Question 1

Complete the following sentence.Marginal cost is

Accepted Answer

Marginal cost is the cost of producing one more unit or the cost of an increase in an activity. It is calculated by taking the change in total cost when one more unit is produced.

Question 2

A university decides to change its late night bus service between the campus and student housing from a fare-based service to a free service.This statement means that the incentive to ride the bus ________ and the opportunity cost of a bus ride ________.The university's decision is a ________ decision.

Accepted Answer

When the university changes the late night bus service from a fare-based service to a free service, it will decrease the incentive to ride the bus since there is no longer a cost associated with it. The opportunity cost of a bus ride will also decrease because there is no longer a monetary cost. This decision is a microeconomic decision because it only affects the university's bus service and does not have a wider impact on the overall economy.

Question 3

What is the definition of marginal benefit?

Accepted Answer

Marginal benefit is the benefit that arises from an increase in an activity. It's the additional benefit a person receives from consuming one more unit of a good or service.

Question 4

Which of the following sayings best describes opportunity cost?

Accepted Answer

The saying "There's no such thing as a free lunch" best describes opportunity cost because it means that you cannot get something for nothing and every choice has a cost, whether it be time, money or other resources. When making a decision, you must consider what it is you are giving up in order to make that choice.

Question 5

Marginal benefit is the

Accepted Answer

Marginal benefit refers to the additional benefit gained from each unit of an activity. Therefore, the correct option is C which represents the additional benefit from an increase in an activity.

Question 6

The big tradeoff is the tradeoff between

Accepted Answer

The big tradeoff refers to the tradeoff between equality and efficiency. In order to achieve greater equality, policies may be implemented that reduce efficiency, while policies that promote efficiency may increase inequality. This tradeoff is a central concern in economic policy-making and decision-making.

Question 7

When asked in an interview what she missed the most because of the time she spent training for the Olympics,a rower,who lived on her own,answered "a normal social life." She also revealed that she had given up a job that paid $30,000 per year to train fulltime.She received a grant of $8,000 per year from Sport Canada,but this failed to cover all her training expenses.Her food and rent were $5,000 per year and training expenses were $12,000 per year.Aside from the value of a normal social life,what is the annual opportunity cost,expressed in dollars,to this rower of "Going for Gold"?

Accepted Answer

The answer of When asked in an interview what she...

Question 8

When the government chooses to use resources to build a dam,those resources are no longer available to build a highway.This illustrates the concept of

Accepted Answer

The concept being illustrated here is opportunity cost, which refers to the cost of giving up one opportunity in order to pursue another. In this case, the opportunity cost of building a dam is the highway that could have been built instead.

Question 9

Which one of the following is a necessary consequence of scarcity?

Accepted Answer

Scarcity means that there are limited resources to fulfill unlimited wants. Therefore, individuals and societies must make choices about which needs or wants to prioritize given the limited availability of resources. Hence, the requirement of making choices is a necessary consequence of scarcity.

Question 10

"There can be too much of a good thing." This statement suggests that

Accepted Answer

This statement suggests that producing too much of a good can result in its marginal cost exceeding its marginal benefit. This means that the cost of producing additional units of the good outweighs the benefit gained from producing them, leading to inefficiency and potentially harming the overall economy. Therefore, choice B is the best answer.

Question 11

Which of the following creates an incentive to increase the amount of an activity?

Accepted Answer

A decrease in the marginal cost of an activity means it becomes less expensive to engage in that activity, while an increase in the marginal benefit means the activity has become more rewarding or valuable. These two factors create an incentive for individuals to increase the amount they engage in the activity.

Question 12

Monika will choose to eat a seventh pizza slice if

Accepted Answer

Monika will only choose to eat a seventh slice of pizza if the marginal benefit from that slice (the additional satisfaction or enjoyment she gets from eating it) is greater than its marginal cost (the additional cost in terms of money, calories, or any other negative consequence). If the marginal cost exceeds the marginal benefit, Monika will not choose to eat the slice. The other options (total benefit and total cost) do not directly determine Monika's decision to eat or not eat a seventh slice, as they are based on the cumulative effect of all the previous slices she has eaten. The fact that she has enough money to pay for the slice is also not sufficient to determine her decision, as she may still choose not to eat it if the marginal benefit is not worth the marginal cost.

Question 13

The night before a history test,you decide to go to the movies instead of reviewing your notes.You get 60 percent on your test compared with the 75 percent that you normally score.You ________ a tradeoff ________,and the opportunity cost of your evening at the movies was ________.

Accepted Answer

The best choice would have been to review your notes instead of going to the movies, as it would have resulted in a higher test score. By choosing to go to the movies instead, you faced a tradeoff between a higher test score and an evening at the movies. The opportunity cost of your evening at the movies was the 15 percent fall in your grade, as you scored 60 percent on the test instead of your usual 75 percent.

Question 14

Use the information below to answer the following question.
Fact 1.1.1 Costs Soar for London Olympics
The regeneration of East London,the site of the 2012 Olympic Games,is set to add extra £1.5 billion to taxpayers' bill.
The Times,London,July 6,2006
-Refer to Fact 1.1.1.The cost of regenerating East London ________ an opportunity cost of hosting the 2012 Olympic Games ________.

Accepted Answer

The answer of Use the information below to answer the...

Question 15

Laura is a manager for HP.When Laura must decide whether to produce a few additional printers,she is choosing at the margin when she compares ________.

Accepted Answer

Choosing at the margin means comparing the additional benefit (in this case, extra revenue from selling a few additional printers) to the additional cost (extra costs of producing the printers). This is exactly what option B describes. Option A is looking at total revenue and total cost, which doesn't factor in the specific decision being made at the margin. Option C involves averaging costs, which again isn't necessary when making a decision about adding a few additional printers. Options D and E are related to competition and are not relevant to the decision at hand.

Question 16

Before starring as Tony Stark in Iron Man,Robert Downey Jr.had played in 45 movies that had average first-weekend box office revenues of a bit less than $5 million.Iron Man grossed $102 million in its first weekend.The success of Iron Man ________ the opportunity cost of hiring Robert Downey Jr. Movie producers now have ________ incentive to hire Robert Downey Jr.

Accepted Answer

The success of Iron Man significantly increased the revenue generated by movies that Robert Downey Jr. starred in. This raises the opportunity cost for movie producers if they do not hire him, thus providing a greater incentive to hire him in the future.

Question 17

To make choices,people must

Accepted Answer

To make choices, people must be able to evaluate the values of alternative actions. This involves weighing the potential costs and benefits of each option and making a decision based on what will result in the best outcome. While access to information and resources can certainly be helpful in making choices, the ability to evaluate the values of alternatives is essential.

Question 18

Saskatchewan had more hospitals than Ontario,despite having one-tenth the population.The Saskatchewan government closed many of these hospitals in spite of widespread local protests.Which one of the following arguments is true?

Accepted Answer

The answer of Saskatchewan had more hospitals than Ontario,despite having...

Question 19

You have the choice of going on vacation to Florida for one week,staying at work for the week,or spending the week doing fix-up projects around your house.If you decide to go to Florida,the opportunity cost of the trip is ________.

Accepted Answer

The answer of You have the choice of going on...

Question 20

If you take an additional class this term,you can graduate earlier.This is an example of

Accepted Answer

Taking an additional class can have benefits in terms of graduating earlier. The marginal benefit of taking an additional class can outweigh the marginal cost and therefore it is a rational choice.

Quiz 1: What Is Economics