ECON Test

Choosing to study for an exam until the extra benefit (e.g., improved score) equals the extra cost (e.g., the value of forgone activities) is

an application of the Cost-Benefit Principle.

If a person takes an action if, and only if, the extra benefits from taking that action are at least as great as the extra costs, then that person is

following the Cost-Benefit Principle.

Economics is best defined as the study of

how people make choices in the face of scarcity and the implications of those choices for society as a whole.

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

people would still have to make trade-offs.Correct

The opportunity cost of an activity includes the value of

the next-best alternative that must be forgone.

Whether studying the output of the U.S. economy or how many classes a student will take, a unifying concept is that

wants are unlimited and resources are scarce, so trade-offs have to be made.

Janie must choose to either mow the lawn or wash clothes. If she mows the lawn, she will earn $30, and if she washes clothes, she will earn $45. She dislikes both tasks equally and they both take the same amount of time. Janie will therefore choose to ______ because it generates a ______ economic surplus.

wash clothes; bigger