1、Chapter 01 - Thinking Like an Economist1-0Chapter 01Thinking Like an EconomistMultiple Choice Questions1. Economics is best defined as the study of: A. prices and quantities.B. inflation and interest rates.C. how people make choices under the conditions of scarcity and the results of those choices.D
2、. wages and incomes.2. Economic questions always deal with: A. financial matters.B. political matters.C. insufficient resources.D. choice in the face of limited resources.3. The range of topics or issues that fit within the definition of economics is: A. limited to market activities, e.g., buying so
3、ap.B. limited to individuals and firms.C. extremely wide, requiring only the ideas of choice and scarcity.D. very limited.4. The central concern of economics is: A. poverty.B. scarcity.C. wealth accumulation.D. overconsumption.Chapter 01 - Thinking Like an Economist1-15. The scarcity principle indic
4、ates that: A. no matter how much one has, it is never enough.B. compared to 100 years ago, individuals have less time today.C. with limited resources, having more of “this“ means having less of “that.“D. because tradeoffs must be made, resources are therefore scarce.Chapter 01 - Thinking Like an Eco
5、nomist1-26. The logical implication of the scarcity principle is that: A. one will never be satisfied with what one has.B. as wealth increases, making choices becomes less necessary.C. as wealth decreases, making choices becomes less necessary.D. choices must be made.7. If all the worlds resources w
6、ere to magically increase a hundredfold, then: A. the scarcity principle would still govern behavior.B. economics would no longer be relevant.C. the scarcity principle would disappear.D. tradeoffs would become unnecessary.8. The principle of scarcity applies to: A. the poor exclusively.B. all consum
7、ers.C. all firms.D. everyoneconsumers, firms, governments, and nations.9. At the very least, Joe Average and Bill Gates are both identically limited by: A. their wealth.B. the 24 hours that comprise a day.C. their knowledge.D. their influence.Chapter 01 - Thinking Like an Economist1-310. Forest is a
8、 mountain man living in complete isolation in Montana. He is completely self-sufficient through hunting, fishing, and farming. He has not been in the city to buy anything in five years. One can infer: A. the scarcity principle does not apply to Forest.B. Forest is not required to make choices.C. the
9、 scarcity principle still applies because more hunting means less fishing and farming.D. Forest is very satisfied.Chapter 01 - Thinking Like an Economist1-411. The scarcity principle applies to: A. all decisions.B. only market decisions, e.g., buying a car.C. only non-market decisions, e.g., watchin
10、g a sunset.D. only the poor.12. Chris has a one-hour break between classes every Wednesday. Chris can either stay at the library and study or go to the gym and work out. The decision Chris must make is: A. not an economic problem because neither one costs money.B. not an economic problem because its
11、 an hour that is wasted no matter what Chris does.C. an economic problem because the tuition Chris pays covers both the gym and the library.D. an economic problem because Chris has only one hour during which he can study or work out.13. Josh wants to go to the football game this weekend, but he has
12、a paper due on Monday. It will take him the whole weekend to write the paper. Josh decided to stay home and work on the paper. According to the scarcity principle, the reason Josh didnt go to the game is that: A. Josh prefers schoolwork to football games.B. writing the paper is easier than going to
13、the game.C. Josh doesnt have enough time for writing the paper and going to the game.D. its too expensive to go to the game.Chapter 01 - Thinking Like an Economist1-514. Whether studying the size of the U.S. economy or the number of children a couple will choose to have, the unifying concept is that
14、 wants are: A. limited, resources are limited, and thus choices must be made.B. unlimited, resources are limited, and thus choices must be made.C. unlimited, resources are limited to some but not to others, and thus some people must make choices.D. unlimited, resources are limited, and thus governme
15、nt needs to do more.15. The cost-benefit principle indicates that an action should be taken: A. if the total benefits exceed the total costs.B. if the average benefits exceed the average costs.C. if the net benefit (benefit minus cost) is zero.D. if the extra benefit is greater than or equal to the
16、extra costs.Chapter 01 - Thinking Like an Economist1-616. When a person decides to pursue an activity as long as the extra benefits are at least equal to the extra costs, that person is: A. violating the cost-benefit principle.B. following the scarcity principle.C. following the cost-benefit princip
17、le.D. pursuing the activity too long.17. Choosing to study for an exam until the extra benefit (improved score) equals the extra cost (mental fatigue) is: A. not rational.B. an application of the cost-benefit principle.C. an application of the scarcity principle.D. the relevant opportunity cost.18.
18、The scarcity principle tells us that _, and the cost-benefit principle tells us _. A. choices must be made; how to make the choicesB. choices must be made; that the costs can never outweigh the benefits of the choicesC. rare goods are expensive; that the costs should outweigh the benefits of the cho
19、icesD. rare goods are expensive; that the costs can never outweigh the benefits of the choices19. According to the cost-benefit principle: A. the lowest cost activity usually gives the lowest benefit.B. a person should always choose the activity with the lowest cost.C. a person should always choose
20、the activity with the greatest benefit.D. the extra costs and benefits of an activity are more important considerations than the total costs and benefits.Chapter 01 - Thinking Like an Economist1-720. A rational person is one who: A. is reasonable.B. makes choices that are easily understood.C. posses
21、ses well-defined goals and seeks to achieve them.D. is highly cynical.Chapter 01 - Thinking Like an Economist1-821. The seventh glass of soda that Tim consumes will produce an extra benefit of 10 cents and has an extra cost of zero (Tim is eating at the cafeteria). The cost-benefit principle predict
22、s that Tim will: A. realize he has had too much soda to drink and go home.B. drink the seventh glass and continue until the marginal benefit of drinking another glass of soda is zero.C. volunteer to empty out the fountain.D. not drink the seventh glass.22. Janie must either mow the lawn or wash clot
23、hes, earning her a benefit of $30 or $45, respectively. She dislikes both equally and they both take the same amount of time. Janie will therefore choose to _ because the economic surplus is _. A. mow the lawn; greaterB. wash clothes; greaterC. mow the lawn; smallerD. wash clothes; smaller23. Dean d
24、ecided to play golf rather than prepare for tomorrows exam in economics. One can infer that: A. Dean has made an irrational choice.B. Dean is doing poorly in his economics class.C. the economic surplus from playing golf exceeded the surplus from studying.D. the cost of studying was less than the cos
25、t of golfing.Chapter 01 - Thinking Like an Economist1-9Larry was accepted at three different graduate schools, and must choose one. Elite U costs $50,000 per year and did not offer Larry any financial aid. Larry values attending Elite U at $60,000 per year. State College costs $30,000 per year, and
26、offered Larry an annual $10,000 scholarship. Larry values attending State College at $40,000 per year. NoName U costs $20,000 per year, and offered Larry a full $20,000 annual scholarship. Larry values attending NoName at $15,000 per year.Chapter 01 - Thinking Like an Economist1-1024. The opportunit
27、y cost of attending Elite U is: A. $50,000B. $10,000C. $20,000D. $15,00025. The opportunity cost of attending State College is: A. $30,000B. $20,000C. $15,000D. $10,00026. Larry maximizes his surplus by attending: A. Elite U, because $60,000 is greater than the benefit at the other schools.B. State
28、College, because the difference between the benefit and cost is greatest there.C. NoName U, because Larry has a full scholarship there.D. Elite U, because the opportunity costs of attending Elite U are the lowest.27. Larry has decided to go to Elite U. Assuming that all of the values described are c
29、orrect, for Larry to decide on Elite U, he must have: A. calculated his surplus from each choice and picked the one with the highest surplus.B. underestimated the benefits of attending NoName.C. miscalculated the surplus of attending Elite U.D. determined the opportunity cost of each choice and pick
30、ed the one with the lowest opportunity cost.Chapter 01 - Thinking Like an Economist1-1128. Jen spends her afternoon at the beach, paying $1 to rent a beach umbrella and $11 for food and drinks rather than spending an equal amount of money to go to a movie. The opportunity cost of going to the beach
31、is: A. the $12 she spent on the umbrella, food and drinks.B. only $1 because she would have spent the money on food and drinks whether or not she went to the beach.C. the movie she missed seeing.D. the movie she missed seeing plus the $12 she spent on the umbrella, food and drinks.Chapter 01 - Think
32、ing Like an Economist1-1229. Relative to a person who earns minimum wage, a person who earns $30 per hour has: A. a lower opportunity cost of working longer hours.B. a higher opportunity cost of taking a day off.C. a lower opportunity cost of driving farther to work.D. the same opportunity cost of s
33、pending time on leisure activities.30. The opportunity cost of an activity is the value of: A. an alternative forgone.B. the next-best alternative forgone.C. the least-best alternative forgone.D. the difference between the chosen activity and the next-best alternative forgone.31. Amy is thinking abo
34、ut going to the movies tonight. A ticket costs $7 and she will have to cancel her dog-sitting job that pays $30. The cost of seeing the movie is: A. $7.B. $30.C. $37.D. $37 minus the benefit of seeing the movie.32. Economic surplus is: A. the benefit gained by taking an action.B. the price paid to t
35、ake an action.C. the difference between the benefit gained and the cost incurred of taking an action.D. the wage someone would have to earn in order to take an action.Chapter 01 - Thinking Like an Economist1-1333. The Governor of your state has cut the budget for the University and increased spendin
36、g on Medicaid. This is an example of: A. the pitfalls of considering average costs instead of marginal costs.B. poor normative economic decision making.C. poor positive economic decision making.D. choice in the face of limited resources.Chapter 01 - Thinking Like an Economist1-1434. Sally earned $25
37、,000 per year before she became a mother. After she became a mother, she told her employer that her opportunity cost of working is now $50,000, and so she is not willing to work for anything less. Her decision is based on: A. the high cost of raising a child.B. her desire to save for her childs coll
38、ege expenses.C. her increased value to her employer.D. the value she places on spending time with her child.35. Alex received a four-year scholarship to State U. that covered tuition and fees, room and board, and books and supplies. As a result: A. attending State U. for four years is costless for A
39、lex.B. Alex has no incentive to work hard while at State U.C. the cost of attending State U. is the amount of money Alex could have earned working for four years.D. the cost of attending State U. is the sum of the benefits Alex would have had attending each of the four other schools to which Alex ha
40、d been admitted.36. Suppose Mary is willing to pay up to $15,000 for a used Ford pick-up truck, but she finds one for $12,000. Her _ is _. A. benefit; $12,000B. cost; $15,000C. economic surplus; $3,000D. economic surplus; $12,00037. In general, rational decision making requires one to choose the act
41、ions that yield the: A. largest total benefits.B. smallest total costs.C. smallest net benefits.D. largest economic surpluses.Chapter 01 - Thinking Like an Economist1-1538. Suppose the most you would be willing to pay for a plane ticket home is $250, but you buy one online for $175. The economic sur
42、plus of buying the online ticket is: A. $175.B. $250.C. $75.D. $0.39. The use of economic models, like the cost-benefit principle, means economists believe that: A. this is exactly how people choose between alternatives.B. this is a reasonable abstraction of how people choose between alternatives.C.
43、 those who explicitly make decisions this way are smarter.D. with enough education, all people will start to explicitly make decisions this way.40. Jenna decides to see a movie that costs $7 for the ticket and has an opportunity cost of $20. After the movie, she says to one of her friends that the m
44、ovie was not worth it. Apparently: A. Jenna failed to apply the cost-benefit model to her decision.B. Jenna was not rational.C. Jenna overestimated the benefits of the movie.D. Jenna underestimated the benefits of the movie.41. Most of us make sensible decisions most of the time, because: A. we know
45、 the cost-benefit principle.B. subconsciously we are weighing costs and benefits.C. most people know about the scarcity principle.D. we conduct hypothetical mental auctions when we make decisions.Chapter 01 - Thinking Like an Economist1-1642. Suppose a person makes a choice that seems inconsistent w
46、ith the cost-benefit principle. Which of the following statements represents the most reasonable conclusion to draw? A. The person (explicitly or implicitly) over-estimated the benefits or under-estimated the costs or both.B. The cost-benefit principle is rarely true.C. The person does not grasp how
47、 decisions should be made.D. The person is simply irrational.Chapter 01 - Thinking Like an Economist1-1743. Economic models are intended to: A. apply to all examples equally well.B. eliminate differences in the way people behave.C. generalize about patterns in decision-making.D. distinguish economic
48、s students from everyone else.44. Economic models claim to be: A. reasonable abstractions of how people make choices, highlighting the most important factors.B. exact replications of the decision-making process people use.C. interesting chalkboard exercises with little applicability to the real worl
49、d.D. exceptionally accurate methods of predicting nearly all behavior of everyone.45. The cost-benefit model used by economists is: A. unrealistic because it is too detailed and specific to apply to a variety of situations.B. unrealistic because everyone can think of times when he or she violated the principle.C. useful because everyone follows it all of the time.D. useful because most people follow it most of the time.46. Barry owns a clothing store in the mall and has asked two economic consultants to develop models of consumer behav
