Econ Ch. 2 Quiz

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is

$44

Refer to table 2-1. A student has only a few hours to prepare for two different exams tomorrow morning. The above table shows alternative possible exam outcomes with three alternative uses of the student's time. The opportunity cost of scoring an 84 on the history exam rather than a 76 is

7 points on the economics exam

Refer to Figure 2-2. When the economy moves from Point A to Point B in the diagram above

All of the above occur

Refer to figure 2-1. An economy is operating at full employment, and then workers in the bread industry are laid off. This change is portrayed in the movement from

C to F

Marginal thinking is best demonstrated by

Choosing to spend one more hour studying economics because you think the improvement in your score on the next quiz will be worth the sacrifice of time

The law of _____ explains why people and societies rarely make all-or-nothing choices

Diminishing marginal utility

The opportunity cost of an action

Is a subjective valuation that can be determined only by the individual who chooses the action

Refer to figure 2-2. At Point A in the production possibilities graph shown above, the economy

Is not using its resources efficiently

Scarcity implies that

It is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available

Economists refer to this pattern, the ______, which means that as a person receives more of a good, the additional or marginal utility from each additional unit of the good declines

Law of diminishing marginal utility

Most choices involve ______, which involves comparing the benefits and costs of choosing a little more or a little less of a good

Marginal analysis

The marginal benefit of a slice of pizza is the

Maximum amount that a consumer is willing to pay for the slice

In many cases, it is reasonable to refer to the _______ as the price

Opportunity cost

Why is there scarcity

Because our unlimited wants exceed our limited resources

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the ______, sometimes also called the opportunity set, a diagram which shows what choices are possible

Budget constraint

The slope of the _____ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good

Budget constraint

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the budget constraint, sometimes also called the _____, a diagram which shows what choices are possible

Opportunity set

Philosophers draw a distinction between ______, which describes the world as it is, and normative statements, which describe how the world should be

Positive statements

The lesson of ____ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options

Sunk costs

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is

The benefit to his grades from studying for an hour

The opportunity cost of attending university is likely to include all except which of the following

The cost of haircuts received during the school term

As depicted in ______, it is necessary to give up some of one good to gain more of the other good

The production possibilities frontier

Scarcity exists because of

Unlimited wants and limited resources

In deciding how many hours to work, Beulah will make a choice that maximizes her _____; that is, she will choose according to her preferences for leisure time and income

Utility

The general pattern that consumption of the first few units of any good tends to bring a higher level of _____ to a person than consumption of later units is a common pattern

Utility