Micro Economics Chapter 1 practice Quiz (Parkin, Bade)

Which of the following defines economics?

Economics is the social science that studies ___________.

• the best way of eliminating scarcity

• the choices made to cope with scarcity, how incentives influence those choices, and how the choices are coordinated

• how money is created and used

• the inevitable conflict between self-interest and the social interest

Of the three big questions, what, how, and for whom, which of the following is an example of a how question?

• Why do doctors and lawyers earn high incomes?

• Why don’t we produce more small cars and fewer gas guzzlers?

• Why do we use machines rather than migrant workers to pick grapes?

• Why do college football coaches earn more than professors?

Which of the following is not a key idea in the economic way of thinking?

• People make rational choices by comparing costs and benefits.

• Poor people are discriminated against and should be treated more fairly.

• A rational choice is made at the margin.

• Choices respond to incentives.

A rational choice is ___________.

• the best thing you must forgo to get something

• what you are willing to forgo to get something

• made by comparing marginal benefit and marginal cost

• the best for society

Which of the following best illustrates your marginal benefit from studying?

• The knowledge you gain from studying 2 hours a night for a month

• The best things forgone by studying 2 hours a night for a month

• What you are willing to give up to study for one additional hour

• What you must give up to be able to study for one additional hour

Which of the following is a positive statement?

• We should stop using corn to make ethanol because it is raising the cost of food.

• You will get the most out of college life if you play a sport once a week.

• Competition among wireless service providers across the borders of Canada, Mexico, and the United States has driven roaming rates down.

• Bill Gates ought to spend more helping to eradicate malaria in Africa.

Which of the following would be a macroeconomic topic.

• Why are Americans borrowing money from China?

• Why do I choose to buy a cell phone rather than a laptop.

• Will I work more if I'm paid more?

• How can I figure out how much to charge for my candy bars?

In general, the marginal benefit of eating a 5th pizza is _____ than the 1st pizza.

• less

• more

• same

• I don't know....

An incentive A) is the opposite of a tradeoff. B) . C). D) .

• is the opposite of a tradeoff

• could be a reward but could not be a penalty

• could be either a reward or a penalty

• could be a penalty but could not be a reward

An incentive A) is the opposite of a tradeoff. B) . C). D) .

• is the opposite of a tradeoff

• could be a reward but could not be a penalty

• could be either a reward or a penalty

• could be a penalty but could not be a reward