C11 Lesson 1 Exam SCORE 95 PERCENT

  

Quiz

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Question 1 (5 points)

An arrangement that allows buyers and sellers to exchange things is called __________.

Question 1 options:

  

a contract

 

a market

 

money

 

efficient

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Question 2 (5 points)

An unemployed individual decides to spend the day fishing. The opportunity cost of fishing is __________.

Question 2 options:

  

the cost of bait and any other   monetary expenses

 

zero, because the person doesn't   have a job

 

the cost of bait, any other   monetary expenses, and the value of the individual's wages while he was   working

 

the cost of bait, any other monetary expenses, and the value of the   best alternative use of the individual's time

Question 3 (5 points)

Economics is best defined as the study of __________.

Question 3 options:

  

financial decision-making

 

how consumers make purchasing   decisions

 

the choices made by people faced with scarcity

 

inflation, unemployment, and   economic growth

Question 4 (5 points)

If an economy is fully utilizing its resources, it can produce more of one product only if it __________.

Question 4 options:

  

doubles manufacturing of the   product

 

produces less of another product

 

adds more people to the labor   force

 

reduces the prices of the most   expensive products

Question 5 (5 points)

Another factor that was responsible for roughly one-third of hybrid vehicles purchased in 2007 was an increase in the price of gasoline. The increase in sales due to higher gasoline prices describe the economic concept of __________.

Question 5 options:

  

using assumptions to simplify

 

ceteris paribus

 

marginal thinking

 

rational self-interest

Question 6 (5 points)

Jerome has a “C”; average in his philosophy course and a "B" average in his economics course. He decides to study an extra hour for his philosophy exam. This is an example of __________.

Question 6 options:

  

thinking at the margin

 

using assumptions to simplify

 

ceteris paribus

 

caveat emptor

Question 7 (5 points)

The opportunity cost of something is __________.

Question 7 options:

  

the cost of the labor used to   produce it

 

what you sacrifice to get it

 

the price charged for it

 

the search cost required to find   it

Question 8 (5 points)

Deciding if a company will produce automobiles by robotics or manual labor answers the economic question of __________.

Question 8 options:

  

who consumes the products produced

 

what products will be produced

 

where will the products be   consumed

 

how will the products be produced

Question 9 (5 points)

 

Referring to the figure above, if you increase the production of farm goods, what other area is affected?

Question 9 options:

  

the price of produce

 

the production of manufactured goods

 

how much people can purchase

 

the wages earned by farm workers

Question 10 (5 points)

Angelina, age 7, decides to dress up like Princess Fiona for Halloween. What is the opportunity cost of her decision?

Question 10 options:

  

the cost of the costume

 

the fact that she can't dress up like Dora the Explorer, her second   choice

 

zero, because 7 year olds don't   have opportunity costs

 

the cost of the Lady Gaga costume   which she did not want

Question 11 (5 points)

You rent a DVD of The Dark Knight Rises. The rental is for seven days and you watch the movie on the first day. You tell a friend about the film and your friend asks to come over and watch the movie with you before it is due back. What is your opportunity cost if you decide to watch the movie a second time instead of going to a football game?

Question 11 options:

  

the entire cost of the movie   rental, since you have already watched the movie

 

one half the rental cost, because   you have already watched the movie one time

 

The answer depends on how much you   liked the movie in the first place.

 

the football game you forego by watching the movie again

Question 12 (5 points)

The opportunity cost of going to college __________.

Question 12 options:

  

is zero if your parents pay your   tuition

 

is equal to the cost of tuition,   room and board, and other expenses

 

includes wages you lose by going to school instead of working

 

is the same for all students at a   particular school who pay full tuition

Question 13 (5 points)

The 3 key economic questions include all of the following EXCEPT __________.

Question 13 options:

  

"What products do we   produce?"

 

"How do we produce these   products?" (Incorrecr)

 

"Where should these   products be produced?"

 

"Who consumes the   products?"

Question 14 (5 points)

Scarcity can best be defined as a situation in which __________.

Question 14 options:

  

there are no buyers willing to   purchase what sellers have produced

 

there are not enough goods to   satisfy all of the buyers' demand

 

the resources we use to produce goods and services are limited

 

there is more than enough money to   satisfy consumers' wants

Question 15 (5 points)

After the implementation of the congestion tax in London, traffic volume was reduced and travel time for cars and buses was cut in half. This is an example of __________.

Question 15 options:

  

responding to incentives

 

the role of pricing in allocating   resources

 

caveat emptor

 

comparative advantage

Question 16 (5 points)

When economists assume that people are rational and respond to incentives, they mean __________.

Question 16 options:

  

people act with kindness

 

people are altruistic

 

people act in their own self-interest

 

people are selfish

Question 17 (5 points)

The production possibilities curve in Figure 2.1 illustrates the notion of __________.

Question 17 options:

  

increased factory goods production

 

increased farm produce production

 

diminishing resources

 

opportunity cost

Question 18 (5 points)

Economic models are used to __________.

Question 18 options:

  

explain every detail of an   economic theory

 

explore decision making by individuals, firms, and other organizations

 

build physical renditions of   government construction projects

 

represent the complexities of   economic environments

Question 19 (5 points)

The principle that the cost of something is equal to what is sacrificed to get it is known as the __________.

Question 19 options:

  

marginal principle

 

principle of opportunity cost

 

principle of diminishing returns

 

reality principle

Question 20 (5 points)

To make things simpler and focus attention on what really matters, economists would __________.

Question 20 options:

  

use assumptions

 

ignore all variables

 

think at the margin

 

respond to incentives

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