Question 1

Define the term "sunk costs" and illustrate with an example.

Accepted Answer

Sunk costs, which are costs that were in...

Question 2

The lesson of __________ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options.

Accepted Answer

A)   sunk costs
B)   opportunity costs
C)   marginal analysis
D)   budget constraints

Question 3

Philosophers draw a distinction between ___________________, which describe the world as it is, and normative statements, which describe how the world should be.

Accepted Answer

A)   negative statements
B)   positive statements
C)   tradeoffs
D)   utilitarianism

Question 4

Define Productive Efficiency and Allocative Efficiency.

Accepted Answer

Productive efficiency means that, given ...

Question 5

Attending college is a case where the ________________ exceeds the monetary cost.

Accepted Answer

A)   budget constraint
B)   marginal analysis
C)   opportunity cost
D)   marginal utility

Question 6

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is:

Accepted Answer

A)   nothing, because he enjoys playing basketball more than studying.
B)   the increase in skill he obtains from playing basketball for that hour.
C)   the benefit to his grades from studying for an hour
D)   nothing, because he had a free pass into the sports complex to play basketball.

Question 7

Most real-world choices aren't about getting all of one thing or another, instead, most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good.

Accepted Answer

A)   utility
B)   opportunity cost
C)   benefit analysis
D)   marginal analysis

Question 8

In deciding how many hours to work, Beulah will make a choice that maximizes her _______; that is, she will choose according to her preferences for leisure time and income.

Accepted Answer

A)   budget constraint
B)   opportunity set
C)   utility
D)   production possibilities frontier

Question 9

The opportunity cost of an action:

Accepted Answer

A)   can be determined by considering both the benefits that flow from as well as the monetary costs incurred as a result of the action.
B)   can be determined by adding up the bills incurred as a result of the action.
C)   can be objectively determined only by economists.
D)   is a subjective valuation that can be determined only by the individual who chooses the action.

Question 10

Draw a picture of a production possibilities frontier curve. Identify each axis as measuring either guns or butter. Select and label Point A, which is beyond the economy's ability to produce; Point B, which represents an inefficient level of production; Point C, an efficient combination of output in which more guns are produced than units of butter; and Point D, an efficient production point in which more units of butter are produced than guns. Be sure to label each clearly.

Accepted Answer

Point A is beyond the economy's ability ...

Question 11

When most people want to know the cost of an item or a service, they look for a price tag. When economists want to determine cost, they go one step further. They use the idea of opportunity cost. Explain the concept of opportunity cost and illustrate with an example.

Accepted Answer

Opportunity cost is whatever must be giv...

Question 12

The general pattern that consumption of the first few units of any good tends to bring a higher level of _______ to a person than consumption of later units is a common pattern.

Accepted Answer

A)   utility
B)   marginal benefit
C)   opportunity cost
D)   sunk costs

Question 13

Economists refer to this pattern, the ___________________________________, which means that as a person receives more of a good, the additional or marginal utility from each additional unit of the good declines.

Accepted Answer

A)   law of trade-offs
B)   law of diminishing marginal utility
C)   production possibilities frontier
D)   law of increasing marginal utility

Question 14

The lesson of __________ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options.

Accepted Answer

A)   marginal utility
B)   sunk costs
C)   marginal analysis
D)   budget constraints

Question 15

Explain the Law of Diminishing Returns and illustrate with a relevant example.

Accepted Answer

The law of diminishing returns holds tha...

Question 16

Marginal thinking is best demonstrated by:

Accepted Answer

A)   choosing to spend one more hour studying economics because you think the improvement in your score on the next quiz will be worth the sacrifice of time.
B)   deciding to never purchase a coat made with animal skins or furs
C)   acquiring the information relevant to a choice before making that choice
D)   measuring all of the costs of a meal against all of the benefits when deciding whether to order a second milkshake

Exam 2: Choice in a World of Scarcity

Philosophers draw a distinction between ___________________, which describe the world as it is, and normative statements, which describe how the world should be.

Correct Answer
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Define Productive Efficiency and Allocative Efficiency.

Correct Answer
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Productive efficiency means that, given ...
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The opportunity cost of an action:

Correct Answer
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Most real-world choices aren't about getting all of one thing or another, instead, most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good.

Correct Answer
verified

In deciding how many hours to work, Beulah will make a choice that maximizes her _______; that is, she will choose according to her preferences for leisure time and income.

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
Point A is beyond the economy's ability ...
View Answer

Define the term "sunk costs" and illustrate with an example.

Correct Answer
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Sunk costs, which are costs that were in...
View Answer

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is:

Correct Answer
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The lesson of __________ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options.

Correct Answer
verified

The general pattern that consumption of the first few units of any good tends to bring a higher level of _______ to a person than consumption of later units is a common pattern.

Correct Answer
verified

Economists refer to this pattern, the ___________________________________, which means that as a person receives more of a good, the additional or marginal utility from each additional unit of the good declines.

Correct Answer
verified

Attending college is a case where the ________________ exceeds the monetary cost.

Correct Answer
verified

Explain the Law of Diminishing Returns and illustrate with a relevant example.

Correct Answer
verified
The law of diminishing returns holds tha...
View Answer

The lesson of __________ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options.

Correct Answer
verified

When most people want to know the cost of an item or a service, they look for a price tag. When economists want to determine cost, they go one step further. They use the idea of opportunity cost. Explain the concept of opportunity cost and illustrate with an example.

Correct Answer
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Opportunity cost is whatever must be giv...
View Answer

Marginal thinking is best demonstrated by:

Correct Answer
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Exam 2: Choice in a World of Scarcity

Philosophers draw a distinction between ___________________, which describe the world as it is, and normative statements, which describe how the world should be.

Correct AnswerverifiedShow Answer

Define Productive Efficiency and Allocative Efficiency.

Correct AnswerverifiedProductive efficiency means that, given ...View AnswerShow Answer

The opportunity cost of an action:

Correct AnswerverifiedShow Answer

Most real-world choices aren't about getting all of one thing or another, instead, most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good.

Correct AnswerverifiedShow Answer

In deciding how many hours to work, Beulah will make a choice that maximizes her _______; that is, she will choose according to her preferences for leisure time and income.

Correct AnswerverifiedShow Answer

Correct AnswerAnswered by ExamLex AIPoint A is beyond the economy's ability ...View AnswerShow Answer

Define the term "sunk costs" and illustrate with an example.

Correct AnswerverifiedSunk costs, which are costs that were in...View AnswerShow Answer

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is:

Correct AnswerverifiedShow Answer

The lesson of __________ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options.

Correct AnswerverifiedShow Answer

The general pattern that consumption of the first few units of any good tends to bring a higher level of _______ to a person than consumption of later units is a common pattern.

Correct AnswerverifiedShow Answer

Economists refer to this pattern, the ___________________________________, which means that as a person receives more of a good, the additional or marginal utility from each additional unit of the good declines.

Correct AnswerverifiedShow Answer

Attending college is a case where the ________________ exceeds the monetary cost.

Correct AnswerverifiedShow Answer

Explain the Law of Diminishing Returns and illustrate with a relevant example.

Correct AnswerverifiedThe law of diminishing returns holds tha...View AnswerShow Answer

The lesson of __________ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options.

Correct AnswerverifiedShow Answer

When most people want to know the cost of an item or a service, they look for a price tag. When economists want to determine cost, they go one step further. They use the idea of opportunity cost. Explain the concept of opportunity cost and illustrate with an example.

Correct AnswerverifiedOpportunity cost is whatever must be giv...View AnswerShow Answer

Marginal thinking is best demonstrated by:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Productive efficiency means that, given ...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
Answered by ExamLex AI
Point A is beyond the economy's ability ...
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Correct Answer
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Sunk costs, which are costs that were in...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The law of diminishing returns holds tha...
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Correct Answer
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Correct Answer
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Opportunity cost is whatever must be giv...
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Correct Answer
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