economics that would be most concerned with this is:

Correct AnswerverifiedShow Answer

If all the world's resources were to magically increase a hundredfold,then:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

During times of high unemployment,colleges often observe an increase in enrollment even if tuition remains unchanged.Why?

Correct AnswerverifiedShow Answer

Economic models claim to be:

Correct AnswerverifiedShow Answer

If the marginal costs of 1,2,and 3 hours of talking on the phone are $50,$75,and $105 respectively,then the total costs are of 1,2 and 3 hours of talking on the phone are:

Correct AnswerverifiedShow Answer

Moe has a big exam tomorrow.He considered studying this evening,but decided to go out with Curly instead.Since Moe always chooses rationally,it must be true that:

Correct AnswerverifiedShow Answer

Most people make some decisions based on intuition rather than calculation.This is:

Correct AnswerverifiedShow Answer

Jack has a ticket to see Bo Bice for which he paid $30 yesterday.He takes an unpaid day off from work to get ready for the concert.When he arrives at the concert,five different people offer him $70 for his ticket.Jack decides to keep his ticket.The cost to Jack of seeing Bo Bice is:

Correct AnswerverifiedShow Answer

If Jane works for 6 hours she can rent 12 apartments,and if she works for 7 hours she can rent 15 apartments.The marginal benefit of the 7th hour of Jane's work equals:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

You had to pay $600 (non-refundable) for your meal plan for Fall semester,which gives you up to 150 meals.If you eat only 100 meals,your marginal cost for the 100^th meal is:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

If Jane works for 6 hours she can rent 12 apartments,and if she works for 7 hours she can rent 15 apartments.The marginal benefit of the 7^th hour of Jane's work equals:

Correct Answer
verified