ECO2023 final exam

Suppose that a store sells candy bars for $0.89 for one and $1.50 for two. The marginal cost of the second candy bar is:

$0.61

Employers give stock options to full-time employees who have been on the job more than three years. This is an example of:

people following incentives.

Tim woke up this morning with a stomachache and decided to skip class in order to get more rest. What is the opportunity cost of Tim's decision to sleep in?

the value of attending the class he decided to miss.

Resources are:

Unlimited, but wants are limited.

If you were not studying economics, you could be doing one of the following: sleeping in (which you value at $5), playing cards with your friends (which you value at $10), or working (you would have earned an extra $8). The opportunity cost of studying economics is therefore:

$10

Rational behavior requires thinking at the margin. Which example represents this type of thinking?

All of these examples represent thinking at the margin.

Which statement does NOT involve thinking at the margin?

I worked eight hours today.

When economists use the word "additional", they generally mean:

Marginal.

Which question would be considered a normative question?

Should obstacle races be regulated to ensure the safety of its participants?

When economists assume people make rational decisions, it means that:

a rational person will respond to the benefits and costs associated with incentives.

Marginal analysis would put an emphasis on:

additional costs and benefits.

_____ people are forced to make tradeoffs.

all.

Paying a salesperson more for increased sales is an example of:

an incentive.

Which factor which of the demand curve for gasoline to the right?

an increase in national income.

Suppose Mike has three hours of time to spend so he ranks the following activities in order of priority: (1) see a movie, (2) attend a ball game, (3) study economics. Assume that each activity takes three hours. What is Mike's opportunity cost of seeing the movie?

attending a ball game.

The opportunity cost of undertaking an activity is defined as the:

benefit forgone by not undertaking the next-best activity.

Economics is a social science that involves the study of how individuals, firms, and societies:

choose among alternatives to satisfy their unlimited wants.

When a large factory closed in the town of Greenville, income fell for many residents. As a result, demand for a normal goods would _____ and demand for inferior goods would _____:

decrease;increase.

In the market for Chinese take-out, suppose that the price of sushi take-out, a substitute, decreases in price. What will happen to the demand for Chinese take-out?

demand for Chinese takeout will decrease.

_____ is how well resources are used and allocated.

efficiency.

_____ is the fairness of various issues and policies.

equity.

Students who never miss class and study hard generally earn higher grades than those who do not. This is an example of:

incentives.

Opportunity costs:

influence all economic decisions.

The study of economics:

is about peoples decisions regarding their use of scarce resources.

You will take the day off work if:

marginal costs are less than marginal benefits.

The supply curve represents the _____ price at which a firm is willing to _____.

minimum; sell various quantities of a good.

The highest valued alternative that is forgone when you choose an action is called its:

opportunity cost.

_____ costs include the time and money that could have been spent on another highly valued activity.

opportunity.

The law of supply stares that as prices _____, the quantity _____.

rise;supplied rises.

Which question is NOT and example involving marginal analysis?

should K-Mart rebrand all its stores to using the Sears name?

A good is a normal good if:

the demand curve shifts outward if income increases.

Heading your snooze alarm before you get out of bed is an example of:

thinking at the margin.

Scarcity is BEST defined as when:

unlimited wants exceed limited resources.

Because of scarcity:

we face tradeoffs in nearly every choice we make.

Thinking at the margin involves:

weighing the impact of one additional activity.