Question 1

If there is no scarcity,

Accepted Answer

If there is no scarcity, resources are unlimited, meaning that choosing one action over another does not involve giving up anything else, resulting in zero opportunity cost.

Question 2

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

Accepted Answer

The reduction in taxable income serves as an incentive for Caroline to donate, as it provides a financial benefit in the form of tax savings.

Question 3

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 an action is the next best alternative that is given up in order to pursue that action. In this case, if Amy decides to study for the hour, she is giving up the opportunity to either sleep or go out for dinner. The opportunity cost is whichever of those two options she would have preferred the most. Therefore, the correct answer is B.

Question 4

In 1983 the government introduced Medicare.This is an example of

Accepted Answer

The introduction of Medicare by the government is an example of the government using economic tools, such as policy decisions, to improve the healthcare system.

Question 5

The benefit of an activity is

Accepted Answer

The benefit of an activity is the gain or pleasure it brings, which is subjective and cannot be measured purely in dollars. The other options are not accurate descriptions of the benefit of an activity.

Question 6

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

Accepted Answer

The opportunity cost is the highest valued alternative forgone, which in this case is either the Pepsi or the bag of chips. So, the best choice is A.

Question 7

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 does not necessarily mean that they behave selfishly or make decisions in the social interest, but they are making the best decision based on their own preferences and constraints. Therefore, the best choice would be E.

Question 8

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

Accepted Answer

If the marginal benefit exceeds the marginal cost, it means that the additional satisfaction or enjoyment gained from eating the slice of pizza is greater than the additional cost incurred in terms of money, calories, etc. Therefore, it makes sense to eat the slice of pizza.

Question 9

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

Accepted Answer

A normative statement is a statement that expresses a value judgment or opinion. Option A expresses an opinion on what car prices ought to be, making it a normative statement.

Answer: E
 Option E expresses an opinion on the relationship between wages and employment, making it a normative statement.

Question 10

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 definition of marginal benefit is given in option i and iii, where i states that it is the benefit from a one-unit increase in the activity and iii states that it is measured by what the person is willing to give up to get one additional unit of the activity. Option ii is incorrect as it describes a small, unimportant activity, which is not relevant to the concept of marginal benefit. Therefore, the correct answer is D.

Question 11

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 referred to as the marginal benefit. It is the benefit gained by consuming or producing one additional unit of a good or service.

Question 12

A positive statement

Accepted Answer

A positive statement is a statement of fact that can be tested and potentially proven true or false. Therefore, it is possible for a positive statement to be either right or wrong.

Question 13

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.

Question 14

The cost of a one-unit increase in an activity

Accepted Answer

The cost of a one-unit increase in an activity is known as the marginal cost. Marginal cost refers to the additional cost of producing one more unit of a good or service.

Question 15

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

Accepted Answer

This is a normative statement because it expresses a value judgment about what ought to be, rather than describing what is currently the case (positive statement) or predicting what might happen in response to a particular action or policy (statement on the margin).

Question 16

When the Adelaide Crows score more than 100 points in a home game,they win the game.This is an example of

Accepted Answer

The statement describes a correlation between scoring more than 100 points in a home game and winning the game. It doesn't provide any economic theory or marginal analysis. It is not an incentive either because winning is already the main incentive in a game. It is not normative either because it is not prescribing how things should be. Therefore, option C is the best answer.

Question 17

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 email.What is the opportunity cost of attending the concert for John?

Accepted Answer

The opportunity cost is the value of the next best alternative foregone, which in this case is attending a movie.

Question 18

Which of the following statements is a normative statement?

Accepted Answer

A normative statement is a statement that expresses a value judgment about whether a situation is desirable or undesirable. Option E expresses a value judgment about what the minimum wage should be, making it a normative statement. The other options are all positive statements that describe a situation without expressing a value judgment.

Question 19

Which of the following statements is a normative statement?

Accepted Answer

A normative statement expresses a value judgment about what should be. "Every Australian household should have health care insurance coverage" is a normative statement because it expresses a value judgment about the ideal state of affairs. The other statements are positive statements that describe what is or has occurred.

Question 20

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

Accepted Answer

The benefit of something is the gain or pleasure that it brings. This is the definition of benefit and therefore this is the correct choice. The other choices are irrelevant to the definition of benefit.

Quiz 1: Getting Started

If there is no scarcity,

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

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

In 1983 the government introduced Medicare.This is an example of

The benefit of an activity is

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

When people make rational choices,they

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

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.

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

A positive statement

Opportunity cost is best defined as

The cost of a one-unit increase in an activity

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

When the Adelaide Crows score more than 100 points in a home game,they win the game.This is an example of

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 email.What is the opportunity cost of attending the concert for John?

Which of the following statements is a normative statement?

Which of the following statements is a normative statement?

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