Macroeconomic

Choosing to study for an exam until the extra benefit (e.g., improved score) equals the extra cost (e.g., the value of foregone activities) is:

an application of the Cost-Benefit Principle.

Chris has a one-hour break between classes every Wednesday. Chris can either stay at the library and study or go to the gym and work out. The decision Chris must make is:

an economic problem because Chris has only one hour, and engaging in one activity means giving up the other.

An economic naturalist is someone who:

applies economic insights to understand everyday life.

If a person takes an action if, and only if, the extra benefits from taking that action exceed the extra costs, then that person is:

following the Cost-Benefit Principle.

Refer to the table below. The average cost of 4 units of this activity is: Units of Activity Total Cost Total Benefit 0 $0 $0 1 $30 $100 2 $40 $160 3 $60 $190 4 $100 $210 5 $150 $220 6 $210 $225

$25

A firm pays Pam $40 per hour to assemble personal computers. Each day, Pam can assemble 4 computers if she works 1 hour, 7 computers if she works 2 hours, 9 computers if she works 3 hours, and 10 computers if she works 4 hours. Pam cannot work more than 4 hours day. Each computer consists of a motherboard, a hard drive, a case, a monitor, a keyboard, and a mouse. The total cost of these parts is $600 per computer. If the firm sells each computer for $650, then how many hours a day should the firm employ Pam to maximize its net benefit from her employment?

4 hours

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. Number of Employees Total Donations Average Donations Total Labor Costs Average Labor Costs 1 $30,000 $8,000 2 $42,426 $17,000 3 $17,321 $27,000 4 $60,000 $9,500 5 $13,416 $50,000 The President of State U decides to hire fundraising employees as long as their average benefit exceeds their average cost. This results in ______ employees being hired and a net benefit (total donations minus total labor costs) of ______.

5; $17,080

The field of economics that would be most concerned with a recent fall in interest rates is:

macroeconomics

The extra benefit that results from carrying out one additional unit of an activity is the ______ of the activity.

marginal benefit

The Scarcity Principle tells us ______, and the Cost-Benefit Principle tells us ______.

that choices must be made; how to make good choices

According to the Cost-Benefit Principle, you should go see the latest Star Wars movie with your friends this weekend if:

the extra benefits of seeing the movie are greater than the extra costs of seeing the movie.

You have two options for how to spend the afternoon. You can either go see a movie with your roommate or work as a tutor for the Math Department. From experience, you know that going to see a movie gives you $20 worth of enjoyment, and with your student discount, a movie ticket only costs $12. If you spend the afternoon working as a math tutor, you will get paid $45. On a typical day, you wouldn't be willing to spend the afternoon working as a math tutor for less than $35. What is your economic surplus from working as a math tutor instead of going to the movies?

$12

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 NoName U is:

$20,000

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. The benefit to Matt of buying his books at the university bookstore instead of online is:

$5

The last time gas prices increased drastically, sales of large Sport Utility Vehicles (SUVs) fell. Why?

Higher gas prices increased the cost of driving a SUV.

Which of the following would not be studied in macroeconomics?

History of gasoline prices

Suppose there are two parallel highways between two cities with approximately equal traffic. What would you expect to happen if the state began charging tolls to drive on one of those highways?

More drivers would drive on the non-toll road, making the toll road less congested. Correct