Question 1

Your friend is preparing for this exam and in your practice session makes the following statement: "Instead of attending microeconomics class for two hours,Kiki could have played tennis or watched a movie.Therefore,the opportunity cost of attending class is the tennis and the movie she had to give up." Is your friend's analysis correct or not? Explain your answer.

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Question 2

In New State,the bottling law requires that people get a refund of five cents when they return an empty bottle or can.Why does the state pay people to return bottles? In your answer,be sure to mention the role played by rational choice.

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The answer of In New State,the bottling law requires that...

Question 3

Rather than go out to eat by yourself,you decide to stay at home and fix dinner for yourself and your two roommates.Your roommates applaud your decision.Your roommates tell you that your decision to eat at home has no opportunity cost because you already have all the dinner ingredients in your pantry.Is this comment correct?

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Question 4

What is an opportunity cost? Give an example.

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Question 5

Discuss what is necessary to make rational decisions.Be sure to mention opportunity cost,marginal cost,and marginal benefit.

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Question 6

Why is the benefit of something measured by what you are willing to give up?

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Question 7

Define economics and describe its branches of study.

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Question 8

The question "Will doctors or lawyers have higher annual incomes?" represents which of the three basic economic questions?

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Question 9

Must a rational choice always work out well? In other words,is it possible for someone to regret a rational decision?

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Question 10

Two economists can agree that raising the minimum wage creates unemployment yet one might argue that raising the minimum wage is a good policy and the other that it is a bad policy.Why can this difference exist? Be sure to use the terms positive and normative in your answer.

Accepted Answer

The answer of Two economists can agree that raising the...

Question 11

Shaniq can spend the next hour studying for a finance test,hiking along the Oregon coast,watching reruns of Lost on television,or napping.If she decides to study,what is the opportunity cost of her choice: hiking,watching television,or napping?

Accepted Answer

The answer of Shaniq can spend the next hour studying...

Question 12

Why does scarcity lead to the "what," "how," and "for whom" questions?

Accepted Answer

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Question 13

For spring break,Melanie will either stay home or go to Daytona Beach.At home,Melanie pays $10 per day for food and earns $90 a day at her job.At Daytona Beach,Melanie will stay with friends and so has no lodging cost.She will pay $20 per day for food.In terms of dollars,Melanie's opportunity cost per day of going to Daytona Beach is how much?

Accepted Answer

The answer of For spring break,Melanie will either stay home...

Question 14

Different nations answer the what,how,and for whom questions differently.China,for instance,builds dams using many workers and only a little capital equipment.The United States builds dams using a few workers and a lot of capital equipment.Which economic question are these two nations answering and why do the answers differ?

Accepted Answer

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Question 15

Define marginal cost and marginal benefit.

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Question 16

What is the difference between positive and normative statements?

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Question 17

List and explain the three fundamental economic questions that must be answered by all economic systems.

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Question 18

What is a positive statement? Give an example.

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Question 19

What is the difference between microeconomics and macroeconomics?

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Question 20

Pumpkins are grown in New Mexico with the aid of fertilizer.Hence,fertilizer is a partial answer to which of the three economic questions?

Accepted Answer

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Quiz 1: Getting Started