Question 1

Jamie has enough money to buy either a Mountain Dew,or a Pepsi,or a bag of chips.He chooses to buy the Mountain Dew.The opportunity cost of the Mountain Dew is

Accepted Answer

Opportunity cost is the value of the highest valued alternative forgone. Therefore, the best choice is option B, which states that the opportunity cost is either the Pepsi or the bag of chips, whichever is the option with the higher value. Thus, Jamie had to give up one of these two options in order to purchase the Mountain Dew.

Question 2

John has two hours of free time this evening.He ranked his alternatives,first go to a concert,second go to a movie,third study for an economics exam,and fourth answer his e-mail.What is the opportunity cost of attending the concert for John?

Accepted Answer

The opportunity cost of an action is the value of the next best alternative forgone. Since attending a movie is John's second choice, it represents the opportunity cost of attending the concert.

Question 3

A statement that "All children should receive free health care" is an example of what kind of statement?

Accepted Answer

This statement expresses a value judgment about what ought to be, rather than a statement of fact about what is (positive statement) or what could be tested through observation (natural experiment statement). It is a normative statement because it makes a moral claim about what is right or wrong.

Question 4

Which of the following is an example of a normative statement?

Accepted Answer

A normative statement reflects a value judgment or opinion about what ought to be. Option B, "Car prices should be affordable" is an example of a normative statement as it expresses a value judgment about car prices. The other options are positive statements, which describe how the world is or what happens in the world without expressing any judgments about whether they are desirable or not.

Question 5

The marginal benefit of an activity is
i.the benefit from a one-unit increase in the activity.
ii.the benefit of a small,unimportant activity.
iii.measured by what the person is willing to give up to get one additional unit of the activity.

Accepted Answer

The marginal benefit of an activity is the benefit from a one-unit increase in the activity (i) and is measured by what the person is willing to give up to get one additional unit of the activity (iii). Option ii is incorrect because the question states that the activity being referred to is not small or unimportant.

Question 6

Amy can study for an hour or spend that hour sleeping or going out for dinner.If she decides to study for the hour,the opportunity cost of the hour spent studying is

Accepted Answer

The opportunity cost of studying is the value of the next best alternative that is foregone as a result of the decision. In this case, the next best alternatives are sleeping or going out for dinner. The opportunity cost is not the choice that was made (studying), but rather the value of what was given up (in this case, sleeping or going out for dinner). Therefore, the correct answer is C.

Question 7

Congress and the President passed a national health care policy.This is an example of

Accepted Answer

This is an example of the government using economic tools to make policy decisions as they are implementing a policy that aims to address issues of access, cost, and quality of healthcare through a national health care policy.

Question 8

The cost of a one-unit increase in an activity

Accepted Answer

The cost of a one-unit increase in an activity is called the marginal cost. This represents the additional cost incurred to produce or consume one more unit of the good or service.

Question 9

If there is no scarcity,

Accepted Answer

Scarcity is the fundamental economic problem that drives all human behavior. It means that we have limited resources to satisfy unlimited wants and needs. If there were no scarcity, then everything would be available in unlimited quantities, and there would be no need to choose between alternatives. Therefore, there would be zero opportunity cost for any action taken.

Question 10

By donating $1,000 to the Salvation Army,Caroline reduces her taxable income.To Caroline,the reduction in her taxable income is

Accepted Answer

The reduction in Caroline's taxable income is an incentive for her to donate to the Salvation Army, as it allows her to potentially lower her tax liability.

Question 11

If the marginal benefit of the next slice of pizza exceeds the marginal cost,you will

Accepted Answer

If the marginal benefit of the next slice of pizza exceeds the marginal cost, it means that the benefit of eating the slice is greater than the cost of consuming it. Therefore, the rational choice would be to eat the slice of pizza.

Question 12

When the Dallas Cowboys score more than 30 points in a game,they win the game.This is an example of

Accepted Answer

This statement is an example of a correlation between two variables. It suggests that there is a relationship between the number of points scored and the outcome of the game. It does not provide an explanation or theory for why this correlation exists, nor does it prescribe any behavior or action. Therefore, it is not an economic theory, normative statement, or statement on the margin. It could be argued that it provides an incentive for the team to score more points, but this is not the main focus or purpose of the statement.

Question 13

The additional benefit of increasing some activity by one-unit is called the

Accepted Answer

The additional benefit of increasing some activity by one-unit is called the marginal benefit.

Question 14

The ________ of something is the gain or pleasure that it brings.

Accepted Answer

The benefit of something refers to the gain or pleasure that it brings. The other options are not related to the concept of benefit.

Question 15

The benefit of an activity is

Accepted Answer

The benefit of an activity is subjective and cannot be purely measured in dollars. It is the gain or pleasure that the activity brings to the person engaging in it.

Question 16

Opportunity cost is best defined as

Accepted Answer

Opportunity cost is the value of the highest-valued alternative that is forgone in making a choice. It is the cost of the next best alternative that must be given up in order to pursue a certain action.

Question 17

Which of the following statements is a normative statement?

Accepted Answer

A normative statement is a statement about what should be, rather than what is. Option A clearly states what should be, i.e., every American household should have health care insurance coverage.

Question 18

Which of the following statements is a normative statement?

Accepted Answer

B is a normative statement because it expresses a value judgment on what the minimum wage should be, whereas the other statements are descriptive statements that simply state facts without expressing any subjective opinions or value judgments.

Question 19

When people make rational choices,they

Accepted Answer

When people make rational choices, they weigh the costs and benefits of their options and act to satisfy their wants. This means that they consider the consequences of their actions and the trade-offs involved in making a decision. By doing so, they are more likely to make choices that align with their goals and desires.

Question 20

Which of the following is an example of a normative economic statement?

Accepted Answer

A normative economic statement expresses an opinion or value judgment and cannot be proven true or false. Option A expresses a value judgment by stating that access to quality health insurance should be a top priority for domestic policy.

The other options are all positive economic statements, which can be proven true or false based on empirical evidence. Option B suggests a causal relationship between an extension in unemployment benefits and an increase in unemployment, which could be tested with data. Option C suggests a relationship between changes in tax rates and consumer spending. Option D suggests that inflation can result from excessive money printing, which is a widely recognized economic principle. Option E suggests a relationship between fiscal policy and interest rates.

Quiz 1: Getting Started

Jamie has enough money to buy either a Mountain Dew,or a Pepsi,or a bag of chips.He chooses to buy the Mountain Dew.The opportunity cost of the Mountain Dew is

John has two hours of free time this evening.He ranked his alternatives,first go to a concert,second go to a movie,third study for an economics exam,and fourth answer his e-mail.What is the opportunity cost of attending the concert for John?

A statement that "All children should receive free health care" is an example of what kind of statement?

Which of the following is an example of a normative statement?

The marginal benefit of an activity is i.the benefit from a one-unit increase in the activity. ii.the benefit of a small,unimportant activity. iii.measured by what the person is willing to give up to get one additional unit of the activity.

Amy can study for an hour or spend that hour sleeping or going out for dinner.If she decides to study for the hour,the opportunity cost of the hour spent studying is

Congress and the President passed a national health care policy.This is an example of

The cost of a one-unit increase in an activity

If there is no scarcity,

By donating $1,000 to the Salvation Army,Caroline reduces her taxable income.To Caroline,the reduction in her taxable income is

If the marginal benefit of the next slice of pizza exceeds the marginal cost,you will

When the Dallas Cowboys score more than 30 points in a game,they win the game.This is an example of

The additional benefit of increasing some activity by one-unit is called the

The ________ of something is the gain or pleasure that it brings.

The benefit of an activity is

Opportunity cost is best defined as

Which of the following statements is a normative statement?

Which of the following statements is a normative statement?

When people make rational choices,they

Which of the following is an example of a normative economic statement?