Econ Chapter 1

Davonte's boss informs him that the firm he works for is going to be promoting someone to the position of Vice President sometime in the next six months. Davonte wants the job, so he works as hard as he can to impress his boss and bring in profits for the company. Davonte is motivated by a

• rational decision

• negative incentive

• positive incentive

• list of alternatives

Robert decides to go on a backpacking trip in Alaska. In order to go on this trip, he has to give up $600 and a week's worth of vacation time. These are examples of what?

• opportunity costs

• production possibilities

• growth

• trade-offs

The people who work in a law firm all want new computers. Which statement BEST represents their winning statement for buying new equipment?

• Our equipment is old and outdated

• We know where we can get a good sale price

• We are willing to give up our new office chairs and desks as a trade-off.

• The marginal benefits of better computers outweigh the marginal costs of purchasing them.

What do bonuses, promotions, and profit-sharing have in common?

• They all involve fines

• They are all financial incentives

• They are incentives that do not work with most people.

• They are incentives practiced by government.

Leah loves both band and chorus in middle school. She also wants to play lacrosse. Practces for all three activities are held on the same days. Her parents tell her she can do only one activity. If she chooses band, what is her opportunity cost?

What is Leah's trade-off?

The Swiss family loves TV. They have just bought a TV in the living room, dining room, kitchen, and each of their three bedrooms and two bathrooms. At which TV purchase does the Law of Diminishing Marginal Utility kick in for them?

• TV #2

• TV #5

• TV #8

• TV #9

According to economic theory, people are

• impulsive

• predictable

• stubborn

• altruistic

The use or satisfaction a person receives from a good or service is its

• opportunity cost

• demand

• utility

• marginal benefit

What is the most important everyday incentive for consumers?

• Price

• Force

• First Come First Serve

• "Good Job!"