Economics Midterm Review Part 1

The major issue with economics around the world is which of the following concepts?

• disease

• scarcity

• transportation

• corrupt governments

What type of incentive would this picture represent?

• positive

• habitual

• police

• negative

Which of the following is the best characteristic of division of labor?

• assembly line production

• entrepreneurship

• a home craft business

• classroom education

An incentive is best described as which of the following?

• the opposite of a tradeoff

• it could be a reward but could not be a penalty

• it could be either a reward or a penalty

• it could be a penalty but could not be a reward

Human capital is best seen in which of the following?

• machinery that meets or exceeds federal safety standards for use by humans

• all capital owned by individuals or corporations, but not by governments

• the skills and knowledge of workers

• all capital owned by individuals, but not by corporations or governments

The loss of the highest-valued alternative defines the concept of which of the following?

• entrepreneurship

• scarcity

• marginal benefit

• opportunity cost.

From 8 to 11 p.m., Samantha can either attend a basketball game, a hockey match or the symphony. Suppose that Samantha decides to attend the hockey match and thinks to herself that if she did not go to the match she would go to the symphony. Then, the opportunity cost of attending the hockey match is which of the following?

• going to the basketball game

• going to the symphony and the basketball game

• three hours of time

• going to the symphony

Marginal benefit is which of the following?

• the benefit that arises from the secondary effects of an activity

• the benefit of an activity that exceeds its cost

• the benefit that arises from an increase in an activity

• the benefit that your activity provides to someone else.

Marginal cost is the cost that does which of the following?

• cost of an activity that exceeds its benefit

• cost that arises from an increase in an activity

• cost that your activity imposes on someone else

• cost that arises from the secondary effects of an activity

Many students choose to enter the military before attending college. What would be the opportunity cost of that choice?

• a chance to see the world

• an opportunity to fight for one's country

• gaining a college education at an earlier age

• age and experience