ECON

Don would like to go to college. He is qualified to get a job that pays $25,000 per year. If he goes to college, tuition, books and other things, such as transportation and supplies, that are directly related to attending college will cost $15,000 per year for a two-year period. Assuming he cannot work while attending, the opportunity cost of his diploma is.

$80,000

Three steps to smart choices

1. Choose only when additional benefits are greater than additional opportunity costs 2. Count only additional benefits and additional opportunity costs 3. Be sure to count all additional benefits and costs, including implicit costs and externalities

The problem of scarcity A. Arises because of limited time, money and curiosity B. Arises because of limited time, money and energy C. Would disappear if we did not have to make choices D. Arises because the limited human expectations cannot be satisfied with available knowledge

B. Arises because of limited, time , money and energy

Inputs of an economy are A. Positive externalities B. Used in making negative statements C. The productive resources used to produce products and services D. A part of the economy such as the government and markets

C. The productive resources used to produce products and services

Opportunity cost A. Is. A particular case of comparative advantage B. Can only be measured when there is a money payment C. is the cost of the best alternative given up D. Is only relevant in personal choices

C. is the cost of the best alternative given up

Which statement about substitutes is true? A. If you buy a product that has no substitutes your marginal benefit must be zero B. Substitutes must be the same product as the product you want C. You are usually willing to pay more for a product with no close substitutes D. All of the above

C. you are usually willing to pay more for a product with no close substitutes

Which statement best describes preferences? A. Most people use sunscreen B. Sunscreen prevents sunburn C. A business sells sunscreen D. I want a hamburger because I am hungry.

D. I want a hamburger because I am hungry

The opportunity cost for you to attend college A.is greater than money cost B. Depends on the benefits to college C. Is not affected by what you could earn if you did not go to college D. Might be described as the income you could have earned at a full time job

D. Might be described as the income

The marginal benefit of eating a tofu burger depends on whether or not A. The diamond/water paradox is relevant to your choice B. You have any money C. You are paying for it D. You are a vegetarian

D. You are a vegetarian

Which statement about the term demand is true? A. Demand describes a consumer's willingness and ability to pay for a particular product or service B. Your demand for a product or service depends on your preference, but not on your income C. Demand refers to a consumer's need for a particular product or service D. all of the above are true

A. Demand describes a consumer's willingness and ability to pay for a particular product or service

Because you can never satisfy all of your wants, making the most out of your life requires A. Smart choices about what to go after and what to give up B. That your opportunity cost is lower than gains from trade C. That you set low goals D. Finding someone who can satisfy the wants that you can't satisfy

A. Smart choices about what to go after and what to give up

What most influences how much you are willing to give up for your preferred choice A. Your alternative choices B. Your marital status C. The current date D. Your age

A. Your alternative choices

Which of the following statements about scarcity is true? A. Scarcity is a problem only for idealistic people B. Every person faces scarcity C. Scarcity is only a problem for countries that do not rely on markets to organize economic activity D. All of the above

B. Every person faces scarcity

The circular flow diagram of economic life shows A. The importance of absolute advantage B. Governments that set rules of the game and can choose to interact in any aspect of the economy C. Output markets where businesses are buyers and households are sellers

B. Governments that set rules of the game can choose to interact in any aspect of the economy

In making a smart choice A. When the benefits are less than the opportunity costs, you should lower the opportunity costs B. The value of what you get must be greater than the value of what you give up C. When the value of what you give up is greater than the value of what you get, you should raise the value of what you get D. The opportunity costs must outweigh the benefits

B. The value of what you get must be greater than the value of what you give up

What you can afford is limited by A. Available substitutes B. Your time C. Your preferences D. the law of demand

B. Your time

The main implication of scarcity in economics is that? A. People must not be selfish B. Opportunity cost beats money cost C. People must make choices D. People must be unhappy

C. People must make choices

Voluntary Trade A. Is a zero - sum game B. results in each trader specializing in the product where they have higher opportunity cost C. Results in each person feeling that what they get is of greater value than what they give up D. Is none of the above

C. Results in each person feeling that what they get is of greater value than what they give up

The players in the circular flow diagram of economics of life include

Households, businesses, and the government

Implicit cost are

Opportunity costs of investing your own money or time