Economics: Standard 2

What is the fundamental problem of every society?

• labor costs
• scarcity
• economic interdependence
• market fluctuation

What is the definition of the economic term Opportunity Cost?

• the value of the next best alternative that is given up due to the choice you made 
• The price you pay to purchase something 
• The benefit you gain by making a decision 
• The amount of debt you take on by making a decision 

Max is studying for his spelling test.  Unfortunately, his favorite TV program is on right now.  If he studies for the test, he will miss watching the show.  Max decides to study for his test instead of watching TV.  What is the opportunity cost of his decision?

• the benefit received from studying for a test
• The benefit of the A he may get
• the benefit of enjoying his favorite show
• the benefit of him spending time with friends at the movies

Max is studying for his spelling test.  Unfortunately, his favorite TV program is on right now.  If he studies for the test, he will miss watching the show.  Max decides to study for his test instead of watching TV.  What is the opportunity cost of his decision?

• the benefit received from studying for a test
• The benefit of the A he may get
• the benefit of enjoying his favorite show
• the benefit of him spending time with friends at the movies

In Cost/Benefit Analysis, when does adding an additional unit pays off?

• Marginal benefits exceed marginal costs.
• Marginal costs exceed marginal benefits.
• Marginal costs equal marginal benefits.
• None of the above.

A technique of reducing or forgoing one or more desirable outcomes in exchange for increasing or obtaining other desirable outcomes in order to maximize the total return or effectiveness under given circumstances.

• Trade-off
• Opportunity cost
• PPF
• Scarcity

A country is responsible for producing guns for military defense and school lunches for students who can't afford it ("butter"). The opportunity cost of producing more guns is.. 

• decrease in the # of lunches divided by the increase in the # of guns
• increase in the # of guns divided by the decrease in the # of lunches
• decrease in the # of guns divided by the increase in the # of lunches
• increase in the # of lunches divided by the decrease in the # of guns

Additional cost associated by producing one additional unit of product.

• Fixed Costs
• Average Costs
• Marginal Costs
• Emplicit Costs

a comparison of the marginal costs and marginal benefits of a decision

• benefit-cost analysis
• marginal revenue
• opportunity cost
• trade-off

The extra benefit of adding one unit of production:

• Trade-Off
• Marginal Benefit
• Revenue
• Profit