(Test Bank) ECON 200 Test Bank: Principles of economics

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ECON200TestBank:Principlesofeconomics Chapter01-ThinkingLikeanEconomist 1.Economicsisbestdefinedasthestudyof A.pricesandquantities. B.inflationandinterestrates. C.howpeoplemakechoicesundertheconditionsofscarcityandtheresultsofthechoices. D.wagesandincomes. 2.Economicquestionsalwaysdealwith A.financialmatters. B.politicalmatters. C.insufficientresources. D.choiceinthefaceoflimitedresources. 3.Therangeoftopicsorissuesthatfitwithinthedefinitionofeconomicsis A.limitedtomarketactivities,e.g.,buyingsoap. B.limitedtoindividualsandfirms. C.extremelywide,requiringonlytheideasofchoiceandscarcity. D.verylimited. 4.Thecentralconcernofeconomicsis A.poverty. B.scarcity. C.wealthaccumulation. D.overconsumption. 5.Thescarcityprincipleindicatesthat A.nomatterhowmuchonehas,itisneverenough. B.comparedto100yearsago,individualshavelesstimetoday. C.withlimitedresources,havingmoreof"this"meanshavinglessof"that." D.becausetradeoffsmustbemade,resourcesarethereforescarce. 6.Thelogicalimplicationofthescarcityprincipleisthat A.onewillneverbesatisfiedwithwhatonehas. B.aswealthincreases,makingtradeoffsbecomeslessnecessary. C.aswealthdecreases,makingtradeoffsbecomeslessnecessary. D.choicesmustbemade. 7.Ifalltheworld'sresourcesweretomagicallyincrease100fold,then A.thescarcityprinciplewouldstillgovernbehavior. B.economicswouldnolongerberelevant. C.thescarcityprinciplewoulddisappear. D.tradeoffswouldbecomeunnecessary. 8.Theprincipleofscarcityappliesto A.thepoorexclusively. B.allconsumers. C.allfirms. D.everyone;consumers,firms,governments,andnations. 9.Attheveryleast,JoeAverageandBillGatesarebothidenticallylimitedby A.theirwealth. B.the24hoursthatcompriseaday. C.theirknowledge. D.theirinfluence. 10.ForestisamountainmanlivingincompleteisolationinMontana.Heiscompletelyself-sufficientthroughhunting, fishing,andfarming.Hehasnotbeeninthecitytobuyanythinginfiveyears.Onecaninfer A.thescarcityprincipledoesnotapplytoForest. B.Forestisnotrequiredtomakechoices. C.thescarcityprinciplestillappliesbecausemorehuntingmeanslessfishingandfarming. D.Forestisverysatisfied. 11.Thescarcityprincipleappliesto A.alldecisions. B.onlymarketdecisions,e.g.,buyingacar. C.onlynon-marketdecisions,e.g.,watchingasunset. D.onlythepoor.ECON200TestBank:Principlesofeconomics 12.Chrishasaone-hourbreakbetweenclasseseveryWednesday.Chriscaneitherstayatthelibraryandstudyorgo tothegymandworkout.Thisis A.notaneconomicproblem,becauseneitheronecostsmoney. B.notaneconomicproblem,becauseit'sanhourthatiswastednomatterwhatChrisdoes. C.aneconomicproblembecausethetuitionChrispayscoversboththegymandthelibrary. D.aneconomicproblem,becausetheone-hourtimelimitmeansChrismustmakeachoice. 13.Joshwantstogotothefootballgamethisweekend,buthehasapaperdueonMonday.Itwilltakehimthewhole weekendtowritethepaper.Joshdecidedtostayhomeandworkonthepaper.Accordingtothescarcityprinciple,the reasonJoshdidn'tgotothegameisthat A.Joshprefersschoolworktofootballgames B.writingthepaperiseasierthangoingtothegame C.Joshdoesn'thaveenoughtimeforwritingthepaperandgoingtothegame D.it'stooexpensivetogotothegame 14.WhetherstudyingthesizeoftheU.S.economyorthenumberofchildrenacouplewillchoosetohave,the unifyingconceptisthatwantsare A.limited,resourcesarelimited,andthustradeoffsmustbemade. B.unlimited,resourcesarelimited,andthustradeoffsmustbemade. C.unlimited,resourcesarelimitedtosomebutnottoothersandthussomepeoplemustmaketradeoffs. D.unlimited,resourcesarelimited,andthusgovernmentneedstodomore. 15.Thecost-benefitprincipleindicatesthatanactionshouldbetaken A.ifthetotalbenefitsexceedthetotalcosts. B.iftheaveragebenefitsexceedtheaveragecosts. C.ifthenetbenefit(benefitminuscost)iszero. D.iftheextrabenefitisgreaterthanorequaltotheextracosts. 16.Whenapersondecidestopursueanactivityaslongastheextrabenefitsareatleastequaltotheextracosts,that personis A.violatingthecost-benefitprinciple. B.followingthescarcityprinciple. C.followingthecost-benefitprinciple. D.pursuingtheactivitytoolong. 17.Choosingtostudyforanexamuntiltheextrabenefit(improvedscore)equalstheextracost(mentalfatigue)is A.notrational. B.anapplicationofthecost-benefitprinciple. C.anapplicationofthescarcityprinciple. D.therelevantopportunitycost. 18.Thescarcityprincipleindicatesthat andthecost-benefitprincipleindicates . A.choicesmustbemade;howtomakethechoices B.choicesmustbemade;thecostscanneveroutweighthebenefitsofthechoices C.raregoodsareexpensive;thecostsshouldoutweighthebenefitsofthechoices D.raregoodsareexpensive;thecostscanneveroutweighthebenefitsofthechoices 19.Accordingtothecost-benefitprinciple, A.thelowestcostactivityusuallygivesthelowestbenefit. B.apersonshouldalwayschoosetheactivitywiththelowestcost. C.apersonshouldalwayschoosetheactivitywiththegreatestbenefit. D.theextracostsandbenefitsofanactivityaremoreimportantconsiderationsthanthetotalcostsandbenefits. 20.Arationalpersonisonewho A.isreasonable. B.makeschoicesthatareeasilyunderstood. C.possesseswell-definedgoalsandseekstoachievethem. D.ishighlycynical. 21.The7thglassofsodathatTimconsumeswillproduceanextrabenefitof10centsandhasanextracostofzero (Timiseatingatthecafeteria).Thecost-benefitprinciplepredictsthatTimwill A.realizehehashadtoomuchsodatodrinkandgohome. B.drinkthe7thglassandcontinueuntilthemarginalbenefitofdrinkinganotherglassofsodaiszero. C.volunteertoemptyoutthefountain. D.notdrinkthe7thglass. 22.Janiemusteithermowthelawnorwashclothes,earningherabenefitof$30or$45,respectively.Shedislikes bothequallyandtheybothtakethesameamountoftime.Janiewillthereforechooseto becausetheECON200TestBank:Principlesofeconomics economicsurplusis .ECON200TestBank:Principlesofeconomics A.mow;greater B.wash;greater C.mow;smaller D.wash;smaller 23.Deandecidedtoplaygolfratherthanprepareforhisexamineconomicsthatisthedayaftertomorrow.Onecan inferthat A.Deanhasmadeanirrationalchoice. B.Deanisdoingpoorlyinhiseconomicsclass. C.theeconomicsurplusfromplayinggolfexceededthesurplusfromstudying. D.thecostofstudyingwaslessthanthecostofgolfing. Larrywasacceptedatthreedifferentgraduateschools,andmustchooseone.EliteUcosts$50,000peryearanddid notofferLarryanyfinancialaid.LarryvaluesattendingEliteUat$60,000peryear.StateCollegecosts$30,000per year,andofferedLarryanannual$10,000scholarship.LarryvaluesattendingStateCollegeat$40,000peryear. NoNameUcosts$20,000peryear,andofferedLarryafull$20,000annualscholarship.Larryvaluesattending NoNameat$15,000peryear. 24.TheopportunitycostofattendingEliteUis A.$50,000 B.$10,000 C.$20,000 D.$15,000 25.TheopportunitycostofattendingStateCollegeis A.$30,000 B.$20,000 C.$15,000 D.$10,000 26.Larrymaximizeshissurplusbyattending A.EliteU,because$60,000isgreaterthanthebenefitattheotherschools. B.StateCollege,becausethedifferencebetweenthebenefitandcostisgreatestthere. C.NoNameU,becauseLarryhasafullscholarshipthere. D.EliteU,becausetheopportunitycostsofattendingEliteUarethelowest. 27.LarryhasdecidedtogotoEliteU.Hemusthave A.calculatedhissurplusfromeachchoiceandpickedtheonewiththehighestsurplus. B.underestimatedthebenefitsofattendingNoName. C.overestimatedthebenefitsofattendingEliteU. D.determinedtheopportunitycostofeachchoiceandpickedtheonewiththelowestopportunitycost. 28.Jenspendsherafternoonatthebeach,paying$1torentabeachumbrellaand$11forfoodanddrinksratherthan spendinganequalamountofmoneytogotoamovie.Theopportunitycostofgoingtothebeachis: A.the$12shespentontheumbrella,foodanddrinks. B.only$2becauseshewouldhavespentthemoneyonfoodanddrinkswhetherornotshewenttothebeach. C.themovieshemissedseeing. D.themovieshemissedseeingplusthe$12shespentontheumbrella,foodanddrinks. 29.Relativetoapersonwhoearnsminimumwage,apersonwhoearns$30perhourhas A.aloweropportunitycostofworkinglongerhours. B.ahigheropportunitycostoftakingadayoff. C.aloweropportunitycostofdrivingfarthertowork. D.thesameopportunitycostofspendingtimeonleisureactivities. 30.Theopportunitycostofanactivityisthevalueof A.analternativeforgone. B.thenext-bestalternativeforgone. C.theleast-bestalternativeforgone. D.thedifferencebetweenthechosenactivityandthenext-bestalternativeforgone. 31.Amyisthinkingaboutgoingtothemoviestonight.Aticketcosts$7andshewillhavetocancelherdog-sittingjob thatpays$30.Thecostofseeingthemovieis A.$7. B.$30. C.$37. D.$37minusthebenefitofseeingthemovie. 32.Economicsurplusis A.thebenefitgainedbytakinganaction.ECON200TestBank:Principlesofeconomics B.thepricepaidtotakeanaction. C.thedifferencebetweenthebenefitgainedandthecostincurredoftakinganaction. D.thewagesomeonewouldhavetoearninordertotakeanaction. 33.TheGovernorofyourstatehascutthebudgetfortheUniversityandincreasedspendingonMedicaid.Thisisan exampleof A.thepitfallofconsideringaveragecostsinsteadofmarginalcosts. B.poornormativeeconomicdecisionmaking. C.poorpositiveeconomicdecisionmaking. D.choiceinthefaceoflimitedresources. 34.Sallyearned$25,000peryearbeforeshebecameamother.Aftershebecameamothershetoldheremployer thatshewouldnotbewillingtoworkforanythinglessthan$50,000.Herdecisionisbasedon A.thehighcostofraisingachild. B.herdesiretosaveforherchild'scollegeexpenses. C.herincreasedvaluetoheremployer. D.thevaluesheplacesonspendingtimewithherchild. 35.Alexreceivedafour-yearscholarshiptoStateU.thatcoveredtuitionandfees,roomandboard,andbooksand supplies.Asaresult A.attendingStateU.forfouryearsiscostlessforAlex. B.AlexhasnoincentivetoworkhardwhileatStateU. C.thecostofattendingStateU.istheamountofmoneyAlexcouldhaveearnedworkingforfouryears. D.thecostofattendingStateU.isthesumofthebenefitsAlexwouldhavehadattendingeachofthefourother schoolstowhichAlexhadbeenadmitted. 36.SupposeMaryiswillingtopayupto$15,000forausedFordpick-uptruck,butshefindsonefor$12,000.Her is . A.benefit;$12,000 B.cost;$15,000 C.economicsurplus;$3,000 D.economicsurplus;$12,000 37.Ingeneral,rationaldecisionmakingrequiresonetochoosetheactionsthatyieldthe A.largesttotalbenefit. B.smallesttotalcost. C.smallestnetbenefit. D.largesteconomicsurplus. 38.Supposethemostyouwouldbewillingtopayforaplanetickethomeis$250,butyoubuyoneonlinefor$175. Theeconomicsurplusofbuyingtheonlineticketis: A.$175. B.$250. C.$75. D.$0. 39.Theuseofeconomicmodels,likethecost-benefitprinciple,meanseconomistsbelievethat A.thisisexactlyhowpeoplechoosebetweenalternatives. B.thisisareasonableabstractionofhowpeoplechoosebetweenalternatives. C.thosewhoexplicitlymakedecisionsthiswayaresmarter. D.withenougheducation,allpeoplewillstarttoexplicitlymakedecisionsthisway. 40.Jennadecidestoseeamoviethatcosts$7fortheticketandhasanopportunitycostof$20.Afterthemovie,she saystooneofherfriendsthatthemoviewasnotworthit.Apparently, A.Jennafailedtoapplythecost-benefitmodeltoherdecision. B.Jennawasnotrational. C.Jennaoverestimatedthebenefitsofthemovie. D.Jennaunderestimatedthebenefitsofthemovie. 41.Mostofusmakesensibledecisionsmostofthetime,because A.weknowthecost-benefitprinciple. B.subconsciouslyweareweighingcostsandbenefits. C.mostpeopleknowaboutthescarcityprinciple. D.weconducthypotheticalmentalauctionswhenwemakedecisions. 42.Supposeapersonmakesachoicethatseemsinconsistentwiththecost-benefitprinciple.Whichofthefollowing statementsrepresentsthemostreasonableconclusiontodraw? A.Theperson(explicitlyorimplicitly)over-estimatedthebenefitsorunder-estimatedthecostsorboth. B.Thecost-benefitprincipleisrarelytrue. C.Thepersondoesnotgrasphowdecisionsshouldbemade.ECON200TestBank:Principlesofeconomics D.Thepersonissimplyirrational. 43.Economicmodelsareintendedto A.applytoallexamplesequallywell. B.eliminatedifferencesinthewaypeoplebehave. C.generalizeaboutpatternsindecision-making. D.distinguisheconomicsstudentsfromeveryoneelse. 44.Economicmodelsclaimtobea(n) A.reasonableabstractionofhowpeoplemakechoices,highlightingthemostimportantfactors. B.exactreplicationofthedecision-makingprocesspeopleuse. C.interestingchalkboardexercisewithlittleapplicabilitytotherealworld. D.exceptionallyaccuratemethodofpredictingnearlyallbehaviorofeveryone. 45.Thecost-benefitmodelusedbyeconomistsis A.unrealisticbecauseitistoodetailedandspecifictoapplytoavarietyofsituations. B.unrealisticbecauseeveryonecanthinkoftimeswhenheorsheviolatedtheprinciple. C.usefulbecauseeveryonefollowsitallofthetime. D.usefulbecausemostpeoplefollowitmostofthetime. 46.Barryownsaclothingstoreinthemallandhasaskedtwoeconomicconsultantstodevelopmodelsofconsumer behaviorthathecanusetoincreasesales.Barryshouldchoosethemodelthat A.doesnotincludesimplifyingassumptions. B.isthemostdetailedandcomplex. C.assumesthatconsumersapplythecost-benefitprinciple. D.predictsthatconsumerswillalwayspreferBarry'sstoretothecompetingstores. 47.Economistsuseabstractmodelsbecause A.everyeconomicsituationisunique,soitisimpossibletomakegeneralizations. B.everyeconomicsituationisessentiallythesame,sospecificdetailsareunnecessary. C.theyareusefulfordescribinggeneralpatternsofbehavior. D.computershaveallowedeconomiststodevelopabstractmodels. 48.Mostpeoplemakesomedecisionsbasedonintuitionratherthancalculation.Thisis A.irrational,becauseintuitionisoftenwrong. B.consistentwiththeeconomicmodelofdecision-making,becausecalculatingcostsandbenefitsleadstodecision- makingpitfalls. C.consistentwiththeeconomicmodelbecausepeopleintuitivelycomparetherelativecostsandbenefitsofthe choicestheyface. D.inconsistentwiththeeconomicmodelbutrational,becauseintuitiontakesintoaccountnon-financial considerations. 49.Moehasabigexamtomorrow.Heconsideredstudyingthisevening,butdecidedtogooutwithCurlyinstead. SinceMoealwayschoosesrationally,itmustbetruethat A.theopportunitycostofstudyingtonightislessthanthevalueMoegetsfromspendingtimewithCurly. B.theopportunitycostofstudyingtonightisequaltothevalueMoegetsfromspendingtimewithCurlyminusthecost ofearningalowgradeontheexam. C.MoegetsmorebenefitfromspendingtimewithCurlythanfromstudying. D.MoegetslessbenefitfromspendingtimewithCurlythanfromstudying. 50.Ifonefailstoaccountforopportunitycostsindecisionmaking,thenapplyingthecost-benefitrulewillbeflawed because A.thebenefitswillbeoverstated. B.thecostswillbeunderstated. C.thebenefitswillbeunderstated. D.thecostswillbeoverstated. YourclassmatesfromtheUniversityofChicagoareplanningtogotoMiamiforspringbreak,andyouareundecided aboutwhetheryoushouldgowiththem.Theround-tripairfaresare$600,butyouhaveafrequent-flyercouponworth $500thatyoucouldusetopaypartoftheairfare.Allothercostsforthevacationareexactly$900.Themostyou wouldbewillingtopayforthetripis$1400.Youronlyalternativeuseforyourfrequent-flyercouponisforyourtripto Atlantatwoweeksafterthebreaktoattendyoursister'sgraduation,whichyourparentsareforcingyoutoattend.The Chicago-Atlantaround-tripairfaresare$450. 51.Ifyoudonotusethefrequent-flyercoupontofly,shouldyougotoMiami? A.Yes,yourbenefitismorethanyourcost B.No,yourbenefitislessthanyourcost C.Yes,yourbenefitisequaltoyourcost D.No,becausetherearenobenefitsinthetripECON200TestBank:Principlesofeconomics 52.WhatistheopportunitycostofusingthecouponfortheMiamitrip? A.$100 B.$450 C.$500 D.$550 53.Ifyouusethefrequent-flyercoupontoflytoAtlanta,wouldyougetanyeconomicsurplusbymakingthetrip? A.No,thereisalossof$50. B.Yes,surplusof$350. C.Yes,surplusof$400. D.Yes,surplusof$100. 54.IftheChicago-Atlantaround-tripairfareis$350,shouldyougotoMiami? A.No,thereisalossof$50. B.No,thereisalossof$100. C.Yes,thereiseconomicsurplusof$50. D.Yes,thereiseconomicsurplusof$400. 55.Patearns$25,000peryear(aftertaxes),andPat'sspouse,Chris,earns$35,000(aftertaxes).Theyhavetwopre- schoolchildren.Childcarefortheirchildrencosts$12,000peryear.Pathasdecidedtostayhomeandtakecareofthe children.Patmust A.valuespendingtimewiththechildrenbymorethan$25,000. B.valuespendingtimewiththechildrenbymorethan$12,000. C.valuespendingtimewiththechildrenbymorethan$13,000. D.valuespendingtimewiththechildrenasmuchthandoesChris. Youpaid$35foraticket(whichisnon-refundable)toseeJAM,alocalrockband,inconcertonSaturday.(Assume thatyouwouldnothavebeenwillingtopayanymorethan$35forthisconcert.)Yourbosscalledandsheislooking forsomeonetocoverashiftonSaturdayatthesametimeasyourconcert.Youwillhavetowork4hoursandshewill payyoutimeandahalf,whichis$9/hr. 56.ShouldyougototheconcertinsteadofworkingSaturday? A.Yes,yourbenefitismorethanyourcost B.No,yourbenefitislessthanyourcost C.Yes,yourbenefitisequaltoyourcost D.No,becausetherearenobenefitsintheconcert 57.Whatistheopportunitycostofgoingtotheconcert? A.$1 B.$9 C.$35 D.$36 58.Whatisyouropportunitycost,ifyougotoworkonSaturday? A.$0 B.$9 C.$35 D.$36 59.YoureconomicsurplusofgoingtoworkonSaturdayis A.$0 B.$1 C.$35 D.$36 Matthasdecidedtopurchasehistextbooksforthesemester.HisoptionsaretopurchasethebooksviatheInternet withnextdaydeliverytohishomeatacostof$175,ortodrivetocampustomorrowtobuythebooksattheuniversity bookstoreatacostof$170.Lastweekhedrovetocampustobuyaconcertticketbecausetheyoffered25percentoff theregularpriceof$16. 60.Matt'sbenefitofbuyinghisbooksatthebookstoreis. A.$5 B.$9 C.$170 D.$175 61.Matt'sbenefitwasfromdrivingtocampustobuytheconcertticketlastweek. A.$2 B.$4 C.$9ECON200TestBank:Principlesofeconomics D.$16 62.Accordingtothecost-benefitprinciple: A.itwouldnotberationalforMatttodrivetocampustopurchasethebooksbecausethe$5savingisonlytwo percentofthecostofthebooks,andthatismuchlessthanthe25percenthesavedontheconcertticket. B.itwouldberationalforMatttodrivetocampusbecauseitcostslesstobuythebookstherethanviatheInternet. C.itwouldberationalforMatttodrivetocampusbecausethe$5savingismorethanhesavedbydrivingtheretobuy theconcertticket. D.itwouldnotberationalforMatttodrivetocampustopurchasethebooksbecausethecostofgasandhistime mustcertainlybemorethanthe$5hewouldsave. 63.AssumetheminimumthatMattwouldbewillingtoaccepttodrivetotheuniversitycampusisequaltotheamount hesavedontheconcertticket.Whatwouldbetheamountofhiseconomicsurplusifheboughthistextbooksatthe universitybookstoreratherthanviatheInternet? A.$5 B.$1 C.$50 D.$20 64.Themarginalbenefitofanactivityisthe A.sameasthetotalbenefitsoftheactivity. B.totalbenefitdividedbytheleveloftheactivity. C.extrabenefitassociatedwithanextraunitoftheactivity. D.totalbenefitassociatedwithanextraunitoftheactivity. 65.Ifthemarginalcostsof1,2,and3hoursoftalkingonthephoneare$50,$75,and$105,thenthetotalcostsare A.$50,$150,and$315. B.$50,$41.67,and$115. C.$50,$125,and$230. D.$50,$175,and$405. 66.Ifthetotalbenefitsofwatching1,2,and3baseballgamesonTVare100,120,and125thenthemarginalbenefits are A.100,120,and125. B.100,20,and5. C.100,609,and41.67. D.100,240,and375. 67.Theextrabenefitthatcomesfromanextraunitofactivityiscalledthe oftheactivity. A.marginalbenefit. B.marginalcost. C.averagebenefit. D.reservationbenefit. 68.Themarginalcostofanactivityisthe A.changeinthecostoftheactivitythatresultsfromanextraunitoftheactivity. B.sameasthetotalcostoftheactivity. C.ratiooftotalcosttotheleveloftheactivity. D.changeintheleveloftheactivitydividedbythechangeinthecostoftheactivity. 69.Theextracostthatresultsfromanextraunitofanactivityisthe A.marginalbenefit. B.marginalcost. C.reservationcost. D.sameastheopportunitycost. 70.Dividingthetotalcostofnunitsofanactivitybynrevealsthe A.averagebenefit. B.marginalcost. C.unitspercost. D.averagecost. 71.Youhadtopay$600(non-refundable)foryourmealplanfortheFallsemesterwhichgivesyouupto150meals.If youeatallofthemeals,youraveragecostforamealequals A.$6. B.$5. C.$4. D.$0.25. 72.Youhadtopay$600(non-refundable)foryourmealplanforFallsemesterwhichgivesyouupto150meals.IfyouECON200TestBank:Principlesofeconomics eatonly100meals,youraveragecostforameal A.$6. B.$5. C.$4. D.$0.25. 73.Youhadtopay$600(non-refundable)foryourmealplanforFallsemesterwhichgivesyouupto150meals.Ifyou eatonly100meals,yourmarginalcostforthe100thmealis A.$6 B.$4 C.$0.25 D.$0 74.Theaveragebenefitofanactivityisthe A.totalbenefitoftheactivitydividedbythenumberofunits. B.numberofunitsdividedbythetotalbenefitoftheactivity. C.numberofunitstimesthetotalbenefitoftheactivity. D.extrabenefitforoneadditionalunitoftheactivity. 75.Yousave$10ongaseveryweeksinceyouliveclosetothebusstop.Youhaveclassfivedaysaweek.Whatis youraveragebenefitperdayforlivingclosetothebusstop? A.$10 B.$5 C.$2 D.$1.43 76.Yourscholarshipdependsonyourmaintaininga3.5cumulativeGPA.YourGPAforlastsemesterwas3.6,which broughtyourcumulativeGPAdown.Whatmustbetrue? A.Yourmarginalgrades(lastsemester'sgrades)werehigherthanyouroverallGPA. B.YourmarginalgradeswerelowerthanyouroverallGPA. C.Ifthissemester'sgradesarethesameaslastsemester's,youroverallGPAwillstaythesame. D.Ifthissemester'sgradesarethesameaslastsemester's,youmightloseyourscholarship. 77.Refertothefigureabove.Theaveragecostof4unitsofactivityis A.$20 B.$25 C.$30 D.$40 78.Refertothefigureabove.Themarginalcostofthe3rdunitofactivityis A.$30 B.$25 C.$20 D.$10 79.Refertothefigureabove.Theaveragebenefitof3unitsofactivityis A.$80 B.$60 C.$40 D.$20 80.Refertothefigureabove.Themarginalbenefitofthe5thunitofactivityis A.$60 B.$50 C.$5 D.$0 81.Refertothefigureabove.Accordingtothecost-benefitprinciple,thelevelofactivitythatprovidesthelargestnet benefitis A.1 B.3 C.4 D.6 AACSB:AnalyticalSkills Blooms:Application Frank-Chapter001#81 LearningObjective:1-6ECON200TestBank:Principlesofeconomics Section:ThreeImportantDecisionPitfallsECON200TestBank:Principlesofeconomics 82.Refertothefigureabove.Theaveragecostof5unitsofactivityis A.$1 B.$2 C.$3 D.$4 83.Refertothefigureabove.Themarginalcostofthe4thunitofactivityis A.$1 B.$2 C.$3 D.$4 84.Refertothefigureabove.Theaveragebenefitof4unitsofactivityis A.$4 B.$5 C.$6 D.$10 85.Refertothefigureabove.Themarginalbenefitofthe6thunitofactivityis A.$1 B.$2 C.$4 D.$10 86.Refertothefigureabove.Accordingtothecost-benefitprinciple,thelevelofactivitythatprovidesthelargestnet benefitis A.1 B.4 C.5 D.7 87.Refertothefigureabove.Totaldonationsraisedbythreeemployeesis A.$43,899. B.$45,000. C.$48,911. D.$51,963. 88.Refertothefigureabove.Thetotallaborcostof4employeesis A.$21,500. B.$22,000. C.$38,000. D.$43,121. 89.Refertothefigureabove.ThePresidentofWhat'sAMatterUdecidestohirefundraisersaslongastheaverage benefitexceedstheaveragecost,resultingin employeesbeinghiredandanetbenefit(totaldonations minustotallaborcosts)of . A.5;$17,080 B.5;$67,080 C.4;$60,000 D.4;$22,000 90.Refertothefigureabove.Themarginalbenefit(extradonations)ofthe2ndemployeeis A.$42,426. B.$21,213. C.$12,426. D.$11,337. 91.Refertothefigureabove.Themarginallaborcost(extralaborcost)ofthe4themployeeis A.$9,500. B.$10,750. C.$11,000. D.$13,000. 92.Refertothefigureabove.TheChairmanoftheEconomicsDepartmentatWhat'sAMatterUsaysthatfundraisers shouldbehiredaslongastheirmarginaldonationsexceedtheirmarginallaborcosts.Followingthiscriterion, employeesarehiredandnetbenefitsare . A.1;$22,000 B.2;$25,426 C.3;$25,426ECON200TestBank:Principlesofeconomics D.2;$3,476 93.Refertothefigureabove.Thenetbenefitofhiringfundraisersislargestwhen employeesarehired. A.4 B.3 C.2 D.1 94.GingerboughtanMP3playerthatcamewitha$10rebate.Gingershouldfilloutandmailintherebateformif A.theopportunitycostofthetimeandtroubleofsendingintherebateformsislessthan$10. B.theopportunitycostofthetimeandtroubleofsendingintherebateformsismorethan$10. C.shewouldhaveboughttheMP3playerwithouttherebate,andsosendingintherebateinvolvesnoopportunity cost. D.Ginger'ssurplusfrompurchasingtheMP3playerwaslessthan$10. 95.Tonynotesthatanelectronicsstoreisofferingaflat$20offallpricesinthestore.Tonyreasonsthatifhewantsto buysomethingwithapriceof$50thatitisagoodoffer,butifhewantstobuysomethingwithapriceof$500itisnota goodoffer.Thisisanexampleof A.inconsistentreasoning;saving$20issaving$20. B.theproperapplicationofthecost-benefitprinciple. C.rationalchoicebecauseinthefirstcasehesaves40%andinthesecondcasehesaves4%. D.marginalcostequalsmarginalbenefitthinking. 96.Supposearetailstorewasoffering10%offallpricesonallgoods.Theincentivetotakeadvantageofthe10% savingsis A.unrelatedtothelistpriceofonegood. B.inverselyrelatedtothelistpriceofthegood. C.directlyrelatedtothelistpriceofthegood. D.independentofthelistprice. IBMemploysPamtoassemblepersonalcomputers.Pamcanassemble1computerifsheworks1hour,4computers in2hours,8computersin3hours,10computersin4hours,and11computersin5hours.Eachcomputerconsistsof amotherboardthatcosts$200,aharddrivethatcosts$100,acasethatcosts$20,amonitorthatcosts$200,a keyboardat$60andamousethatcosts$20.ThecostofemployingPamis$40perhour. 97.WhatisthemarginalcostofproducingthecomputersPamassemblesduringher3rdhourofwork? A.$1,200 B.$1,240 C.$2,400 D.$2,440 98.WhatisthemarginalcostofproducingthecomputersPamassemblesduringher4thhourofwork? A.$1,200 B.$1,240 C.$2,400 D.$2,440 99.IBMsellseachcomputerfor$620.HowmanyhoursshouldIBMemployPamtomaximizeitsbenefitfromher employment? A.1hour B.2hours C.3hours D.4hours 100.IBMsellseachcomputerforcomputers$640.HowmanyhoursshouldIBMemployPamtomaximizeitsbenefit fromheremployment? A.2hours B.3hours C.4hours D.5hours 101.IfJaneworksfor6hoursshecanrent12apartments,andifsheworksfor7hoursshecanrent15apartments. Themarginalbenefitofthe7thhourofJane'sworkequals: A.12apartments. B.15apartments. C.1apartment. D.3apartments.ECON200TestBank:Principlesofeconomics Thefollowingtableshowstherelationshipbetweenthespeedofacomputer'sCPUandthebenefitsandcosts.ECON200TestBank:Principlesofeconomics Assumethatallotherfeaturesofthecomputerarethesame,i.e.,CPUspeedistheonlysourceofvariation. 102.Themarginalbenefitofupgradingfroma600Mhzcomputertoa700Mhzcomputeris A.$1,500. B.$500. C.$50. D.$5. 103.Thetotalbenefitofan800Mhzcomputeris A.$400. B.$800. C.$1,900. D.$2,200. 104.Thetotalcostofa700Mhzcomputeris A.$1,000. B.$900. C.$200. D.$100. 105.Themarginalcostofupgradingfroma700toan800Mhzcomputeris A.$500. B.$400. C.$200. D.$100. 106.Applicationofthecost-benefitprinciplewouldleadonetopurchasea computerbecause . A.900Mhz;thetotalbenefitexceedsthetotalcost B.700Mhz;themarginalbenefitis$500andthemarginalcostis$100 C.600Mhz;itiscertainlyfastenough D.800Mhz;themarginalbenefitsandmarginalcostsareequal 107.Choosingthe1,000Mhzcomputerwouldbeinefficientbecause A.themarginalbenefitislessthanthemarginalcost. B.themarginalbenefitisequaltothemarginalcost. C.itisimpossibletotellthedifferencecomparedtoa600Mhzcomputer. D.themarginalbenefitismorethanthemarginalcost. 108.JackhasatickettoseeBoBiceforwhichhepaid$30yesterday.Hetakesanunpaiddayofffromworktoget readyfortheconcert.Whenhearrivesattheconcert,5differentpeopleofferhim$70forhisticket.ThecosttoJackof seeingBoBiceis A.$30. B.$40. C.$70. D.$70plushisforgoneearnings. 109.CatherineandNancybothownhomeswithsimilarsizelawns.CatherinemowsherownlawnwhileNancyhires someonetomowhers.Assumebothwomenarerationaldecisionmakers.Whichisthebestexplanationofthe differentdecisionstheymake? A.TheopportunitycostofNancy'stimeishigherthanhercosttohiresomeonetomowthelawn. B.NancycangetherlawnmowedforlessthanCatherine. C.Nancydoesn'townalawnmower. D.NancyearnsmorethanCatherinedoes. 110.Whatistheopportunitycostoflivinginahousethatyoualreadyown? A.Zero,becauseyoualreadyownit. B.Thatmostlydependsoncurrentmortgagerates. C.Therentyoucouldreceiveifyourentedthehouseouttosomeoneelse. D.Thetaxesyoupayyourlocalgovernment. 111.Jodyhaspurchasedanon-refundable$25tickettoattendaSavageGardenconcertonFridayevening. Subsequently,sheisaskedtogotodinneranddancingatnoexpensetoher.Ifsheusescost-benefitanalysisto choosebetweengoingtotheconcertandgoingonthedate,sheshould A.includeonlytheentertainmentvalueoftheconcertintheopportunitycostofgoingonthedate. B.includethecostoftheticketplustheentertainmentvalueoftheconcertintheopportunitycostofgoingonthedate. C.includeonlythecostofconcertticketintheopportunitycostofgoingonthedate. D.includeneitherthecostoftheticketnortheentertainmentvalueoftheconcertintheopportunitycostofgoingon thedate.ECON200TestBank:Principlesofeconomics Seanstudied5hoursforhisfirstEconomicstestandhistestscorewas85;6hoursforhissecondEconomicstest andscored90;and7hoursforhisthirdEconomicstestandscored95.Healsostudied5hoursforhisfirstMathtest andhistestscorewas68;6hoursforhissecondMathtestandscored78;and7hoursforhisthirdMathtestand scored88. 112.TheaveragebenefitperhourstudiedfortheEconomicstestswas andtheaveragebenefitperhour studiedfortheMathtestswas . A.15;13 B.5;10 C.13;15 D.10;5 113.Sean'smarginalbenefitfromtheseventhhourspentstudyingEconomicsis A.5 B.10 C.15 D.45 114.Sean'smarginalbenefitfromtheseventhhourspentstudyingMathis: A.5 B.10 C.15 D.78 115.IfSeanhasalreadyspent5hoursstudyingEconomicsand5hoursstudyingMath,heshouldspendthenext hour A.StudyingMathforhalfanhourandEconomicsforhalfanhour B.StudyingonlyEconomics C.StudyingonlyMath D.StudyingEconomicsfor45minutesandMathfor15minutes YouneedaTV,DVDplayer,andCDplayer.ThesaleflyeryougotinthemailshowstheTVthatyouwanttobuyis 10%offregularpricethisweek.DVDandCDplayersare20%offnextweek.Lastweekyoudrovedowntowntosave $30onsomeconcerttickets,a15%savings.TheregularpricesforTVs,DVDplayers,andCDplayersare: 116.ShouldyoudrivedowntownnextweektobuytheDVDplayerandtheCDplayer? A.Yes,becauseyouwillsave$32 B.No,becauseyouwillsavelessthan$30 C.Yes,becauseyouwillsave$64 D.Yes,becauseitisalwaysworthittodrivedowntowntoearna20%discount 117.IftheregularpricefortheTVis$300,shouldyoudrivedowntowntobuytheTVthisweek? A.Yes,becauseyouwillsave$30. B.No,becausenextweek'sdiscountontheDVDplayerandCDplayerwillsaveyouevenmore. C.Yes,becauseyouwillsave$60. D.Yes,becauseitisalwaysworthittodrivedowntowntoearna10%discount. 118.SupposeinsteadthattheDVDplayeris20%offandtheCDplayeris5%offregularprice.Shouldyoudrive downtowntobuytheVCRandtheCDplayer? A.Yes,becauseyouwillsave$24. B.Yes,becauseyouwillsave$34. C.Yes,becauseyouwillsave$64. D.Yes,becauseitisalwaysworthittodrivedowntowntoearna20%discount. Youownapizzashopcalled"Pizza'R'Us".Currentlyyouarepayingyourcooksanhourlywageof$20.Yousella mediumpizzafor$10apie.Byhiringmorecooks,youcanincreaseyourpizzaproductionasshowninthefollowing table. 119.Whatisthetotalcostperdayofhiring3cooksiftheywork8hourshifts? A.$60 B.$160 C.$320 D.$480 120.Whatisthedollarvalueoftotalproductioneach8-hourshiftifyouhire2cooks? A.$320 B.$560 C.$70 D.$140ECON200TestBank:Principlesofeconomics 121.Whatistheaveragelaborcostperpizzaifyouhire4cooks? A.$6 B.$8 C.$10 D.$12 122.Whatistheaveragebenefitperpizzaifyouhire2cooks? A.$4 B.$6 C.$8 D.$10 123.Ifyouoperateonehoureverydaywhatisthemarginalcostofthe3rdcook? A.$10 B.$20 C.$40 D.$60 124.Ifyouoperateonehoureverydaywhatisthemarginalbenefitofthe3rdcook? A.$10 B.$20 C.$30 D.$40 125.Howmanycooksshouldyouhiretomaximizeyournetbenefit? A.1 B.3 C.4 D.5 126.Microeconomicsisdistinguishedfrommacroeconomicsinthatmicroeconomicsfocuseson A.theperformanceofthenationaleconomy. B.theoverallpricelevel. C.choicesmadebyindividualsorgroupsinthecontextofindividualmarkets. D.howtoimprovetheperformanceofthenationaleconomy. 127.Macroeconomicsisdistinguishedfrommicroeconomicsbyitsconcentrationon A.choices. B.theperformanceofnationaleconomiesandwaystoimproveupontheirperformance. C.individualmarkets. D.thelevelofpricesinspecificmarkets. 128.Thestudyofindividualchoicesandgroupbehaviorinindividualmarketsdefines A.microeconomics. B.economics. C.thescarcityprinciple. D.macroeconomics. 129.Whichbranchofeconomicsismostlikelytostudydifferencesincountries'growthrates? A.microeconomics B.normativeeconomics C.macroeconomics D.experimentaleconomics 130.Whichofthefollowingdecisionswouldnotbepartofmicroeconomics? A.Howtomakethelargestprofit. B.WhethertostudyorwatchTVtonight. C.HowanearlyfreezeinCaliforniawillaffectthepriceoffruit. D.Whetherthefederalbudgetshouldalwaysbebalanced. 131.Whichofthefollowingquestionswouldnotbepartofmacroeconomics? A.Whatcausedthegreatdepression? B.AtwhatratedoestheUSeconomytypicallygrow? C.DidthesharpincreaseingasolinepricesalterSUVsales? D.Howdoesgovernmentspendingaffecttheeconomy? 132.Byconventiontherearetwomajordivisionsofeconomics,called A.marginalbenefitandmarginalcost. B.reservationpriceandopportunitycost.ECON200TestBank:Principlesofeconomics C.microeconomicsandmacroeconomics.ECON200TestBank:Principlesofeconomics D.rationaleconomicsandirrationaleconomics. 133.Thestudythatdealswiththesalariesofuniversityprofessorswouldbeconsidered A.macroeconomics B.microeconomics C.economicnaturalism D.marginalbenefit 134.StudyinghowPatallocateshertimebetweenteachingclassesandassistingundergradstudentsisanexample of A.microeconomics B.macroeconomics C.individualeconomics D.economicnaturalism 135.IndecidingthenumberofguitarstobuyforhisshopbeforetheChristmasseason,Markismakinga(n) decision. A.microeconomic B.macroeconomic C.economicsurplus D.marginalchoice 136.Studyinggovernmentpoliciestowardsbuildingnewroadsandhighwaysis A.microeconomics B.macroeconomics C.governmenteconomics D.marginaleconomics 137.Lastyearinterestratesfell.Itwasthefocusof A.microeconomics B.macroeconomics C.economicnaturalism D.marginaleconomics 138.Positiveeconomicprinciplesarethosethat A.arealwayscorrect. B.arenotinfluencedbypoliticalideology. C.predicthowpeopleshouldbehave. D.predicthowpeoplewillbehave. 139.Onethingthatdistinguishesnormativeprinciplesfrompositiveprinciplesisthat A.normativeprinciplesarepessimisticandpositiveprinciplesareoptimistic. B.normativeprinciplesreflectthesocialnormsofthecommunity,andpositiveprinciplesreflectuniversaltruths. C.normativeprinciplestellushowpeopleshouldmakeeconomicdecisions,andpositiveprinciplestellushowpeople actuallydomakedecisions. D.normativeprinciplestellushowpeopleactuallymakeeconomicdecisions,andpositiveprinciplestellushow peopleshouldmakedecisions. 140.Normativeeconomicsisconcernedwithhowpeoplemakedecisionswhilepositiveeconomicsis concernedwithhowpeoplemakedecisions. A.intherealworld;inmodels B.should;do C.inpower;inordinarylife D.inordinarylife;inpower 141.Aneditorialinthepaperarguesthatstudentsshouldonlybeallowedtoattendschoolsolongasthemarginal costofeducatingthatstudentislessthanthemarginalbenefitofthatstudent'seducation.Thewriter'sreasoningisan applicationof A.positiveeconomics. B.negativeeconomics. C.normativeeconomics. D.economicnaturalism. 142.Theincentiveprinciplestatesthatapersonismorelikelytodosomethingif A.theopportunitycostsarehigh. B.thebenefitsfromdoingitincrease. C.everyoneelseisdoingthesamething. D.heispaidtodoit. 143.TheincentiveprincipleisanexampleofECON200TestBank:Principlesofeconomics A.aneconomicdecision-makingpitfall B.over-estimatingthebenefitsofanaction. C.apositiveeconomicprinciple. D.anormativeeconomicprinciple. 144.Ifthegovernmentwantedtousetheincentiveprincipletodiscouragesmoking,itwould A.publicizethehealthrisksassociatedwithsecond-handsmoke. B.increasetaxesoncigarettes,raisingthepriceofapack. C.subsidizehospitalsfortreatinglungdisease. D.investmoremoneyinhealthresearch. 145.Accordingtotheincentiveprinciple, A.itisirrationaltoperformvolunteerservices. B.peoplewillalwaystakethehighest-payingjob. C.benefitsaremoreimportantthancostsinmakingadecision. D.peopletendtodomoreofsomethingwhenthebenefitsaregreater. 146.Aneconomicnaturalistisdescribedassomeonewho A.useseconomicargumentstoprotectforestsandwetlandsfromdevelopment. B.hasanaturaltalentfordrawinggraphs. C.applieseconomicinsightstoeverydaylife. D.studiestheprocessofnaturalselectioninamarginalcostandmarginalbenefitframework. 147.WithATMsitispossibletoretrievecashfromthebankatanytime.Onehundredyearsago,onecouldonlyget cashfromthebankduringbusinesshours,say,9amto3pm.Thedifferenceisbecause A.flexibilitywasnotvalued100yearsago. B.itwasimpossibletoprovide24houradayservice100yearsago. C.thecostofproviding24houradayserviceismuchlowertoday. D.governmentforcedbankstobecomemoreconvenient. 148.ThenumberofUShouseholdswithaccesstotheInternetandthosewithbroadbandconnectionsisgrowing rapidly.Asaneconomicnaturalist,onecouldpredictthatwhenamajorpurchaseisbeingconsidered,familieswill A.alwaysbuyonline. B.neverbuyonline. C.collectmoreinformationbeforemakingthepurchasebecausethecostoffindingandacquiringitislower. D.collectmoreinformationbeforemakingthepurchasebecausethebenefitofinformationisnowlarger. 149.Everytimeyougotothegrocerystore,youtrytochoosetheshortestline.Butallofthelinesalwaysseemtobe thesamelength.Why? A.Thestoremanagertellsthecashierstospeeduporslowdowntomaintainequallinelengths. B.Everyoneelseistryingtochoosetheshortestline,too. C.Thecashiersallworkatthesamespeed. D.Cashiersdonothaveanincentivetoworkfaster.ECON200TestBank:Principlesofeconomics Chapter02-ComparativeAdvantage 1.Tosaythatanindividualpossessesanabsoluteadvantageintheproductionofsoftwaremeansthatindividual A.hasaloweropportunitycostofproducingsoftware. B.canproducemoreand/orhigherqualitysoftwareinagivenamountoftime. C.wasthefirsttocreatethesoftware. D.chargesthelowestpriceforsoftware. 2.IfScouthasanabsoluteadvantageoverDill, A.ScouthasmoremoneythanDill. B.theproblemofscarcityappliestoDillbutnottoScout. C.theproblemofscarcityappliestoScout,butnottoDill. D.ScoutcanaccomplishmoreinagivenperiodoftimethancanDill. 3.IfLesliecanproducetwopairsofpantsinanhourwhileEvacanmakeonepairanhour,thenitmustbethecase that A.Lesliehasacomparativeadvantage. B.Lesliehasanabsoluteadvantage. C.Evahasacomparativeadvantage. D.Lesliehasbothcomparativeandabsoluteadvantage. 4.Ifanationcanproduceagoodmorequicklythananyothernation,thatnationhasa(n) A.comparativeadvantage. B.absoluteadvantage. C.relativeadvantage. D.specializationadvantage. 5.Havingacomparativeadvantageinaparticulartaskmeansthat A.youarebetteratitthanotherpeople. B.yougiveupmoretoaccomplishthattaskthandoothers. C.yougiveuplesstoaccomplishthattaskthandoothers. D.youhavespecializedinthattask,whileothershavenot. 6.Larryhasacomparativeadvantageinwritingatermpaperifhe A.canwriteapaperfasterthantheotherstudentsinclass. B.hasanabsoluteadvantageinwritingatermpaper. C.alwaysearnsanAonhispapers. D.hasalowopportunitycostforwritingatermpaper. 7.Ifanationhasthelowestopportunitycostofproducingagood,thatnationhasa(n) A.comparativeadvantage. B.absoluteadvantage. C.comparativeandabsoluteadvantage. D.absoluteadvantageandpossiblyacomparativeadvantage. 8.Whichofthefollowingstatementsisalwaystrue? A.Absoluteadvantageimpliescomparativeadvantage. B.Comparativeadvantagedoesnotrequireabsoluteadvantage. C.Absoluteadvantagerequirescomparativeadvantage. D.Comparativeadvantagerequiresabsoluteadvantage. 9.IfJanecanproduce3pairsofshoeshourly,whileBobcanproduce2,thenonecaninferthatthe advantagebelongsto . A.absolute;Jane B.comparative;Jane C.comparative;Bob D.comparativeandabsolute;Jane 10.Refertothefigureabove.Accordingtothedata,Coreyhasanabsoluteadvantagein A.theproductionofpizza. B.neitherproductionofpizzanordeliveringpizza. C.deliveringpizza. D.bothproductionofpizzaanddeliveringpizza.. 11.Refertothefigureabove.Accordingtothedata,Pathasanabsoluteadvantagein A.theproductionofpizza. B.neitherproductionofpizzanordeliveringpizza. C.deliveringpizza. D.bothproductionofpizzaanddeliveringpizza.ECON200TestBank:Principlesofeconomics 12.Refertothefigureabove.Corey'sopportunitycostofproducinganextrapizzaisdeliveringpizzas. A.2 B.3/2 C.2/3 D.1/2 13.Refertothefigureabove.Corey'sopportunitycostofdeliveringanextrapizzaisproducingpizzas. A.6 B.12 C.2 D.1/2 14.Refertothefigureabove.Pat'sopportunitycostofproducinganextrapizzaisdeliveringpizzas. A.3 B.2 C.3/2 D.2/3 15.Refertothefigureabove.Pat'sopportunitycostofdeliveringanextrapizzaisproducingpizzas. A.12 B.10 C.3/2 D.2/3 16.Refertothefigureabove.Thecomparativeadvantageforpizzaproductionbelongsto andthe comparativeadvantageforpizzadeliverybelongsto . A.Corey;Corey B.Pat;Pat C.Pat;Corey D.Corey;Pat 17.Basedontheircomparativeadvantages,Patshouldspecializein whileCoreyshouldspecializein A.pizzadelivery;pizzaproduction B.pizzaproduction;pizzadelivery C.neither;both D.both;neither LouandAlexlivetogetherandsharehouseholdchores.Theyliketocooksomemealsaheadandeatleftovers. SupposethatinonehourLouandAlexcandothefollowing: 18.Whichofthefollowingistrue? A.LouhasbothanabsoluteandcomparativeadvantageoverAlexinbothtasks. B.AlexhasacomparativeadvantageoverLouincleaning. C.LouhasacomparativeadvantageoverAlexincleaning. D.LouhasacomparativeadvantageoverAlexincooking. 19.AlexandLouhaveworkedoutanefficientarrangement.Underthatarrangement, A.AlexandLoueachspendahalfhouroncookingandahalfhouroncleaning. B.Alexspendsallofhistimeoncleaning,whileLoudoesallthecooking. C.Loudoesallofthecleaningandhalfofthecooking. D.Louspendsallofhistimeoncleaning,whileAlexdoesallthecooking 20.ForAlex,theopportunitycostofcleaningoneroomismeal(s);forLoutheopportunitycostofcleaningone roomismeal(s). A.4;4 B.1;4/5 C.1;5/4 D.3;5 Dent'nScratchUsedCarsandTrucksemploys3salesmen.Datafortheirsaleslastmonthareshowninthistable: 21. hasanabsoluteadvantageforsellingcarsand hasanabsoluteadvantageforselling trucks. A.Joe;Joe B.Larry;Ralph C.Ralph;Larry D.Larry;Joe 22.ForLarry,theopportunitycostofsellingatruckisECON200TestBank:Principlesofeconomics A.10fewercarssold. B.1/2carnotsold. C.1fewercarsold. D.2fewercarssold. 23.ForJoe,theopportunitycostofsellingatruckis: A.9fewercarssold. B.1fewercarsold. C.4fewercarssold. D.1/3carnotsold. 24.ForRalph,theopportunitycostofsellingatruckis: A.9fewercarssold. B.1/3carsold. C.3fewercarssold. D.1/4carnotsold. 25.Joe'sopportunitycostofsellingacaristhanRalph's,andJoe'sopportunitycostofsellingacaris thanLarry's. A.less;more B.more;less C.less;less D.more;more 26.shouldspecializeintrucksalesandshouldspecializeincarsales. A.Joe;Ralph B.Ralph;Larry C.Larry;Ralph D.Larry;Joe 27.ApplicationofthePrincipleofComparativeAdvantageleadsto A.greaterspecializationoflaborandotherfactorsofproduction. B.lesserspecializationoflaborandotherfactorsofproduction. C.societieswithoutanyspecializationoflabor. D.lowertotaloutput. 28.Thetextbooknotesthatthelasttimeamajorleaguebatterhit.400wasin1941.Thisisbecause A.theaveragequalityofbattershasfallen. B.theleagueimposesharshpenaltiesforsteroiduse. C.specializationbypitchers,infielders,andoutfieldershasmadeitharderforbatterstohit. D.baseballdiamondshavebecomelarger. 29.GingerandMaryannarelostinthejungle,wheretheonlythingstoeataremangoesandfish.Gingercangather mangoesfasterthanMaryannandcanalsocatchmorefishperhourthancanMaryann.Therefore, A.Gingershouldspecializeinfishingbecauseitisharderthangatheringmangoes,andMaryannshouldspecializein gatheringmangoes. B.Gingershouldstrikeoutonherown,becauseMaryannreducestheircombinedproductivity. C.Maryannshouldspecializeintheactivityforwhichshehasacomparativeadvantage. D.Gingershouldspecializeintheactivityforwhichshehasanabsoluteadvantage. 30.Ingeneral,individualsandnationsshouldspecializeinproducingthosegoodsforwhichtheyhavea(n) A.absoluteadvantage. B.comparativeadvantage. C.absolutelycomparativeadvantage. D.absoluteandcomparativeadvantage. 31.Ingeneral,individualsandnationsshouldspecializeinproducinggoods otherindividualsornations. A.thattheycanproducemorequicklythan B.thattheycanproducelessquicklythan C.forwhichtheyhavethelowestopportunitycostcomparedto D.forwhichtheyhavethehighestopportunitycostcomparedto 32.Acountrymayhaveacomparativeadvantageintheproductionofcarsif A.itimportsmostoftherawmaterialsnecessarytoproducecars. B.itscitizenspreferdrivingcarstootherformsoftransportation. C.ithasstrictenvironmentalprotectionlawsgoverningautomobileemissions. D.ithasthenaturalresourcesusedtoproducesteel. 33.TheUnitedStatesgenerallyhasacomparativeadvantageinthedevelopmentoftechnologybecauseofECON200TestBank:Principlesofeconomics A.largeramountsofnaturalresources.ECON200TestBank:Principlesofeconomics B.ahighconcentrationofthebestresearchuniversities. C.taxincentives. D.theexistenceofpatentlaw,whichnoothercountryprovides. 34.Agraphthatillustratesthemaximumamountofonegoodthatcanbeproducedforeverypossiblelevelof productionoftheothergoodistermeda(n) A.productionpossibilitiescurve. B.consumptionpossibilitiescurve. C.productionfunction. D.supplycurve. 35.Theproductionpossibilitiescurveshows A.theminimumproductionofonegoodforeverypossibleproductionleveloftheothergood. B.howincreasingtheinputsusedforonegoodincreasestheproductionoftheothergood. C.themaximumproductionofonegoodforeverypossibleproductionleveloftheothergood. D.howincreasingtheproductionofonegoodallowsproductionoftheothergoodtoalsorise. 36.Theproductionpossibilitiescurveis A.theboundarythatdividesallproductioncombinationsintoefficientandinefficientones. B.agraphillustratingtheproductioncombinationssocietywouldliketochoose. C.theboundarythatdividesallproductioncombinationsintoattainableonesandunattainableones. D.agraphillustratingsupplycurvesfordifferentcombinationsofoutput. ThisgraphdescribestheproductionpossibilitiesontheislandofGenovia: 37.TheopportunitycostofproducingonecarinGenoviais A.5,000tonslessofagriculturalproducts. B.500tonslessofagriculturalproducts. C.5tonslessofagriculturalproducts. D.50tonslessofagriculturalproducts. 38.TheopportunitycostofproducingonetonofagriculturalproductsinGenoviais A.1,000fewercars. B.1fewercar. C.1/5fewercar. D.1/50fewercar. 39.Assumingefficientproduction,If500carsareproducedinGenovia A.50,000tonsofagriculturalproductsarebeingproduced. B.25,000tonsofagriculturalproductsarebeingproduced. C.45,000tonsofagriculturalproductsarebeingproduced. D.40,000tonsofagriculturalproductsarebeingproduced. 40.Theslopeoftheproductionpossibilitiescurvemustbe A.positive. B.decreasing. C.increasing. D.negative. 41.Theslopeofanyproductionpossibilitiescurveis because . A.negative;toproducemoreofonegoodmeanslessproductionoftheother B.constant;thetradeoffinproductionneverchanges C.positive;toproducemoreofonegoodmeansmoreproductionoftheother D.positive;toproducemoreofonegoodmeanslessproductionoftheother 42.Refertothefigureabove.Becky'smaximumproductionofclogsperhourisrepresentedbypoint A.u. B.t. C.v. D.w. 43.Refertothefigureabove.Becky'smaximumproductionofsandalsperhourisrepresentedbypoint A.u. B.t. C.v. D.z. 44.Refertothefigureabove.Pointuisan pointinrelationtotheproductionpossibilitiescurve. A.attainableECON200TestBank:Principlesofeconomics B.efficient