Quiz 1 Econ
According to the Cost-Benefit Principle, you should go to see the latest Star Wars movie with your friends this week-end if: A the extra benefits of seeing the movie are greater than the extra costs of seeing the movie. B you really like Star Wars. C you can afford to go to the movies. D the average
A
Alex received a four-year scholarship to State U that covered tuition and fees, room and board, and books and supplies. If Alex becomes a full-time student, then: A the opportunity cost of attending State U includes the money Alex could have earned working for four years. B attending State U for four years is costless for Alex. C Alex has no incentive to study hard while at State U D the opportunity cost of attending State U includes the sum of the benefits Alex would have had from attending each of the other schools to which he was admitted.
A
Dean should play golf instead of preparing for tomorrow's exam in economics if: A the economic surplus from playing golf is greater than the economic surplus from studying. B he is irrational. C the benefit of golfing is greater than the benefit of studying. D Dean can play golf for free.
A
Due to the fact that Curly used his frequent flyer miles to fly to visit Moe, Curly told Moe that it didn't cost him anything to visit. Is Curly correct? A No, because Curly could have used his frequent flyer miles to go somewhere else instead. B Yes, because Curly's frequent flyer miles made the trip free. C Yes, because Curly could stay at Moe's house for free. D No, because Curly had to pay for earlier trips in order to earn the frequent flyer miles.
A
If individuals are rational, they should choose actions that yield the: A largest economic surplus. B largest total benefits. C smallest total costs. D smallest economic surplus.
A
Jack has a ticket to see Bo Bice for which he paid $30 yesterday. He takes an unpaid day off from work to get ready for the concert. When he arrives at the concert, five different people offer him $70 for his ticket. Jack decides to keep his ticket. At the time he makes this decision, his opportunity cost of seeing Bo Bice is: A $70 B $30 plus his forgone earnings. C $40. D $70 plus his forgone earnings.
A
Larry was accepted at three different graduate schools, and must choose one. Elite U costs $50,000 per year and did not offer Larry any financial aid. Larry values attending Elite U at $60,000 per year. State College costs $30,000 per year, and offered Larry an annual 10,000 scholarship. Larry values attending State College at $40,000 per year. NoName U costs $20,000 per year, and offered Larry a full $20,000 annual scholarship. Larry values attending NoName at $15,000 per year. Larry's opportunity cost of attending State College is: A $35,000 B $30,000 C $20,000 D $15,000
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Matt has decided to purchase his textbooks for the semester. His options are to purchase the books online with next day delivery at a cost of $175, or to drive to campus tomorrow to buy the books at the university bookstore at a cost of $170. Last week he drove to campus to buy a concert ticket because they offered 25 percent off the regular price of $16. Assume the minimum that Matt would be willing to accept to drive to campus is equal to the $4 he saved on the concert ticket. What would his economic surplus be if he bought his textbooks at the university bookstore rather than online? A $1 B $5 C $50 D $20
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One thing that distinguishes normative economic principles from positive economic principles is that: A normative principles tell us how people should behave, and positive principles tell us how people will behave. B normative principles are pessimistic and positive principles are optimistic. C normative principles reflect social norms, and positive principles reflect universal truths. D normative principles tell us how people will behave, and positive principles tell us how people should behave.
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Refer to the table below. The marginal cost of the 3rd unit of this activity is: A $20 B $30 C $25 D $10
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Suppose that the extra cost to Tim of a third glass of soda is zero because he's at a restaurant that gives free refills. According to the Cost-Benefit Principle Tim should: A drink a third glass of soda if the extra benefit of doing so is positive. B drink a third glass of soda. C drink a third glass of soda if his total benefit from drinking soda is positive. D not drink a third glass of soda.
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Suppose the total benefit of watching 1 baseball game is 100, the total benefit of watching 2 games is 120, and the total benefit of watching 3 games is 125. In this case, the marginal benefit of watching the 3rd game is: A 5 B 125 C 41.67 D 375
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The Scarcity Principle states that: A with limited resources, having more of one thing means having less of another. B people don't have enough money to buy what they want. C society will eventually run out of resources. D some countries have fewer resources than others.
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The average benefit of n units of an activity is the: A total benefit of n units divided by n. B n divided by the total benefit of n units. C n times the total benefit of n units. D extra benefit from carrying out one additional unit of the activity.
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The extra benefit that results from carrying out one additional unit of an activity is the ______ of the activity. A marginal benefit B total benefit C average benefit D economic benefit
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The following table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase. The total benefit of a 3.0GHz computer is: A $1,700. B $300. C $900. D $1,650.
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The table below shows how total donations, average donations, total labor costs and average labor costs vary depending on the number of employees State U hires for its fundraising activities. The Chair of the Economics Department at State U says that fundraising employees should be hired as long as their marginal benefit exceeds their marginal cost. If the University follows this advice, then ______ employee(s) will hired, and the net benefit (total donations minus total labor costs) will be ______. A 2; $25,426 B 1; $22,000 C 3; $25,426 D 2; $3,476
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Which branch of economics is most likely to study differences in countries' growth rates? A macroeconomics B microeconomics C normative economics D experimental economics
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You save $10 on gas every week because you take the bus to school. You have class 5 days a week. What is your average benefit per day of taking the bus to school? A $2 B $10 C $5 D $0
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Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfares are $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfares are $450. If the Chicago-Atlanta round-trip air fare were $350, should you use the coupon to go to Miami? A Yes, your economic surplus would be $50. B No, your economic surplus would be -$50. C No, your economic surplus would be -$100. D Yes, your economic surplus would be $400.
A
