HST 413 1.09 Quiz

Which best describes the purpose of using cost-benefit analysis?

• produce a spreadsheet predicting costs

• make decisions that maximize benefits

• know the highest and lowest price to pay for something

• decide how much money to invest to earn a certain amount

Which is a simple way of describing cost-benefit analysis?

• making a decision by listing pros and cons

• estimating prices to the nearest dollar

• measuring the overall health of an economy

• predicting economic decisions without much information

Which lists some of the nonmonetary factors that are taken into account when doing cost-benefit analysis?

• reason and emotion

• price and profit

• time and effort

• action and outcome

Which best describes the decision-making process when doing a cost-benefit analysis?

• trying to predict the future

• ignoring needs in favor of wants

• weighing pros and cons

• asking economists what makes sense

Which best explains why any determination of cost must go beyond counting the money involved?

• Calculations of cost and benefit are subjective.

• Most people do not know how much things cost.

• Profit is a more accurate measurement of benefits.

• Large amounts of money cannot be accurately counted.

Which statement accurately describes how costs and benefits are calculated?

• Cost-benefit analysis is an attempt to get benefits to exceed costs.

• Money is an important cost but not the only one.

• Calculations of cost and benefit are based on personal preferences.

• Benefits do not always increase as costs increase.

What is one reason that people want to minimize costs?

• Costs always have to be paid before a benefit arrives.

• Costs are calculated differently by everyone.

• Costs always involve doing without something good.

• Costs are often bad things that people don't want to accept.

Which is the purpose of economic indicators?

• figure out how fast the gross domestic product is growing

• inform consumers how fast prices are going to rise

• indicate whether an unemployed worker is likely to get a new job

• judge the overall condition of a particular country's economy

Which best describes why economic indicators are useful?

• They help people determine how healthy a country's economy is.

• They indicate which jobs will pay the most in future years

• They enable the government to collect the maximum amount of taxes

• They allow economists to prevent the growth of gross domestic product.

Which describes gross domestic product (GDP)?

• rate of growth of residential construction

• increase in the average level of prices

• percentage of workers who are out of work

• value of all goods and services produced in a country