Econ Chapter 1 Learning Curve

If the marginal benefit of hiring an extra worker exceeds the marginal cost of the worker, then hiring the worker will boost the total benefit:

more than it boosts total cost.

Your willingness to pay for a pair of jeans is $50. According to the cost-benefit principle, when should you avoid buying a pair of jeans and instead opt to keep your money?

when the price of the jeans exceeds $50

In order to convert nonfinancial costs or benefits into their monetary equivalent, assess your:

willingness to pay.

You make a macramé wall hanging for $30 and sell it to a customer for $50. What is your economic surplus associated with the transaction?

$20

Which of these BEST explains why there is no decision that does not have associated costs?

Every choice you make causes you to give up doing something else.

Matthew has been diagnosed with cancer and doctors estimate that he has roughly 5 months to live. From an economic standpoint, which BEST explains why Matthew might be more likely than a healthy person to take a risky experimental drug?

His opportunity cost is lower than that of healthy people.

Which one of these questions can be simplified further by applying the marginal principle?

How many workers should I hire?

What happens to the production possibility frontier when a technique is discovered that allows more outputs to be produced with the same amount of inputs?

It expands outward.

is a common measuring stick that allows you to compare a wide variety of costs and benefits, taking account of both financial and non-financial aspects of a decision

Money

Which of these would indicate that in order to increase production of a good, you need to decrease production of another good?

You are producing at a point on your production possibility frontier.

How are inefficient uses of inputs represented on the graph of a production possibility frontier?

by points inside the production possibility frontier

When someone weighs the pros and cons of a particular decision, they are taking into account the _____ principle.

cost-benefit

Suppose that as more families have two full-time workers, more families put their children in day care. Which interdependency would explain the relationship here between labor and day care?

dependencies between markets

Charlotte is studying for a psychology exam and an economics exam that are both scheduled for Monday. She would like to study three hours for each exam, but she only has five hours to study, so she must decide whether one exam grade is more important to her than the other. This exemplifies which of these types of dependency?

dependencies between your own choices

There are far fewer stay-at-home moms today than in 1975 in large part because women's wages have _____, causing the opportunity cost of being a stay-at-home mom to _____.

risen; rise

Amancio is going into his fourth year of school when he is offered a prestigious position at a software company. Instead of applying the opportunity cost principle to see if he should quit school and take the job, he decides to stay in school, because he has already spent so much time and money on furthering his education. Amancio's hasty decision has been negatively affected by:

sunk costs

You are weighing the cost of a cup of coffee against the satisfaction you will obtain from the coffee. Which economic principle are you taking into account?

the cost-benefit principle

You have decided that you will buy tacos, but you are still trying to decide how many tacos you should buy. Which economic principle are you taking into account?

the marginal principle

You are thinking about quitting your job to go back to school. Which of these is not associated with an opportunity cost?

time spent

You are willing to pay $5 for a medium sized bubble tea. According to the cost-benefit principle, when should you buy bubble tea?

when the cost is less than or equal to $5

When are out-of-pocket costs also opportunity costs?

when the out-of-pocket costs do not exist in the next best alternative

Jenna is considering going to college for another year. She is creating a chart of the costs and benefits of this decision. She knows that tuition will cost $20,000, but she has a scholarship for $15,500. How much should she put for tuition in the cost column of her chart?

$4,500

If a buyer's willingness to pay for an item is $12, and the buyer purchases the item for $7, what is the buyer's economic surplus?

$5

eniz produces cups and bowls. Her production possibility frontier for a particular amount of time is displayed below. What is the opportunity cost of producing an additional cup?

2 bowls

The opportunity cost of working for pay _____ in 2020 for families with children when schools and daycares shut down to prevent spread of Covid-19. Families had to _____ paid work, to take care of the children who were at home now.

increased; cut back on

A business owner is thinking about how many workers she should hire. She also thinks about whether she should purchase a larger building for these workers. Taking into account both of these decisions together is the essence of the _____ principle.

interdependence

The _____ principle says that decisions about quantities are BEST made incrementally.

marginal