Question 1

If Faith attends college, it will take her four years, during which time she will earn no income. She will pay $50,000 for tuition, $12,000 for room and board, and $5,000 for books. If she spends the four years working rather than attending college, she will pay $18,000 for room and board, pay no intuition, and buy no books. Based on this information, Faith's economic cost of attending college would be $67,000 if, over the four years, she could earn

Accepted Answer

A)   $12,000 instead of attending college.
B)   $14,000 instead of attending college.
C)   $16,000 instead of attending college.
D)   $18,000 instead of attending college.E) A) and D)
F) C) and D)

Question 2

The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place.

Accepted Answer

A) True 
 B)False

Question 3

Tuition is the single-largest cost of attending college for most students.

Accepted Answer

A) True 
 B)False

Question 4

The marginal benefit Kyra gets from eating a second sandwich is

Accepted Answer

A)   the total benefit Kyra gets from eating two sandwiches minus the total benefit she gets from eating one sandwich.
B)   the same as the total benefit she gets from eating two sandwiches.
C)   less than the marginal cost of eating the second sandwich since she chose to eat the second sandwich.
D)   the total benefit Kyra gets from eating three sandwiches minus the total benefit she gets from eating two sandwiches.E) B) and C)
F) All of the above

Question 5

What does the term "marginal change" mean?

Accepted Answer

A small incremental ...

Question 6

Scenario 1-4 You have the afternoon free. You have a choice between going to the movies with a friend or studying economics for three hours. If you go to the movies, you will spend $12.00 on a ticket and $4.75 on popcorn. If you choose to study economics for three hours, you will raise your exam grade by 15 points.
-Refer to Scenario 1-4. What is your opportunity cost of studying economics?

Accepted Answer

The enjoyment you wo...

Question 7

Maureen's college raises the cost of room and board per semester. This increase raises Maureen's opportunity cost of attending college

Accepted Answer

A)   even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost reduces Maureen's incentive to attend college.
B)   even if the amount she would have to pay for room and board if she didn't attend college rose by the same amount. An increase in opportunity cost increases Maureen's incentive to attend college.
C)   only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost reduces Maureen's incentive to attend college.
D)   only if the amount she would have to pay for room and board if she didn't attend college rose by less than the increase in the amount her college charges. An increase in opportunity cost increases Maureen's incentive to attend college.E) A) and B)
F) A) and C)

Question 8

Equality refers to how the pie is divided, and efficiency refers to the size of the economic pie.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is an example of an externality?

Accepted Answer

A)   Annie purchases a new dress.
B)   Antonio's dog barks loudly during the night, waking his neighbors.
C)   Harold sells a book to Cathy, who reads the book and then gives it to James as a gift.
D)   Gloria watches a scary movie.E) A) and B)
F) A) and C)

Question 10

The cost of an action is measured in terms of foregone opportunities.

Accepted Answer

A) True 
 B)False

Question 11

The overriding reason why households and societies face many decisions is that

Accepted Answer

A)   resources are scarce.
B)   goods and services are not scarce.
C)   incomes fluctuate with business cycles.
D)   people, by nature, tend to disagree.E) A) and D)
F) C) and D)

Question 12

Scenario 1-4 You have the afternoon free. You have a choice between going to the movies with a friend or studying economics for three hours. If you go to the movies, you will spend $12.00 on a ticket and $4.75 on popcorn. If you choose to study economics for three hours, you will raise your exam grade by 15 points.
-Refer to Scenario 1-4. What is your opportunity cost of going to the movies?

Accepted Answer

$16.75 and...

Question 13

A direct or positive relationship exists between a country's

Accepted Answer

A)   productivity and its standard of living.
B)   amount of government spending and its productivity.
C)   total population and its average citizen's income.
D)   rate of population growth and the extent of its trade with other countries.E) B) and C)
F) C) and D)

Question 14

Scenario 1-3
It costs a company $35,000 to produce 700 graphing calculators. The company's cost will be $35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators.
-Refer to Scenario 1-3. A customer is willing to pay $60 for the 701th calculator. Should the company produce and sell it? Explain.

Accepted Answer

No, because the marg...

Question 15

Prices usually reflect

Accepted Answer

A)   only the value of a good to society.
B)   only the cost to society of making a good.
C)   both the value of a good to society and the cost to society of making the good.
D)   neither the value of a good to society nor the cost to society of making the good.E) All of the above
F) C) and D)

Question 16

When you calculate your true costs of going to college, what portion of your room-and-board expenses should be included?

Accepted Answer

A)   Your full room-and-board expenses should always be included.
B)   None of your room-and-board expenses should ever be included.
C)   You should include only the amount by which your room-and-board expenses exceed the income you earn while attending college.
D)   You should include only the amount by which your room-and-board expenses exceed the expenses for rent and food if you were not in college.E) A) and B)
F) B) and D)

Question 17

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

Accepted Answer

A)   Michelle can attend the concert only if she takes her sister with her.
B)   Michael is hungry and homeless.
C)   Andrea must repair the tire on her bike before she can ride it to class.
D)   Dani must decide between going to Florida or Brazil for spring break.E) B) and C)
F) A) and C)

Question 18

Economists use the term to refer to fluctuations in economic activity, such as employment and production.

Accepted Answer

The answer of Economists use the term to refer to...

Question 19

An example of a firm with market power is a

Accepted Answer

A)   delicatessen in New York.
B)   cable TV provider in Tulsa.
C)   clothing store in Chicago.
D)   family farm in Kansas.E) A) and D)
F) A) and C)

Question 20

Trade between the United States and Guatemala

Accepted Answer

A)   benefits both the United States and Guatemala.
B)   is a losing proposition for the United States because Guatemalan labor is less expensive than U.S. labor.
C)   is a losing proposition for Guatemala because capital is much more abundant in the U.S. than in Guatemala.
D)   is a losing proposition for Guatemala because U.S. workers are more productive than Guatemalan workers.E) A) and C)
F) All of the above

Exam 1: Ten Principles of Economics

The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place.

Correct Answer
verified

Equality refers to how the pie is divided, and efficiency refers to the size of the economic pie.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
The enjoyment you wo...
View Answer

Correct Answer
verified
No, because the marg...
View Answer

The marginal benefit Kyra gets from eating a second sandwich is

Correct Answer
verified

Trade between the United States and Guatemala

Correct Answer
verified

Correct Answer
verified
$16.75 and...
View Answer

Maureen's college raises the cost of room and board per semester. This increase raises Maureen's opportunity cost of attending college

Correct Answer
verified

Economists use the term to refer to fluctuations in economic activity, such as employment and production.

Correct Answer
verified

Prices usually reflect

Correct Answer
verified

A direct or positive relationship exists between a country's

Correct Answer
verified

Which of the following is an example of an externality?

Correct Answer
verified

Correct Answer
verified

What does the term "marginal change" mean?

Correct Answer
verified
A small incremental ...
View Answer

The cost of an action is measured in terms of foregone opportunities.

Correct Answer
verified

Tuition is the single-largest cost of attending college for most students.

Correct Answer
verified

When you calculate your true costs of going to college, what portion of your room-and-board expenses should be included?

Correct Answer
verified

An example of a firm with market power is a

Correct Answer
verified

The overriding reason why households and societies face many decisions is that

Correct Answer
verified

Exam 1: Ten Principles of Economics

The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place.

Correct AnswerverifiedShow Answer

Equality refers to how the pie is divided, and efficiency refers to the size of the economic pie.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe enjoyment you wo...View AnswerShow Answer

Correct AnswerverifiedNo, because the marg...View AnswerShow Answer

The marginal benefit Kyra gets from eating a second sandwich is

Correct AnswerverifiedShow Answer

Trade between the United States and Guatemala

Correct AnswerverifiedShow Answer

Correct Answerverified$16.75 and...View AnswerShow Answer

Maureen's college raises the cost of room and board per semester. This increase raises Maureen's opportunity cost of attending college

Correct AnswerverifiedShow Answer

Economists use the term to refer to fluctuations in economic activity, such as employment and production.

Correct AnswerverifiedShow Answer

Prices usually reflect

Correct AnswerverifiedShow Answer

A direct or positive relationship exists between a country's

Correct AnswerverifiedShow Answer

Which of the following is an example of an externality?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What does the term "marginal change" mean?

Correct AnswerverifiedA small incremental ...View AnswerShow Answer

The cost of an action is measured in terms of foregone opportunities.

Correct AnswerverifiedShow Answer

Tuition is the single-largest cost of attending college for most students.

Correct AnswerverifiedShow Answer

When you calculate your true costs of going to college, what portion of your room-and-board expenses should be included?

Correct AnswerverifiedShow Answer

An example of a firm with market power is a

Correct AnswerverifiedShow Answer

The overriding reason why households and societies face many decisions is that

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The enjoyment you wo...
View Answer

Correct Answer
verified
No, because the marg...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$16.75 and...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A small incremental ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified