1.1 Economic Foundations Quiz
Suppose this Friday you have the option to go either to a Meek Mill or Future concert. You won a free ticket to see Meek Mill. You would pay as much as $200 to see Future perform, but tickets to his show cost $100. Assume that you end up going to the Meek Mill concert. Since you went to the Meek Mill concert, you would have been willing to pay at least $_______ to see his show.
$100
You are ordering $40 worth of athletic clothes for yourself online. There's a standard shipping cost of $10, but the website advertises that orders of $45 or more ship for free. The free shipping offer is an example of the company applying which economic foundation?
Incentives matter
Are the following questions microeconomic issues or macroeconomic issues?
What happens to prices when the government increases the money supply in the US Macroeconomics Why does the unemployment rate increase during a recession? Macroeconomics How much will the economy grow next year? Macroeconomics Why does the price of gas increase in the summer? Microeconomics Should the government pass a jobs bill to stimulate the economy? Macroeconomics How does Samsung decide how many Galaxy S9 phones to produce? Microeconomics What company's stock is a good investment for me? Microeconomics Why do economics majors earn more than marketing majors? Microeconomics
You are feeling full after having a big dinner, but you are considering having a bowl of ice cream for dessert. You should choose to eat the ice cream if:
the marginal benefit of having a bowl of ice cream outweighs the marginal cost
Larry has two options this weekend. He could work at his job at Target and earn $10 per hour for three hours, or he could go to a concert for those three hours. A ticket to the concert costs $50. What is the total cost of attending the concert?
$80
Buying and selling textbooks are separate decisions made at the margin. Textbooks create value when they are bought and when they are sold after a class. Suppose you paid $38.50 to buy the physical copy of the textbook for this course, but you would have been willing to pay up to $50 to use the physical copy of the book for the semester. At the end of the semester, you could keep the textbook or sell it back to the bookstore for $25. After the class is over, the book is only worth $10 to you. How much total value have you gained from buying the book at the beginning of the semester, and reselling the book at the bookstore at the end of the semester?
26.5
Evan spent 8 hours studying for his economics exam and he earned an A on the exam. Normally, he would have spent that time watching Netflix instead of studying. Evan figures he could have made a B after studying for only 4 hours, but he really wanted that A. What is Evan's marginal cost in terms of Netflix time to move from a B to an A on his economics exam?
4
Suppose Shelly is buying bananas for a price of $0.25 per banana. She decides that she would like to purchase 3 bananas, but not a 4th. Which of the economic foundations illustrates Shelly's decision to purchase the 3rd, but not the 4th banana?
Make decisions at the margin
Identify whether the following incentives are positive or negative
The government offers tax credits for donating to recognized categories Positive A reward is offered for the return of a lost item Positive The government taxes cigarette sales Negative Your teacher offers you extra credit for attending an event outside of class Positive A parking ticket given for parking in a no-parking zone Negative Your teacher has an attendance policy that lowers your grade if you miss more than 2 classes Negative
The opportunity cost of attending college is likely to be highest for the person
who can immediately take over a family business
