Econ Micro CH 1

B

Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when A. marginal benefit is maximized. B. marginal benefit equals marginal cost. C. marginal cost is zero. D. marginal benefit is greater than marginal cost.

B

Hulu has just decided to offer premium online streaming without ads for​ $11.99 per month. Such a service will result in a loss of advertising revenue and further risk cannibalizing their existing customers who pay​ $7.99 per month for the same service with ads. As a​ result, A. Hulu failed to optimize correctly in evaluating the costs and benefits of its decision. B. ​Hulu, using all of the available information that it​ had, must believe that the additional revenue that it will receive from the new service outweighs the potential loss of ad and other revenue. C. ​Hulu's decision was irrational. D. the opporunity cost of​ Hulu's decision must outweigh the benefits of the decision.

D

One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls A. the market. B. economics. C. rationality. D. scarcity.

B

Opportunity cost is A. when unlimited wants exceed the limited resources available to fulfill those wants. B. the highest valued alternative that must be give up to engage in an activity. C. the idea that because of​ scarcity, producing more of one good or service means producing less of another good or service. D. when consumers and firms use all available information as they act to achieve their goals.

E

Suppose, in an effort to prevent the population from​ declining, Italy begins offering new mothers extended periods of paid family leave from work​ and, consequently, the birthrate per woman increases. If​ so, then this could best be characterized as an example of people responding to A. compassion. B. religious beliefs. C. accounting principles. D. envy. E. economic incentives.

C

The article entitled​ "My Drug​ Probem" best reflects the economic idea that A. government health​ programs, such as​ Pharmac, do not have to make decisions or choices regarding the availability​ and/or distribution of medical treartments and drugs to its citizens. B. government agencies such as​ Pharmac, like private drug​ companies, attempt to maximaize the revenue that they receive from selling drugs. C. scarcity implies competition over resources which implies that every society has to establish rules that ration the available or potential goods and services among its citizens D. markets are always the best way to allocate resources

D

Trade-offs force society to make​ choices, particularly when answering the following three fundamental​ questions: A. ​One, what goods and services will be produced​ domestically? Two, how will the goods and services be​ produced? Three, is the distribution of goods and services​ fair? B. ​One, what goods and services will be produced in foreign​ countries? Two, who will produce the goods and​ services? Three, who will receive the goods and services​ produced? C. ​One, what goods and services will be​ produced? Two, how will the goods and services be​ produced? Three, is the distribution of goods and services​ fair? D. ​One, what goods and services will be​ produced? Two, how will the goods and services be​ produced? Three, who will receive the goods and services​ produced?

C A

What do economists mean by the word​ "marginal"? A. unimportant B. first C. extra or additional D. small Economists believe that an activity should be continued up to the point where A. the marginal benefit from the activity is equal to the marginal cost. B. the marginal benefit from the activity plus the marginal cost equals zero. C. the marginal benefit from the activity is less than the marginal cost. D. the marginal benefit from the activity is greater than the marginal cost.

D

Which of the following is a positive economic​ statement? A. The government should mandate electric automobiles. B. Foreign workers should not be allowed to work for lower wages than the citizens of a country. C. People should not buy SUVs. D. Scarcity necessitates that people make trade−offs.

Economics

is the study of the choices people make to attain their​ goals, given their scarce resources.