Question 1

Suppose a doctor can earn an additional $25 000 per year in revenue by keeping her office open on Sundays. At what additional cost would keeping the office open on Sundays not be considered economically rational?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Suppose a doctor can earn an additional...

Question 2

All economic questions arise from the fact that resources are unlimited.

Accepted Answer

Economic questions arise from the fact that resources are limited, not unlimited. This is because human wants and needs are unlimited, while resources to satisfy those wants and needs are scarce. This gives rise to the need for economic decision-making and the allocation of resources to different uses.

Question 3

'Marginal benefit' refers to the additional benefit that your activity provides to you.

Accepted Answer

Marginal benefit is defined as the additional benefit that is gained from an increase in an activity or an additional unit of a good or service.

Question 4

Even if the population declines, scarcity will still exist.

Accepted Answer

Scarcity refers to limited resources in comparison to the unlimited wants and needs of individuals. Even if the population declines, the demands and desires of people will not disappear, and resources will continue to be finite. Therefore, scarcity will still exist.

Question 5

What is meant by the statement that 'optimal decisions are made at the margin'?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of What is meant by the statement that...

Question 6

The idea that because of scarcity, producing more of one good or service means producing less of another good or service refers to the economic concept of:
A)optimisation.
B)efficiency.
C)trade-off.
D)equity.

Accepted Answer

The concept described in the statement is the trade-off. It refers to the fact that resources are limited, and therefore, producing more of one good or service means sacrificing the production of another good or service. This implies an opportunity cost, which is the value of the next best alternative forgone. This concept is fundamental in economics and is related to the idea of scarcity. Therefore, the correct answer is (C) trade-off.

Question 7

The term 'market' refers to trading arrangements by which buyers and sellers come together.

Accepted Answer

This is the correct definition of the term 'market'.

Question 8

The three fundamental questions that any economy must address are:
A)What will be the prices of goods and services; how will these goods and services be produced; and who will receive them?
B)What goods and services will be produced; how will these goods and services be produced; and who receives them?
C)Who gets jobs; what wages do workers earn; and who owns what property?
D)How much will be saved; what will be produced; and how can these goods and services be fairly distributed?

Accepted Answer

The three fundamental questions that any economy must address are what goods and services will be produced, how will these goods and services be produced, and who receives them. This best captures the essential elements of what an economy needs to address in terms of production, distribution, and consumption of goods and services.

Question 9

What is a 'marginal benefit'?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of What is a 'marginal benefit'?
_____________________________________________________________________________________________
_____________________________________________________________________________________________...

Question 10

Society faces a trade-off in all of the following situations except:
A)when deciding who will receive the goods and services produced.
B)when deciding what goods and services will be produced.
C)when deciding how goods and services will be produced.
D)when some previously unemployed workers find jobs.

Accepted Answer

The statement "when some previously unemployed workers find jobs" does not involve a trade-off. It is a positive outcome as it reduces unemployment and increases economic participation. In all other situations, there is a limited amount of resources and society must make trade-offs in terms of allocation and production.

Question 11

Explain the economic assumption that 'people are rational'.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Explain the economic assumption that 'people are...

Question 12

If it costs Sinclair $300 to produce 3 suede jackets and $450 to produce 4 suede jackets, then the difference of $150 is the marginal cost of producing the fourth suede jacket.

Accepted Answer

The marginal cost is the cost of producing one additional unit. In this case, the cost of producing the fourth jacket can be calculated by taking the difference between the cost of producing 4 jackets and the cost of producing 3 jackets, which is $450 - $300 = $150. Therefore, the statement is true.

Question 13

What is an 'economic model'?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of What is an 'economic model'?
_____________________________________________________________________________________________
_____________________________________________________________________________________________...

Question 14

Explain the economic idea that 'people respond to incentives'.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Explain the economic idea that 'people respond...

Question 15

Suppose the extra cost for an orthodontist to keep his office open for one extra hour is $300. Then, the orthodontist should stay open for the extra hour if he can generate additional revenue of $300 for that hour.

Accepted Answer

The extra cost of $300 should be outweighed by the additional revenue of $300 in order for it to be economically beneficial for the orthodontist to stay open for an extra hour. Therefore, if the orthodontist can generate the additional revenue, they should stay open for the extra hour.

Question 16

If it costs Danitra $225 to create 4 necklaces and $275 to create 5 necklaces, then $50 is the marginal cost of producing the fifth necklace.

Accepted Answer

We can use the concept of marginal cost to solve this problem. Marginal cost is the additional cost of producing one more unit of a product.

To find the marginal cost of producing the fifth necklace, we can subtract the total cost of producing 4 necklaces from the total cost of producing 5 necklaces:

$275 - $225 = $50

Therefore, the marginal cost of producing the fifth necklace is $50, which means that the statement is true and the answer is A.

Question 17

The additional cost to a producer of hiring an additional unit of labour is called the 'marginal cost'.

Accepted Answer

This statement is true. The marginal cost of hiring an additional unit of labor refers to the incremental cost incurred by the producer when adding one more unit of labor to the production process.

Question 18

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1 200. Then, the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1 200 or more.

Accepted Answer

If the additional revenue from keeping the office open on Saturdays is equal to or greater than the extra cost, then it is financially feasible for the doctor to stay open on Saturdays. Therefore, the statement is true.

Question 19

Assume that a doctor can earn an additional $20 000 of revenue each year from keeping his office open for one additional hour per week. What must the additional cost of keeping the office open this additional hour per week be to make staying open for the extra hour economically rational?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Assume that a doctor can earn an...

Question 20

What is a 'marginal cost'?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of What is a 'marginal cost'?
_____________________________________________________________________________________________
_____________________________________________________________________________________________...

Quiz 1: Economics: Foundations and Models

Suppose a doctor can earn an additional $25 000 per year in revenue by keeping her office open on Sundays. At what additional cost would keeping the office open on Sundays not be considered economically rational? _ _

All economic questions arise from the fact that resources are unlimited.

'Marginal benefit' refers to the additional benefit that your activity provides to you.

Even if the population declines, scarcity will still exist.

What is meant by the statement that 'optimal decisions are made at the margin'? _ _

The idea that because of scarcity, producing more of one good or service means producing less of another good or service refers to the economic concept of:

The term 'market' refers to trading arrangements by which buyers and sellers come together.

The three fundamental questions that any economy must address are:

What is a 'marginal benefit'? _ _

Society faces a trade-off in all of the following situations except:

Explain the economic assumption that 'people are rational'. _ _

If it costs Sinclair $300 to produce 3 suede jackets and $450 to produce 4 suede jackets, then the difference of $150 is the marginal cost of producing the fourth suede jacket.

What is an 'economic model'? _ _

Explain the economic idea that 'people respond to incentives'. _ _

Suppose the extra cost for an orthodontist to keep his office open for one extra hour is $300. Then, the orthodontist should stay open for the extra hour if he can generate additional revenue of $300 for that hour.

If it costs Danitra $225 to create 4 necklaces and $275 to create 5 necklaces, then $50 is the marginal cost of producing the fifth necklace.

The additional cost to a producer of hiring an additional unit of labour is called the 'marginal cost'.

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1 200. Then, the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1 200 or more.

Assume that a doctor can earn an additional $20 000 of revenue each year from keeping his office open for one additional hour per week. What must the additional cost of keeping the office open this additional hour per week be to make staying open for the extra hour economically rational? _ _

What is a 'marginal cost'? _ _

Quiz 1: Economics: Foundations and Models

All economic questions arise from the fact that resources are unlimited.

'Marginal benefit' refers to the additional benefit that your activity provides to you.

Even if the population declines, scarcity will still exist.

What is meant by the statement that 'optimal decisions are made at the margin'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

The idea that because of scarcity, producing more of one good or service means producing less of another good or service refers to the economic concept of:

The term 'market' refers to trading arrangements by which buyers and sellers come together.

The three fundamental questions that any economy must address are:

What is a 'marginal benefit'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Society faces a trade-off in all of the following situations except:

Explain the economic assumption that 'people are rational'. _____________________________________________________________________________________________ _____________________________________________________________________________________________

If it costs Sinclair $300 to produce 3 suede jackets and $450 to produce 4 suede jackets, then the difference of $150 is the marginal cost of producing the fourth suede jacket.

What is an 'economic model'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Explain the economic idea that 'people respond to incentives'. _____________________________________________________________________________________________ _____________________________________________________________________________________________

Suppose the extra cost for an orthodontist to keep his office open for one extra hour is $300. Then, the orthodontist should stay open for the extra hour if he can generate additional revenue of $300 for that hour.

If it costs Danitra $225 to create 4 necklaces and $275 to create 5 necklaces, then $50 is the marginal cost of producing the fifth necklace.

The additional cost to a producer of hiring an additional unit of labour is called the 'marginal cost'.

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1 200. Then, the doctor should stay open on Saturdays if keeping the office open brings in additional revenue of $1 200 or more.

What is a 'marginal cost'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

What is meant by the statement that 'optimal decisions are made at the margin'? _ _

What is a 'marginal benefit'? _ _

Explain the economic assumption that 'people are rational'. _ _

What is an 'economic model'? _ _

Explain the economic idea that 'people respond to incentives'. _ _

What is a 'marginal cost'? _ _