Econ- 1.2 Formative Assessment- Option 2

John goes to buy a shirt. He only planned on buying one shirt but there is a ‘buy two, get one-half price’ sale, so he decided to buy three shirts. This is an example of…(choose the BEST principle)

• Thinking at the margins principle

• Trade makes us better off principle

• Cost versus benefits principle

• Future consequences count principle

Which of the following represents a marginal cost?

• mortgage payments

• the sum of fixed costs and

  variable costs

• wages and raw materials

• the cost of producing one additional unit

On what economic priniciple is the woman remarking?

• Pizza is scare in the United

  States.

• Pizza is a need and not a want.

• Pizza is a valuable resource and therefore has a high cost.

• The benefits of buying a pizza in Italy do not outweigh the costs.

Which of the following is an opportunity cost of the man's decision to go to

Italy to buy pizza?

• The money spend on the

  trip to Italy could have

  been spent on other

  things.

• The man will still have to

  purchase food and beverage on the flight.

• The pizza in Italy will

  taste better than pizza

  made at home.

• The $2 coupon is just an excuse to take a vacation.

The loss of years of income resulting from the decision to go to college is the

• marginal cost

• variable cost

• opportunity cost

• total cost

How are scarcity and trade-off related to each other?

• Trade-offs create the problem of scarcity

• They are not related

• Scarcity creates the need for trade-offs

• Too many resources creates involves both scarcity and trade-offs

In economics, marginal means ______.

Use the image provided to answer this following- Which of the following is an opportunity cost of the man's decision to go to

Italy to buy pizza?

• 
  The money spend on the

  trip to Italy could have

  been spent on something else.

• The pizza in Italy will

  taste better than pizza

  made at home.

• The man will still have to

  purchase food and beverage on the flight.

• The $2 coupon is just an excuse to take a vacation.

How are scarcity and trade-off related to each other?

• 
  Trade-offs create the problem of scarcity

• 
  Scarcity creates the need for trade-offs

• 
  They are not related

• 
  Too many resources creates involves both scarcity and trade-offs

All of the following are examples of opportunity cost except:

• The leisure time you sacrifice to study for an exam.

• The building the city of Chanhassen could have built with the construction materials and labor used to build a new public library.

• The tuition fees paid to a university.

• The revenue Tesla could have gained by producing a compact electric car if the company had not produced its electric truck instead.