Question 1

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 2

How does a market system prevent people from getting as many goods and services as they wish?

Accepted Answer

In a market system, individuals are able to purchase goods and services based on their ability to pay. As a result, income becomes a limiting factor in the amount of goods and services that one is able to obtain, preventing people from getting as many goods and services as they wish. While governments may intervene in the market mechanism, it is the fundamental nature of the market system that creates this constraint. The ability of firms to charge any price they want is constrained by competition in the market, and the government does impose taxes, but these factors do not directly prevent people from getting as many goods and services as they wish.

Question 3

The Stogie Shop,a cigar store in the mall,sells hand-rolled cigars for $10.00 and machine-made cigars for $2.50 each.What is the opportunity cost of buying a hand-rolled cigar?

Accepted Answer

The opportunity cost of buying a hand-rolled cigar is the value of the best alternative forgone, which in this case is the machine-made cigar. Therefore, we need to calculate how many machine-made cigars we can buy with $10.00, which is $10.00/$2.50 = 4. Therefore, the opportunity cost of buying a hand-rolled cigar is 4 machine-made cigars. So, the best choice is A.

Question 4

Suppose the extra cost to a doctor of keeping her office open on Saturdays is $800.Then,the doctor should not stay open on Saturdays if keeping the office open can only bring in additional revenue of $800.

Accepted Answer

The doctor should stay open on Saturdays if the additional revenue generated is greater than the extra cost of keeping the office open, even if it is only $800. Therefore, the statement is false.

Question 5

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 6

It is necessary for all economic systems to provide people with goods and services and also restrict them from getting as much of these goods and services as they wish,because failure to do this could ________ the efficiency of the system by producing some goods and services that are ________.

Accepted Answer

If individuals are allowed to consume as much as they wish, it could result in overconsumption of certain goods and services, leading to shortages or inefficient allocation of resources. Additionally, some goods and services may not be as highly valued as others, and allowing unlimited consumption could result in a misallocation of resources towards less valuable goods and services. Therefore, it is necessary to restrict consumption to ensure efficient allocation of resources.

Question 7

Fast food restaurants produce a range of menu items such as hamburgers,chicken sandwiches,salads,and french fries.What fundamental economic question are they addressing by offering this range of items?

Accepted Answer

Fast food restaurants decide on the variety of menu items to offer based on consumer demand and preferences, addressing the fundamental economic question of "What to produce?" to meet market needs.

Question 8

Which of the following is an example of an economic trade-off that a firm has to make?

Accepted Answer

A trade-off involves sacrificing one thing for another. In this case, the firm has to decide whether to use more machines or more workers for production, and each option has its own advantages and disadvantages. It's a trade-off between the cost of labor and the cost of capital. The other options listed are not trade-offs, but are instead related to market analysis and pricing decisions.

Question 9

Opportunity cost is defined as

Accepted Answer

Opportunity cost is the value of the next best alternative that must be given up in order to engage in a particular activity. It is not the benefit or expense associated with the activity itself, nor is it the total value of all alternatives that must be given up. Therefore, choice C is the correct definition of opportunity cost.

Question 10

Which of the following is correct about the economic decisions consumers,firms,and the government have to make?

Accepted Answer

Scarcity is a fundamental economic problem that applies to individuals, firms, and governments. Scarcity means that resources are limited, but wants and needs are infinite, which necessitates trade-offs in making economic decisions. Therefore, option D is the correct answer.

Question 11

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 12

Which of the following statements is false?

Accepted Answer

Trade-offs always apply in economics, even in situations where there is excess supply or clearance sales. Therefore, statement B is false.

Question 13

If it costs Vijay $150 to design 5 websites and $175 to design 6 websites,then $175 is the marginal cost of producing the 6th Websites.

Accepted Answer

To calculate the marginal cost, we need to find the additional cost of producing one more unit.

In this case, the cost of producing the first 5 websites is $150, and the cost of producing the first 6 websites is $175.

Therefore, the marginal cost of producing the 6th website would be:

Marginal cost = Total cost of producing 6 websites - Total cost of producing 5 websites

Marginal cost = $175 - $150
Marginal cost = $25

So, the statement " $175 is the marginal cost of producing the 6th Websites" is false.

Question 14

In a market economy,who decides what goods and services will be produced?

Accepted Answer

In a market economy, the decision of what goods and services to produce is ultimately made by both consumers and producers. Consumers make their preferences known by the choices they make in the marketplace, and producers respond accordingly by producing the goods and services that are in demand. This process is guided by the forces of supply and demand, with prices serving as a signal to both producers and consumers about the relative scarcity and desirability of different products. The government may play a role in regulating certain aspects of the economy, but in a pure market economy, it does not have a direct role in deciding what goods and services will be produced.

Question 15

Every society faces economic trade-offs.This means

Accepted Answer

Economic trade-offs mean that producing more of one good means less of another good can be produced. This is because resources (such as labor, raw materials, and technology) are limited, which means that choosing to produce more of one good requires sacrificing the production of another good. Therefore, societies must make choices about how to allocate their resources, and these choices involve trade-offs.

Question 16

Trade-offs force society to make choices when answering what three fundamental questions?

Accepted Answer

The three fundamental economic questions are what goods and services to produce, how to produce them, and who receives them. This is the only answer choice that correctly identifies these three questions. The other answer choices either include irrelevant information (A and C) or incorrectly state the economic questions (D).

Question 17

Ted quits his $60,000-a-year job to be a stay-at-home dad.What is the opportunity cost of his decision?

Accepted Answer

The opportunity cost of Ted's decision is at least $60,000 because he is giving up his $60,000-a-year job to be a stay-at-home dad. This is the value of the best alternative that Ted is giving up in order to pursue this choice. While there may be non-monetary benefits to being a stay-at-home dad, such as the joy of parenting, the opportunity cost is still the value of the next best alternative that is being foregone. Therefore, choice C is the correct answer.

Question 18

Who receives the goods and services produced in the United States depends largely on

Accepted Answer

How income is distributed in the United States largely determines who receives the goods and services produced. Those with higher incomes tend to have greater access to goods and services.

Question 19

What is an economic market?

Accepted Answer

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

Question 20

Consider the following economic agents:
a.the government
b.consumers
c.producers
Who,in a modern mixed economy,decides what goods and services will be produced with the scarce resources available in that economy?

Accepted Answer

In a modern mixed economy, the allocation of resources is determined through the interaction of the government, consumers, and producers. The government plays a role in setting policies and regulations that affect both producers and consumers. Producers determine what goods and services to produce based on market demand and profitability, while consumers dictate what goods and services will be successful in the market through their purchasing decisions. Therefore, in a mixed economy, it is the collective decisions of the government, producers, and consumers that determine what goods and services will be produced with scarce resources.

Quiz 1: Economics: Foundations and Models