econ 2110 exam 1

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

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

$5

Which of the following are marginal costs associated with studying economics for an extra hour? a.The T.V. program you would otherwise have watched b.The cost of your economics textbook. c.The tuition paid for that economics class d.All of the above.

.The T.V. program you would otherwise have watched

In economics, the cost of something is a.the out-of-pocket expense of obtaining it. b.always measured in money .c.what you must give up to get it. d.always higher than people think

.c.what you must give up to get it.

A trade that can make both countries better off would be a.1 umbrella for 2 fish. b.2 umbrellas for 1 fish. c.1.5 umbrellas for 1 fish. d.No trade is possible since a smoked fish costs the same amount in each country. e.No trade is possible, because England is at least as good as Norway at producing both umbrellas and fish

1.5 umbrellas for 1 fish.**

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 marginal costs of one of my trees is

3 holes

Which the following are marginal benefits associated with studying economics for an extra hour? a.A higher grade in your economics class. b.A higher overall GPA. c.A better chance of getting a good job after graduation. d.All of the above

all of the above

If they charge you $12 for an "all you can consume" pass, how many will you consume? a.None, as it is not worth paying that price given the benefits. b.1 c.3 d.4 e.at least 5.

at least 5

i am considering joining a "shopper's club" where I pay $100 membership fee and then a twenty five percent discount on all my purchases. i making my decision, i should...

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

A good is "scarce", as economists use the term, only when a.there is less than an infinite amount of it available. b.there is less of the good available than there was in the past c.a shortage exists. d.something has to be given up to get more of it

something has to be given up to get more of it

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 better off if I...

specialize in digging holes

If you've bought an $80 sticker to park on campus, and you plan to park on campus eighty times before the semester ends, the marginal cost to you each time you park is a. $0 b. $1 c. $8 d. $80 e. Negative

$0

If a buyer values a product at $28 and a seller's opportunity cost of providing the product is $12, the gains from trade a.can't be determined without knowledge of the price. b.are $28 .c.are $12. d.are $16. e.are $40.

$16

If England can make 10 umbrellas or 5 smoked fish in a day while Norway can make 5 umbrellas or 5 smoked fish, a.England has the comparative advantage in umbrellas and Norway has it in fish. b.Norway has the comparative advantage in umbrellas and England has it in fish. c.England is better at both umbrellas and fish. d.Norway's fish cost the same amount as England's.

England has the comparative advantage in umbrellas and Norway has it in fish.

Which of the following explain my decision to go to the weight room rather than to a movie? a. I value exercising more than movie watching b. I feel better if I work out c. The marginal benefits of working out rather than going to a movie exceed the marginal costs d. I like to exercise more than I like to watch films e. all of the above

The marginal benefits of working out rather than going to a movie exceed the marginal costs

Which of the following is a resource allocation question? a.Should I have coffee or tea this afternoon? b.Should we log Yellowstone National Park or leave the land alone. c.Should we log Yellowstone National Park or mine Yellowstone National Park? d.All of the above

all of the above

The cost to a ski instructor of taking a day off a. is higher on the weekend when more people ski.** b. falls when it snows. c. rises when it rains. d. rises when there are a lot of other instructors around, so competition is intense.

a. is higher on the weekend when more people ski.

Economists use the term "opportunity cost" to highlight the fact that a.costs are really opportunities given up. b.most costs involve the opportunity to get something in return. c.every opportunity also has its cost. d.there are always opportunities to lower the cost.

a.costs are really opportunities given up.**

If we as a country decide to dedicate more resources to making meat safe a.there will be less left over to do other desirable things. b.we will have too much safety. c.we are not thinking at the margin. d.we will never face another case of e-coli poisoning.

a.there will be less left over to do other desirable things

Which of the following is not an assumption of the economic model? a.People respond to incentives. b.Goods are scarce. c.People make decisions by comparing marginal benefits and marginal costs. d.The only costs that matter are opportunity costs. e.All are assumptions of the economic model

all are assumptions of the economic model

what is a good example of a scarce good?

all goods are scarce goods

The idea that "people respond to incentives" would lead us to conclude that class attendance would rise a.if I take attendance and grade on it .b.if I give lots of surprise quizzes. c.if I offer money to students who come to class. d.All of the above

all of above

The cost of a college education includes a.tuition paid. b.textbooks purchased. c.a foregone salary at alternative employment. d.All of the above. e.Some but not all of the above.

all of the above

The cost of skipping class a.is higher the day of an exam. b.depends on how much you like the class. c.is not affected by the tuition revenue you paid. d.All of the above

all of the above

Paul decides to spend an hour playing basketball rather than studying. The tradeoff a.is nothing, because he enjoys playing basketball more than studying. b.is the benefit to his knowledge and grades he would get from studying for an hour. c.is the increase in skill he would get from playing basketball for an hour. d.only exists if he had originally planned to study, and then played basketball instead.

b.is the benefit to his knowledge and grades he would get from studying for an hour. **

The idea that "people respond to incentives" would lead us to conclude that the murder rate a.would rise if tougher penalties are enacted. b.would fall if tougher penalties are enacted. c.would be unaffected by changes in penalties, since crimes are committed in moments of passion. d.depends entirely on the level of penalties enacted.

b.would fall if tougher penalties are enacted.**

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 a. the value of that plateful to you is greater than $25 b. the value of that plateful to you is greater than or equal to $1 and you've already taken 24 platefuls that you value at $1 each .c. the value of that plateful to you is greater than zero

c. the value of that plateful to you is greater than zero

Tom is twice as good as Tim at producing widgets and three times as good as producing gadgets. Therefore, a.Tom and Tim would not benefit from trade b.Tim's cost of producing widgets is higher than his cost of producing gadgets c.Tom's cost of producing widgets is higher than Tim's cost of producing widgets d.Tim has higher opportunity costs than Tom e.There is not enough information to determine who has higher costs or if trade would be mutually beneficial.

c.Tom's cost of producing widgets is higher than Tim's cost of producing widgets

A person has a comparative advantage in an activity whenever she a.can do the activity in less time than other people b.has an absolute advantage in the activity c.can perform the activity at a lower opportunity cost than can other people d.can do everything better than anyone else e.All of the above

c.can perform the activity at a lower opportunity cost than can other people

The cost to a cinema owner of letting someone see a movie for free is a.always equal to the regular ticket price of $8.50. b.usually more than the regular ticket price of $8.50 .c.likely to be higher on a Saturday night than on a Monday night. d.always nothing if he/she owns the cinema.

c.likely to be higher on a Saturday night than on a Monday night. **

This means that dedicating more resources to making meat safer a.is a good idea. b.is a bad idea. c.may be a good or bad idea, depending on the marginal benefits and costs. d.is a rational plan.

c.may be a good or bad idea, depending on the marginal benefits and costs

If a buyer values a product at $19 and a seller' opportunity cost of selling the product is $14, the gains from trade a.can't be determined without knowledge of the price .b.are $19. c.are $14. d.are $5. e.are $33.

d. are $5

Trade between the United States and Thailand a.is a losing proposition for Thailand because U.S. workers are more productive. b.is a losing proposition for the U.S. because Thailand has cheaper labor. c.is like a sports contest: one side wins and the other side loses. d.benefits both the United States and ThailandT

d.benefits both the United States and Thailand

Someone who, when confronted by a choice, says "It's simple: do both!" a.is a high demander. b.is an inefficient supplier. c.doesn't understand opportunity cost. d.is a go-getter.

doesnt understand opportunity cost

Movie-goers who are willing to put up with long lines at a cinema to get a lower price are a. not rational b. haven't evaluated the marginal cost of the time they give up c. would give up any amount of time to save a little money d. all of the above. e. none of the above

none of the above

The economic model a.is about how money is made. b.is about how people make choices. c.assumes that people care most about money. d.assumes that people have no choices to make.

is about how people make choices.**

An article in the newspaper suggests that an Indian tribe should use coal rather than gas power because the tribe owns 114 billion tons of coal reserves. This statement a. is true because if they own the coal, they don't have to pay for it b. is false because coal is more polluting c. is false because it ignores opportunity costs d. none of the above

is false because it ignores opportunity costs

opportunity cost is ...

marginal cost, the value of the next best opportunity forgone

The costs that influence decisions to supply are always a. average costs. b. marginal costs c. sunk costs. d. total costs.

marginal costs

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 cost

If you are searching for a new pair of skis, it makes sense to keep looking as long as a.you haven't found the lowest price available. b.the shopping time matters less to you than the lower price you expect to get. c.there are stores left that you haven't checked. d.you face no opportunity costs at all. e.All of the above.

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

Which of the following is the most important advantage to a society of using money rather than relying exclusively on barter? a. The use of money encourages people to diversify and learn to do more things for themselves. b. The use of money encourages people who want to exchange to become more closely acquainted. c. The use of money lowers the cost of exchanging goods. d. The use of money reduces opportunities for fraud and theft. e. The use of money reduces selfishness because money in itself has no value.

the use of money lowers the costs of exchanging goods

The opportunity cost to college athletes on scholarship who stay in school is a.the wages they could make otherwise. b.the value of the scholarship they receive. c.nothing, unless they are good enough to turn professional. d.underestimates the value of a college education.

the wages they could make otherwise. **

In the absence of trade, what does a smoked fish cost in England? a.$2 per pound. b.There is not enough information to say. c.One of Norway's fish. d.Two of Norway's fish. e.Two umbrellas

two umbrellas

You miss the last train home on New Year's Eve. After walking for an hour, you spot a taxi. Its driver wants to charge $150 to take you home, though the ride usually costs $30. You are furious, but feel you have no other option and accept the deal. Finding the taxi a.has made you better off and the driver worse off. b.has made you worse off and the driver better off. c.has made both you and the driver better off d.has made both you and the driver worse off. e.has made the driver better off but left your well-being unchanged.

you and the driver are made better off

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 would help up both if

you trade one of your trees for 2.5 of my holes

you are considering whether to take one last ski run before going home. you paid $30 for your lift ticket, and have taken nine runs. it is only efficient for you to take the tenth run if ...

your marginal benefit is greater than 0

if you pay $400 for a seasonal pool pass at a private club, the marginal costs to you of swimming on any given weekday will be ...

zero