Principles of Microeconmics

A consumer's willingness to pay depends on a) the benefit that he or she expects to receive from consuming the good or service. b) the cost of producing the good or service. c) the size of the shortage of the good or service. d) the size of the surplus of the good or service.

a) the benefit that he or she expects to receive from consuming the good or service

Microeconomics deals with: a) the study of individuals and firms and their decisions making, rather than the economy as a whole b) how the overall inflation rate in the economy is determined. c) overall U.S. statistics such as Gross Domestic Product d) how changes in the overall amount of money in the economy affects the overall price level.

a) the study of individuals and firms and their decisions making, rather than the economy as a whole

Scarcity in economics means: a) there must be poor people in rich countries b) economists are clearly not doing their jobs c) not having sufficient resources to produce all the gods and service we want d) the wants of people are limited

c) not having sufficient resources to produce all the gods and service we want

The cost of going to college is: a) tuition and the cost of housing. b) forgone income only. c) tuition, the cost of housing, the cost of books, and forgone income. d) tuition, the cost of housing, and the cost of books.

c) tuition, the cost of housing, the cost of books, and forgone income

A friend comes up to you and offers to give you a free ticket to the local professional team's baseball game that night. You decide to attend the game. It takes five hours to go to the game and costs you $15 for transportation. If you had not attended the game, you would have worked at your part-time job for $8 an hour. What is the cost of you attending the game? a) $65 b) zero - The ticket is free c) $40 d)$55

d)$55

A tradeoff between equity and efficiency may exist because: a) allocating resources fairly may cause inefficiency. b) policies that promote equity often come at a cost of decreased efficiency. c) an efficient allocation of resources may lead to an outcome that most people consider unfair. d) of all of the above.

of all of the above

We can measure total consumer surplus for good X as: a) the area above the demand curve for X and below the price of X. b) the area above the supply curve for X. c) the area bounded by the demand curve for X and the two axes. d) the sum of the individual consumer surpluses for all buyers of X.

the sum of the individual consumer surpluses for all buyers of X.

For an economist, the cost of something is : a) always equal to its market value b) what you gave up to get it c) the quantity of resources used to produce it d) the amount of money you paid for it

what you gave up to get it

The best measure of the opportunity cost of any choice is: a) the cost associated with not taking full advantage of the opportunity offered by that choice b) none of the above c) whatever you have given up to make that choice , even if no monetary costs are involved d) the monetary cost of that choice

whatever you have given up to make that choice , even if no monetary costs are involved

Suppose that for for a PA resident, tuition and fees at IUP is $9,600 per year and room and board is $11,000 per year. Furthermore, assume that textbooks cost $800 per year. If the average high-school grad could earn $25,000 per year if he/she worked full time (and therefore could not go to school), what is the total explicit cost of attending IUP for one year? a) 9,600 b) 20,600 c)21,400 d)46,400

21,400

Suppose that for for a PA resident, tuition and fees at IUP is $9,600 per year and room and board is $11,000 per year. Furthermore, assume that textbooks cost $800 per year. If the average high-school grad could earn $25,000 per year if he/she worked full time (and therefore could not go to school), what is the total cost of attending IUP for one year? a) 9,600 b) 20,600 c)21,400 d)46,400

46,400

The consumers' willingness to pay for a good is used to derive the __________ for that good. a) demand curve b) supply curve c) cost of production d) producer surplus

demand curve