Al-Hamdi Microeconomics HW 1-4

Lionel's Lawn Care is a company that maintains residential yards. Lionel's cost for his standard package of mowing, edging, and trimming is $15, and he charges $25 for this service. For a total price of $40, Lionel will also trim shrubs, a service that adds an additional $10 to the total cost of the standard package. What is Lionel's marginal cost of adding the shrub-trimming service to the standard package? A) $10 B) $15 C) $25 D) $40

A

Scarcity refers to the situation in which: A) Unlimited wants exceed limited resources B) Unlimited resources exceed limited wants C) A country's population is larger than its resource base D) A nation's poverty level increases faster than its population

A

The branch of economics which studies how households and firms make choices, interact in markets, and how government attempts to influence their choices is called A) Macroeconomics B) Microeconomics C) Positive economics D) Normative economics

B

Every society faces economic trade-offs. This means: A) Some people live better than others do B) Not everyone can have enough goods to survive C) Producing more of one good means less of another good can be produced D) Society's output cannot be made available to all

C

Economics promotes which of the following as the way to make the best decision? A) Continue an enjoyable activity as long as you do not have to pay for it B) Continue an enjoyable activity until it is no longer enjoyable C) Continue an enjoyable activity until you cannot afford to pursue it D) Continue an enjoyable activity up to the point where its marginal benefit equals its marginal cost

D

Economists assume that rational people: A) Never use all available information as they act to achieve their goals B) Undertake activities that benefit others and hurt themselves C) Only weigh the benefits and costs of the most desirable alternative goals D) Respond to economic incentives

D