Econ 011
Cost-Benefit Analysis
A calculation that adds up costs and benefits using a common unit of measurement, like dollars
A budget constraint represents _________. A. the bundles of goods or activities that a consumer can choose given her limited budget. B. the maximum amount of spending the federal government is allowed to do by law. C. the total amount of income a family earns from all sources. D. any actions taken by government officials to limit the amount of government spending.
A. the bundles of goods or activities that a consumer can choose given her limited budget. Your answer is correct.
In which of the following areas will taking an economics course help benefit you throughout your life? A. It will instill the concept that what activity is given up by a decision plays an important role when making choices. B. It will help you analyze and predict human behavior in a variety of situations. C. It will give you the logic behind using cost-benefit analysis when evaluating decisions. D. All of the above.
D. All of the above.
Which of the following would be considered a scarce resource for producers? A. High−skill labor. B. Natural resources for productionNatural resources for production. C. Equipment and tools D. All of the above.
D. All of the above.
Empiricism describes a situation where
Economists use data to analyze what is happening in the world.
Equilibrium describes a situation where
No one would benefit from changing his or her behavior.
Opportunity cost
The best alternative use of a resource
Which of the following is more susceptible to the free-rider problem: state parksstate parks or city minus wide pest controlcity−wide pest control? a. Use of city minus wide pest controlcity−wide pest control is more susceptible since even those who don't pay taxes still benefit, while state parksstate parks can charge for admissionadmission, so that everyone who goes pays their share. b.State parks, since admissionadmission cannot be denied to anyone so everyone benefits, while city minus wide pest controlcity−wide pest control only benefit a small number of people at any given time. c. Both are equally susceptible to the free-rider problem. d. Neither are susceptible to the free-rider problem.
a. Use of city minus wide pest controlcity−wide pest control is more susceptible since even those who don't pay taxes still benefit, while state parksstate parks can charge for admissionadmission, so that everyone who goes pays their share.
A surge in cocoa prices is ______ and a pest attack on the cocoa crop is _______
an effect; the cause
Lower infant mortality is ______ and an improvement in nutrition is ______
an effect; the cause
Since the inputs used to produce goods are scarce, the total amount produced of most goods is _______ the amount that consumers would like to buy. To allocate the goods produced to the people who value them the most, we use ________
below; the price mechanism
Suppose there are three activities in which you could participate: 1. The opportunity cost of the first activity is missing 3 hours of work. 2. The opportunity cost of the second activity is missing a concert that you have tickets to. 3. The opportunity cost of the third activity is missing the afternoon nap that you take every day. Given this information, for which of these activities would you be able to compare opportunity costs? A. You can compare all the activities after you translate all the missed activities into dollar amounts. Your answer is correct.B. You can only compare activities 1 and 2, since they can both be easily stated in terms of dollars forgone. C. You can only compare activities 1 and 3, since they both relate to an amount of time that is lost. D. You cannot compare any of these opportunity costs, since they each are measured in different units.
A. You can compare all the activities after you translate all the missed activities into dollar amounts.
Which of the following is subject to the free-rider problem? a. Public libraries b. A neighborhood watch c. National security d. All of the above
All of the above
Free riding
Occurs when people's private benefits are out of sync with the public interest
Optimization describes a situation where
People weigh costs and benefits when making a decision.
if you increase the amount of one type of good that you buy, you must ______ the amount of the other good that you buy. Therefore, a budget constraint implies that the consumer faces ________.
decrease; trade-offs
The concept of opportunity cost is a measure of _________.
the value of the best alternative use of a resource.