Question Question 1 1.  The economic surplus of a particular action is: Answer

Question 1
1.
The economic surplus of a particular action is:
Answer

The value of the action

The cost of the action

The difference between the benefit and the cost of the action

The average of the benefits and costs
2 points
Question 2
1.
For many students, the opportunity cost of taking an 8:00 a.m. Monday, Wednesday, and Friday class is the value of one hour’s worth of:
Answer

Studying

Dental work

Washing

Sleeping
2 points
Question 3
1.
Dillon purchased his nonrefundable, nontransferable ticket to see the M. C. Hammer/Vanilla Ice Career Revival show for $30 last week, while Bob has yet to buy his ticket but wants to go. In deciding whether to go to the show, the price of the ticket is a ________ to Dillon and a _________ to Bob.
Answer

sunk cost; sunk cost

relevant cost; sunk cost

sunk cost; variable cost

fixed cost; variable cost
2 points
Question 4
1.
If a given production combination is known to be attainable, then it must be:
Answer

On the production possibilities curve

Beyond the production possibilities curve

An inefficient point

Either an inefficient or efficient point
2 points
Question 5
1.
Application of the principle of comparative advantage leads to:
Answer

Greater and greater specialization of labor and other factors of production

Lesser and lesser specialization of labor

Societies where everyone can do a little of everything

Lower total output
2 points
Question 6
1.
According to the textbook, the largest factor explaining the variance in the performance of the economies of the world is the:
Answer

Degree of specialization

Size of government

Location of the country

Type of government
2 points
Question 7
1.
In order to understand how the price of a good is determined in the free market, one must account for:
Answer

The desires of demanders exclusively

The desires of suppliers exclusively

The desires of lobbyists exclusively

The desires of demanders and suppliers
2 points
Question 8
1.
The statement “Holding all other relevant factors constant, consumers will purchase more of a good as its price falls” reflects the behavior underlying:
Answer

The demand curve

An increase in demand

The supply curve

A decrease in the demand curve
2 points
Question 9
1.
The market for a good is comprised of:
Answer

Only buyers of the good

Only sellers of the good

Both buyers and sellers of the good

Only the price at which the good is sold
2 points
Question 10
1.
If the percentage change in quantity demanded is less than the corresponding percentage change in price, demand is price _________.
Answer

inelastic

elastic

unit elastic

perfectly elastic
2 points
Question 11
1.
The demand for a specific brand of juice will be _______ the demand for juice in general.
Answer

more elastic than

less elastic than

as elastic as

as inelastic as
2 points
Question 12
1.
Which of the following is most likely to have a negative income elasticity of demand?
Answer

Generic drugs

Luxurious overseas vacations

New SUVs

New computers
2 points
Question 13
1.
The property of diminishing marginal utility means that as more units of a good are consumed:
Answer

Total utility falls

The marginal utility of the extra units is negative

The marginal utility of the extra units becomes smaller and smaller

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