Exam 1 Examples

You want to purchase two pizzas. The price is $8 per pizza, 2 for $15, 3 for $20. What will be the marginal cost of you buying a third pizza?

$5

If Switzerland can make 35 pounds of chocolate or 5 watches while Albania can make 6 pounds of chocolate or 1 watch A trade that would make both countries better off would be...

one watch for 6.5 pounds of chocolate

I am considering joining a "shopper's club", where I pay a $100 membership fee and then get a 25% discount on all my purchases. In making my decision, I should...

only join if I expect to get at least $100 worth of discounts

If you pay $2 for each ride you take on a roller coaster, and you are about to take your tenth and last ride for the day, the marginal cost of that ride is...

$2

If it costs a theater $180,000 to put on four shows and the cost would rise to $200,000 if the theater adds a fifth show, what is the marginal cost of the fifth show?

$20,000

I can cut down 4 trees or dig 12 holes in an hour. You can cut down 3 trees or dig 6 holes in an hour. The cost of one of my trees is...

3 holes

Which of the following is true of the statement "all pollution must be stopped"?

It ignores the importance of comparing marginal benefits and marginal costs, it does not consider that we may have too much pollution control, it ignores the fact that to get more of anything we must give up something else

If Switzerland can make 35 pounds of chocolate or 5 watches while Albania can make 6 pounds of chocolate or 1 watch, who has the comparative advantage?

Switzerland has the comparative advantage in chocolate; Albania in watches

Which of the following costs will you consider when deciding whether it is efficient to take a hike one afternoon? the gas it takes to get to the hiking trail the studying you won't be able to do the wear and tear on your hiking boots

all of the above

Which of the following is a substitute for gasoline? ethanol a car pool more fuel efficient cars

all of the above

If Clemson raises the price of on-campus parking, you would expect to see

an increase in the demand for off-campus parking

If you decide to go to a movie this evening rather than study economics, you thereby demonstrate that

at the margin, you value two hours of movie watching more than two hours of studying economics

the costs that influence decisions are always

marginal costs

We know that trade makes people better off because

it is a voluntary activity, people wouldn't engage in it otherwise, it only occurs when there is potential for mutual gains

If Switzerland can make 35 pounds of chocolate or 5 watches while Albania can make 6 pounds of chocolate or 1 watch a. no trade will be profitable for Switzerland. b. no trade will be profitable for Albania. c. Albania has higher opportunity costs than Switzerland. d. Switzerland has higher opportunity costs than Albania. e. None of the above.

none of the above

Anyone who claims that cheaper labor in one country enables that country to produce everything at lower costs than another country, so that no trade is possible, is

not considering opportunity costs

I can cut down 4 trees or dig 12 holes in an hour. You can cut down 3 trees or dig 6 holes in an hour. A trade that would help us both is...

one of your trees for 2.5 of my holes

If you buy a motorcycle for $1000 and then discover that you hate riding it and will never ride it again, the best thing to do is...

sell the motorcycle for the best offer you can get

I can cut down 4 trees or dig 12 holes in an hour. You can cut down 3 trees or dig 6 holes in an hour. We could both be made better off if I...

specialize in digging holes

If you are searching for a new pair of skis, it makes sense to keep looking as long as...

the shopping time matters less to you than the lower price you expect to get

if you've purchased an all you can eat ticket to a clam roast for $25, good economic thinking would tell you to take one last plateful if

the value of that plateful to you is greater than zero

If you pay $400 for a season pool pass at a private club, the marginal cost to you of swimming on any given weekday will be

zero