Question 1

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 2

What is scarcity,and why is it a fundamental concept in economics?

Accepted Answer

The answer of What is scarcity,and why is it a...

Question 3

Suppose a doctor can earn an additional $10,000 in revenue per year from keeping her office open on Saturdays.What must the additional cost of keeping the office open on Saturdays be to make this decision economically rational?

Accepted Answer

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

Question 4

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

When previously unemployed workers find jobs, there is no trade-off being made. It is a situation where the society is benefiting as it is reducing unemployment and increasing economic activity. Therefore, option D is the correct answer.

Question 5

The highest valued alternative that must be given up to engage in an activity is the definition of
A)economic equity.
B)marginal benefit.
C)opportunity cost.
D)marginal cost.

Accepted Answer

Opportunity cost is the highest valued alternative that must be given up to engage in an activity. Economic equity refers to fairness and equality in the use of resources, marginal benefit is the additional benefit derived from an increase in an activity, and marginal cost refers to the additional cost incurred from an increase in an activity.

Question 6

Which of the following statements is true?
A)Anytime you have to decide which action to take you are experiencing economic equity.
B)Trade-offs do not apply when the consumers purchase a product for which there is excess supply, such as a stock clearance sale.
C)Every individual, no matter how rich or poor, is faced with making trade-offs.
D)Economics is a social science that studies the trade-offs we are forced to make because resources are unlimited.

Accepted Answer

Trade-offs are the choices we make when we have limited resources and need to allocate them between competing options. This applies to every individual, regardless of their socioeconomic status or the specific situation they are in. Option A is incorrect because economic equity refers to fairness and balance in the economy, not decision-making. Option B is incorrect because trade-offs always apply, even in situations with excess supply, as consumers still need to decide if they want to spend their money on the discounted product or save it for something else. Option D is incorrect because economics studies how individuals and societies allocate scarce resources to satisfy unlimited wants and needs; it does not necessarily focus solely on trade-offs.

Question 7

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?
A)2 1/2 Russian tea cakes
B)2/5 of a Russian tea cake
C)$2.50
D)$1.00

Accepted Answer

The opportunity cost of buying a cappuccino is the value of the next best alternative, in this case the Russian tea cake. To calculate the opportunity cost, divide the cost of the cappuccino by the cost of the Russian tea cake: $2.50/$1.00 = 2.5. This means that for the cost of one cappuccino, you could buy 2.5 Russian tea cakes. However, you can't buy half of a tea cake, so the best choice for the opportunity cost would be to round down to 2 and a half, or 2 1/2 Russian tea cakes. So, for the cost of one cappuccino, you could have bought 2 and a half Russian tea cakes instead.

Question 8

Suppose a doctor can earn an additional $25,000 in revenue per year 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 9

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)optimization.
B)efficiency.
C)trade-off.
D)equity.

Accepted Answer

This economic concept is known as trade-off, where a choice has to be made between two competing alternatives because of scarcity. When producing more of one good or service, resources have to be diverted from producing another good or service, resulting in a trade-off.

Question 10

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 to produce; 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 to produce, how will these goods and services be produced, and who will receive them. This is the best choice as it accurately represents the questions that an economy must address.

Question 11

Assume that it will cost a plumber an additional $35,000 each year by keeping her shop open for one additional hour per week.What must the additional revenue from keeping the shop open this additional hour per week be to make staying open for the extra hour economically rational?

Accepted Answer

The answer of Assume that it will cost a plumber...

Question 12

What is an economic market?

Accepted Answer

The answer of What is an economic market?...

Question 13

Describe what has happened to state obesity rates in the United States since 1994.

Accepted Answer

The answer of Describe what has happened to state obesity...

Question 14

Explain the term "economics."

Accepted Answer

The answer of Explain the term "economics."...

Question 15

What is an economic model?

Accepted Answer

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

Question 16

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a Russian tea cake?
A)2 1/2 cappuccinos
B)2/5 of a cappuccino
C)$2.50
D)$1.00

Accepted Answer

The opportunity cost of buying a Russian tea cake is the value of the next best alternative foregone, which is the cost of a cappuccino. Therefore, for the price of one Russian tea cake, a customer could have bought 2/5 of a cappuccino ($1.00 divided by $2.50). This is the best choice because it accurately reflects the opportunity cost of choosing the Russian tea cake over the cappuccino.

Question 17

What is a marginal benefit?

Accepted Answer

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

Question 18

What is a marginal cost?

Accepted Answer

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

Question 19

What does the word "marginal" mean in economics? What is a marginal benefit? What is a marginal cost? What is marginal analysis?

Accepted Answer

The answer of What does the word "marginal" mean in...

Question 20

Which of the following is not an example of an economic trade-off that a firm has to make?
A)whether it is cheaper to produce with more machines or with more workers
B)whether it is to outsource the production of a good or service
C)whether or not consumers will buy its products
D)whether it should produce more of its product

Accepted Answer

Option C does not involve a trade-off between two choices. It is a consideration to be taken into account before making a decision but does not involve sacrificing one option for another. Options A, B, and D all involve deciding between two alternatives with their respective costs and benefits.

Quiz 1: Economics: Foundations and Models

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 scarcity,and why is it a fundamental concept in economics?

Suppose a doctor can earn an additional $10,000 in revenue per year from keeping her office open on Saturdays.What must the additional cost of keeping the office open on Saturdays be to make this decision economically rational?

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

The highest valued alternative that must be given up to engage in an activity is the definition of

Which of the following statements is true?

The Coffee Nook,a small cafe near campus,sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each.What is the opportunity cost of buying a cappuccino?

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

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 three fundamental questions that any economy must address are: