econ exam 1
Determine whether the following statements better describe optimization using total value or optimization using marginal analysis. John is attempting to decide on a movie. (All movies have the same ticket price and play at the same time/location.) He determines that the new Batman movie is preferred to the new Spider-Man movie and that both the Batman and Spider-Man movies are preferred to the new Superman movie. A. Optimization using marginal analysis, since he is calculating the change in net benefits between alternatives. B. Both types of optimization, since he is not considering the net benefits of alternatives. C. Neither type of optimization, since he is considering the total benefits of alternative. D. Optimization using total value, since he is comparing the net benefits between alternatives.
A
Making Choices by selecting the best feasible option, given the available information, is refered to as A. Optimization B. Imposition C. Delegation D. Actualization
A
Optimization is the process that describes A. choices that people make B. How to obtain relevant data C. the production of resources D. The budgeting process for people
A
There is a proverb "anything worth doing is worth doing well." Do you think an economist would agree with this proverb? A. No, because the marginal cost of extra effort may be greater than the marginal benefit. B. Yes, because doing something to the best of your ability is optimizing behavior. C. No, because the total net benefit of extra effort is negative by definition. D. Yes, because the marginal benefit of extra effort is typically decreasing as effort increases.
A
Among a set of alternatives with the same benefits, an individual is said to optimize if she chooses an alternative that: A. has the highest total cost B. has the lowest total cost C. has the highest indirect cost D. has the lowest opportunity cost
B
The techniques of optimization using total value and optimization using marginal analysis A. may provide different answers when comparing the same set of alternatives B. provide identical answers when comparing the same set of alternatives C. compare only the costs and ignore the benefits of the alternatives D. cannot be used to compare the same set of alternatives.
B
Which of the following statements identifies a similarity between optimization using total value and using marginal analysis? A. Both evaluate the total net benefit of different alternatives to arrive at a decision B. both require the conversion of all costs and benefits into a common unit of measurement C, both consider only the costs of the different alternatives D. both consider only the total benefits of different alternatives
B?
Optimization can be achieved using either of two techniques of cost-benefit analysis. Which of the following correctly identifies the techniques? A. Optimization in revenues and optimization using costs B. optimization using total value and optimization using profits C. optimization using total value and optimization using marginal analysis. D optimization using marginal analysis and optimization using costs
C
Since optimization is used to analyze people's choices and help them improve the outcomes of their choices, its A. both normative and positive. B. normative only. C. positive only. D. Neither because it does not show people who don't optimize how to improve their well-being.
C
Determine whether the following statements better describe optimization using total value or optimization using marginal analysis. Nikki decided to jog 3 miles for exercise by reasoning that a 3-mile jog was better than either a 2-mile jog or a 4-mile jog. A. Neither type of optimization, since she is not considering the total benefits of alternatives. B. Both types of optimization, since she is considering the net benefits of alternatives C. Optimization using total value, since she is making marginal comparisons. D. Optimization using marginal analysis, since she is calculating the difference in net benefits between alternatives.
D
Does the principle of optimization imply that people always make the best choices? A. Yes, because people make perfect calculations. B. No, because people do not have full information. C. No, because people are irrational. D. Yes, it is a good approximation for the decisions people make.
D
Optimization in levels examines ___________, while optimization in differences analyzes ____________. A. total bet benefits of the feasible alternatives; the total net benefits of infeasible alternatives B. total benefits of alternatives; total costs of alternatives C. total benefits of alternatives; net benefits of alternatives D. Total net benefits of alternatives; change in net benefits
D
Advances in wireless communication technology reduce the non-financial costs of long commutes: People who ride trains can get work done, and people who drive cars have more entertainment options. Given this information, which of the following will be an effect on the geographic area of cities?
D. People will be less willing to pay for these apartments since the opportunity cost of the commute time from outside the city is decreasing. This makes the more affordable housing outside the city more attractive to people.
