Econ 201 CH 1 Assessment

A. $64000 B. $110000 C. $64000 D. $90000 E. $64000 F. $70000 G. $64000 H. $50000 I. 3

Aliyah is preparing to expand her IT consulting company. The current market rate for IT professionals is $58,000 per year. Each employee she hires will also require a computer and equipment that costs $6,000 per employee annually. Hiring more employees means that Aliyah can provide consulting services to more clients each year. Each client Aliyah has will pay her $10,000 per year. The number of clients Aliyah can take on is dependent on the number of workers she hires and is depicted in the accompanying table. Use this information to calculate the marginal cost and the marginal benefit of hiring each worker. a. The first worker's marginal cost is $ . b. The first worker's marginal benefit is $ . c. The second worker's marginal cost is $ . d. The second worker's marginal benefit is $ . e. The third worker's marginal cost is $ . f. The third worker's marginal benefit is $ . g. The fourth worker's marginal cost is $ . h. The fourth worker's marginal benefit is $ . i. Using the rational rule to maximize her economic surplus, Aliyah should hire _____ workers.

A. apply to this decision because Gilberto should consider the costs and benefits associated with voting. B. apply because Lee could have been doing something else. C. apply because Lilia should choose the major that provides the greatest economic surplus. D. apply because Brendon and Jessica will have to give up something else to purchase the second vehicle.

Consider each decision in the context of the four core principles of economics. a. Gilberto is deciding whether to vote in the next election. The four core principles of economics apply to this decision because Gilberto should consider the costs and benefits associated with voting. do not apply to this decision because there is no cost involved in voting. apply to this decision because Gilberto's vote is a marginal vote that could determine the outcome of the election. do not apply to this decision because voting behavior is studied in political science. b. Lee watches a beautiful sunset from the back porch of his house. The four core principles of economics apply because Lee could have been doing something else. apply because Janet is also watching the sunset. do not apply because no decision is being made. do not apply because no money is involved. c. Lilia is deciding whether to major in economics or philosophy. The four core principles of economics do not apply because both programs cost the same and take the same amount of time to complete. apply because Lilia should choose the major that provides the greatest economic surplus. do not apply because Lilia may change her major later. apply because economics majors earn higher salaries. d. Brendon and Jessica are deciding whether to purchase a second vehicle. The four core principles of economics apply because Brendon and Jessica want a second vehicle. do not apply because there is good public transportation where Brendon and Jessica live. apply because Brendon and Jessica will have to give up something else to purchase the second vehicle. do not apply because Brendon and Jessica do not need a second vehicle.

False, economists use monetary terms because they can be quantified and compared, but economics is better described as an approach to decision making.

Consider the following statement: "Economists always put things into monetary terms; as a result, economics can most appropriately be called the study of money." Is this statement true or false? True, financial markets are the primary focus of economics. False, even though economists use money as a form of measurement, economics is better described as the study of financial markets. False, even though economists use monetary terms often, economics is better described as a governmental approach to improving market outcomes. False, economists use monetary terms because they can be quantified and compared, but economics is better described as an approach to decision making.

A. interdependence B. cost-benefit C. opportunity cost D. marginal

Consider your decision to read this textbook on economics. Identify which of the four core principles of economics is most relevant for each aspects of that decision. a. "Reading this textbook will help establish a solid foundation for understanding concepts you will learn in more advanced economics courses." This statement is related to the interdependence principle. b. "Reading this textbook will require time and effort, but doing so will help you improve your grade in this course." This statement is related to the cost-benefit principle. c. "The time you will spend reading this textbook can also be used to study for your chemistry exam." This statement is related to the opportunity cost principle. d. "Each page that you read and each practice problem that you complete will help you increase your understanding of the material." This statement is related to the marginal principle.

A: if the next best option was unemployment, many individuals may have preferred to enroll in college and gain new skills in hopes of increasing their future employment prospects. B: opportunity cost principle.

During the economic downturn of 2008-2009, the unemployment rate increased to nearly 10%. At the same time, the price of college tuition and the number of college enrollees increased. a. Which statement best explains why more people enrolled in college during this time period even as the price of tuition increased? More people enrolled because: of the bandwagon effect. When something becomes popular or trendy, ever more people are willing to pay high prices for it. of the social pressure people feel to go to college. Universities exploited this and increased the price of tuition without losing many students. if the next best option was unemployment, many individuals may have preferred to enroll in college and live off of student loans while waiting for the job market to improve. if the next best option was unemployment, many individuals may have preferred to enroll in college and gain new skills in hopes of increasing their future employment prospects. b. The core principle that best explains this is the

the marginal principle may be guiding AbbVie in determining if it is worth producing drugs for rare diseases. Since it is developing and producing treatments for rare diseases, the marginal benefits must exceed the costs.

In 2016, the top-selling pharmaceutical drug in the world was AbbVie's Humira, which is used for the treatment of several common, chronic conditions. The majority of its profits are derived from treatment of the most common diseases, but AbbVie also develops drugs for rare conditions. Why might AbbVie develop drugs for rare diseases instead of investing all of its resources toward drugs for common diseases? It is possible that the opportunity‑cost principle may encourage AbbVie to produce drugs for rare conditions, because the full benefits outweigh the costs. The company must be maximizing its total economic surplus. the marginal principle may be guiding AbbVie in determining if it is worth producing drugs for rare diseases. Since it is developing and producing treatments for rare diseases, the marginal benefits must exceed the costs. framing effects may be enticing AbbVie to develop and produce drugs for rare conditions. Since these drugs are more expensive, AbbVie will make a large profit. the interdependence principle may be guiding AbbVie to develop and produce drugs for rare conditions. Common chronic and rare conditions are often experienced by the same people, so AbbVie can easily produce drugs for both.

$15

It is a beautiful afternoon, and Jose is considering taking a leisurely two-hour stroll through the park. There are several other activities Jose is considering doing instead. The value Jose receives from each of the activities is provided in the table. What is Jose's cost of taking the stroll through the park?

A. Ivan and Samantha are both B. $10000 C. $17000 D. $27000

Ivan has inherited his mother's 1963 Chevrolet Corvette, which he values at $45,000. He decides that he might be willing to sell it, so he posts it on Craigslist for $55,000. Samantha is interested and willing to pay up to $72,000 for one, so they agree on a price of $55,000 for the car. a. ______ willing to voluntarily engage in this exchange. b. How much economic surplus, if any, does Ivan gain from engaging in this exchange? c. How much economic surplus, if any, does Samantha gain from engaging in this exchange? d. How much total surplus, if any, is gained from this exchange?

B. 4, astronomy C. 3, 1 D. left, more difficult

Jade has midterms in economics and astronomy tomorrow and only has four hours left to study. The accompanying table provides the combinations of time spent studying economics and astronomy and her expected exam scores. a. Use the graph to plot the production possibilities frontier for Jade's study options. b. Suppose Jade spends the first two hours studying economics. The opportunity cost of spending the third hour studying economics is _____ points on her _______ exam. c. Suppose Jade's goal is to maximize her combined exam scores. Calculate how many hours she should spend studying economics and how many hours she should spend studying astronomy. Jade should spend _____ hours studying economics and _____ hours studying astronomy. d. Suppose Jade's laptop dies and refuses to start up. All her notes and class materials (for both classes) are saved on its hard drive. Jade's production possibilities curve will shift to the ____, because studying becomes ______.

A. $58 ($40 meal + $8 tip + $10 uber) B. $63 ($25 meal + $30 friend + $8 at home) C. go out to dinner with her friend.

Jia is considering whether to go out to dinner at a restaurant with her friend. The meal is expected to cost $40, Jia typically leaves a 20% tip, and an Uber will cost $5 each way. Jia values the restaurant meal at $25. Jia enjoys her friend's company and is willing to pay $30 just to spend an evening with her. If Jia does not go out to the restaurant, she will eat at home, using groceries that cost her $8. a. Calculate Jia's costs associated with going out to dinner with her friend. b. Calculate Jia's benefits associated with going out to dinner with her friend. c. Based on the information, Jia should _____

A. between people or businesses in the same market. B. between markets. C. between each of your individual choices. D. through time.

Khaled is a preschool teacher working at a public school, but he is considering quitting his job to start a daycare facility of his own. Indicate which of the four types of interdependency is most relevant to each factor in Khaled's decision. Use the market for daycare facilities as Khaled's market of interest. a. Khaled knows there are few daycare facilities in the area, but many families looking for daycare. This scenario is an example of dependencies _______ b. An increase in graduation rates for teachers saturates the market for preschool teachers. This decreases the wages of teachers. This scenario is an example of dependencies ______ c. If Khaled opens his own facility, he will be responsible for taxes, insurance, licensing, and facility upkeep, among other things. However, as a teacher Khaled will only need to keep up his teaching license. In addition, Khaled will not be able to take a long vacation in the summer if he runs a daycare center. This scenario is an example of dependencies ______ d. Khaled is up for a raise in the next 6 months at his teaching job. This scenario is an example of dependencies _________

A. -$5 B. should open the lemonade stand C. a sunk cost.

Marah is deciding whether or not to open a lemonade stand. She expects to sell 20 cups of lemonade for $1 per cup. She already made a sign that cost her $10 and will have $15 worth of additional costs for cups and lemonade mix if she decides to open the stand. a. If Marah decides to open the lemonade stand, how much profit will she earn? b. Based on this information, Marah ______. c. The $10 spent on the sign represents _____

A. 8 B. 6 C. 4 D. 2 E. 1 F. 3

Neal is a coffee drinker. At the local coffee shop, the price of a cup of coffee is $3. Neal's total benefits from drinking coffee are indicated in the accompanying table. Use this information to calculate Neal's marginal benefit of consuming each cup of coffee. a. The marginal benefit of the first cup is $ b. The marginal benefit of the second cup is $ c. The marginal benefit of the third cup is $ d. The marginal benefit of the fourth cup is $ e. The marginal benefit of the fifth cup is $ f. Neil should consume ____ cups of coffee per day.

A. your cost of making the trip is less than $5. B. your cost of making the trip is less than $5 C. the same, framing effects

The Core Principles of Economics — End of Chapter Problem Use the cost-benefit principle to evaluate the following: a. You are about to buy a calculator for $10, and the sales-person tells you that the model you want to buy is on sale for $5 at the store's other branch, which is a 20 minute drive away. You should make the trip to the other branch if: b. You are about to buy a laptop for $1,000 and the sales-person tells you that the model you want to buy is on sale for $995 at the store's other branch, which is a 20 minute drive away. You should make the trip to the other branch if: c. Your choice in parts a and b should be ______ in both scenarios. But some people may ignore costs and focus on the percentage saved because ______ change how people view the decision.

opportunity cost principle, the length of the movie does not matter as long as watching a movie is the best way to spend your time compared to other alternatives.

Your friend remarks that longer movies are a better deal than shorter movies because the ticket price is the same in both cases. Therefore, the longer movie provides more benefit for the same cost as a shorter movie. Which of the following is the best argument against your friend's claim that longer movies provide more benefit than shorter movies? Based on the: opportunity cost principle, the length of the movie does not matter as long as watching a movie is the best way to spend your time compared to other alternatives. cost‑benefit principle, the benefits of a longer movie exceed the costs when compared to a shorter movie. marginal principle, you should only continue to watch an additional movie if it is shorter than the first movie. interdependence principle, longer movies are affected by the market for shorter movies.