Econ 2120 Exam 1

You want to purchase two pizzas. The price is $8 per pizza, 2 for $15, 3 for $20. What will be the marginal cost to you of buying a third pizza?

$5

If you buy a motorcycle for $1000 and then discover that you hate riding it and will never ride it again, the best thing to do is

sell the motorcycle for the best offer you can get*

If you are searching for a new pair of skis, it makes sense to keep looking as long as

the shopping time matters less to you than the lower price you expect to get.

If you've purchased an all you can eat ticket to a clam roast for $25, good economic thinking would tell you to take one last plateful if

the value of that plateful to you is greater than zero

Which of the following costs will you consider when deciding whether it is efficient to take a hike one afternoon?

The gas it takes to get to the hiking trail: The studying you won't be able to do: The wear and tear on your hiking boots.

If you decide to go to a movie this evening rather than study economics, you thereby demonstrate that

at the margin, you value two hours of movie watching more than two hours of studying economics

If you pay $2 for each ride you take on a roller coaster, and you are about to take your tenth and last ride for the day, the marginal cost of that ride is

$2

Which of the following is true of the statement "All pollution must be stopped"

It ignores the importance of comparing marginal benefits and marginal costs: It does not consider that we may have too much pollution control: It ignores the fact that to get more of anything, we must give up something else

If Switzerland can make 35 pounds of chocolate or 5 watches while Albania can make 6 pounds of chocolate or 1 watch, who has the comparative advantage?

Switzerland has the comparative advantage in chocolate; Albania in watches

If Clemson raises the price of on-campus parking, you would expect to see

an increase in the demand for off-campus parking

Smith accidentally runs his car off the road into deep snow. Jones happens along in a tow truck, and offers to haul Smith out for the outrageous price of $300. Smith, though angered by the high price, considers he has no choice and pays the $300. Smith's welfare was _________ and Jones' was ________ as a result of Jones passing by

enhanced, enhanced.

Which of the following is a substitute for gasoline

ethanol: a car pool: more fuel efficient cars

We know that trade makes people better off because

it is a voluntary activity: people wouldn't engage in it otherwise: it only occurs when there is the potential for mutual gains.

The costs that influence decisions are always

marginal costs

If Switzerland can make 35 pounds of chocolate or 5 watches while Albania can make 6 pounds of chocolate or 1 watch

no correct answer

Anyone who claims that cheaper labor in one country enables that country to produce everything at lower costs than another country, so that no trade is possible, is

not considering opportunity cost.

A trade that can make both countries better off would be

one watch for 6.5 pounds of chocolate

I am considering joining a "shopper's club", where I pay $100 membership fee and then get a twenty-five percent discount on all my purchases. In making my decision, I should

only join if I expect to get at least $100 worth of discounts

If it costs a theater $180,000 to put on four shows, and the cost would rise to $200,000 if the theater adds a fifth show,

the marginal cost of the fifth show is $20,000

If you pay $400 for a season pool pass at a private club, the marginal cost to you of swimming on any given weekday will be

zero