Quiz chapter 1: Learning Curve: Core Principles

Raul is considering going to college for another year. He is creating a chart of the costs and benefits of this decision. He knows that tuition will cost $10,000, but he has a scholarship for $8,500. Should he decide to attend the college? How much should he put for tuition in the cost column of his chart?

$1,500

Is a virus willingness to pay for an item is $12, and the buyer purchases the item for $7, what is the buyers economic surplus?

$5

Is a buyers willingness to pay for an item is $10, and the buyer purchases the item for $8, what is the buyers economic surplus?

2

Hajra produces cups and tunics. Her production possibility frontier for a particular amount of time is displayed below. What is the opportunity cost of producing an additional cup?

2 Tunics

Deniz produces cups and bowls. Her production possibility frontier for a particular amount of time is a sweet below. What is the opportunity cost of producing an additional cup?

2 bowls

Fulton is trying to decide how many workers he should hire at his new restaurant. The table below shows Fulton's weekly cost and benefits based on the number of staff he hires. How many workers should he hire?

5

How is an increase in productivity represented on the graph of a production possibility frontier?

By the entire frontier being pushed outward

If the marginal benefit of hiring one more worker is less than the marginal cost, then, hiring an additional worker will:

Decrease economic surplus

You have to try to persuade your parents to go to your graduation because your brothers talent show is scheduled for the same time. This BEST exemplifies, which of these interdependencies?

Dependencies between people

Charlotte is studying for a psychology exam and an economics exam that are both scheduled for Monday. She would like to study three hours for each exam, but she only has five hours to study, so she must decide whether one exam grade is more important to her than the other. This exemplifies, which of these types of dependency?

Dependencies between your own choices

Making good decisions is all about maximizing:

Economic surplus

Manzo produces shirts and jeans. His production possibility frontier for a particular amount of time is displayed below. What is the opportunity cost of producing an additional shirt?

Half a pair of jeans

Matthew has been diagnosed with cancer and doctors estimate that he has roughly 5 months to live. From an economic standpoint, which BEST explains why Matthew might be more likely than a healthy person to take a risky experimental drug?

His opportunity cost is lower than that of healthy people.

Why does every choice you make affect your other decisions?

Limited resources

Whenever it is necessary to decide " how many" of something to choose, the_____ principal should be used to break the decision into a series of smaller choices.

Marginal

Which one of these questions BEST boils down the marginal principal?

One more unit?

Free cinnamon buns being given out by a bakery are not really free because the _____ of a cinnamon bun is eating something else.

Opportunity cost

You are trying to decide if you should buy a warmer coat not realize that the answer to this question will depend on whether you're taking a trip to Canada next month. Which economic principle is taken into account?

The interdependent principle

Do you have decided that you buy tacos, but you are still trying to decide how many tacos you should buy. Which economic principle are you taking into account?

The marginal principal

Nasser owns a business that produces T-shirts, but he is struggling with the dilemma of how many shirts to produce, so he begins by himself if he should produce one more shirt. Which economic principle is exemplified by this situation?

The marginal principal

When applying the opportunity cost principal, why is it important to ask,"or what?"

To determine your next best alternative

What should you do as a business owner If you want to predict the decisions that one of your competitors will make?

Use the someone else's shoes technique

How can a manager maximize the economic surplus when hiring workers?

When the marginal cost of hiring the last worker is equal to the marginal benefit

Alia has made a chart of the cost and benefits associated with buying a new car. Should she buy a new car? Why or why not?

Yes, because the benefits of buying a car I greater than the costs.

Hyunh has made a chart of the costs and benefits associated with buying a new car. Should she buy a new car? Why or why not?

Yes, because the benefits of buying a car are greater than the costs.

Salem currently rent an apartment for $800. He has made a chart of the costs and benefits associated with buying a new house. Should he buy a new house? Why, or why not?

Yes, because the benefits of buying a house are greater than the costs