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Econ 101 - Microeconomics » Winter 2022 » iVAT Chapter 1

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Question #1

What makes a good/service scarce?

A. The fact that goods/services are highly desirable.

B. The fact that goods/services are limited by human ingenuity.

C. The fact that there is infinite quantities of that good/service in an infinite amount of time.

D. The fact that there is finite quantities of that good/service in a fixed amount of time.

Question #2

Markets ration via:

A. social, political, and cultural means

B. the price mechanism

C. non-economic forces

D. non-market rationing

Question #3

An example of market rationing is:

A. not enough information to answer

B. the allocating of slots into U.C. Berkeley based on SAT scores

C. the allocating Ferrraris to those who can afford the price of a Ferrari

D. the allocating of healthcare to those who are the best candidates for treatment

F. the allocating of kidneys based on life expectancy

Question #4

Non-market rationing is done through:

A. the price mechanism

B. social, cultural, and political means

C. marginal benefits

D. note enough information to answer

E. marginal costs

Question #5

An example of non-market rationing is:

A. the allocating of Ferraris to those who can afford the price of Ferraris

B. the allocating of slots into Harvard based on who can afford the price of tuition

C. the allocating of healthcare to those who can afford the price of care

D. the allocating of kidneys based on life expectancy

E. cost-benefit analysis

Question #6

Even though microeconomics and macroeconomics are separate fields of study within economics, what is an example of how the two separate fields can affect each other?

A. Unemployment, which is primarily a topic studied under macroeconomics, can impact aggregate demand, which is a topic relegated primarily to microeconomics.

B. Inflation, which is primarily a topic studied under macroeconomics, can impact how individuals make consumption decisions, which is a topic relegated primarily to microeconomics.

C. Unemployment, which is primarily a topic studied under microeconomics, can impact aggregate demand, which is a topic relegated primarily to macroeconomics.

D. Inflation, which is primarily a topic studied under microeconomics can impact aggregate demand, which is a topic relegated primarily to microeconomics.

Question #7

Sunk costs are costs that:

A. Can be recovered and thus are relevant to the decision at hand

B. Are variable and change when you engage in some activity

C. Cannot be recovered and thus are irrelevant to the decision at hand

D. Are purely variable

E. Are constant in the long run, but are variable in

Question #8

An example of a marginal benefit would be:

A. The fixed benefit of going to college over 4 years.

B. The additional money a firm spends on purchasing a computer.

C. The additional expense incurred by engaging in an activity.

D. The additional revenue gained from selling an additional computer.

Question #9

The economic decision rule states that you should engage in an activity if:

A. marginal benefit is greater than the marginal cost

B. The marginal cost is greater than the marginal benefit

C. The total cost is greater than the total benefit

D. All of the answers available are correct

E. All else being equal you are worse off from the activity

Question #10

The opportunity cost for a factory worker during their 8 hour shift is:

A. The net benefit that they could have received from working at their job

B. The net benefit that they could have received by spending that 8 hours in college

C. transportation costs

D. Textbook costs

E. The parking fees at the factory

Question #11

The opportunity cost of spending $50 billion on education is:

A. The foregone benefit of improved education outcomes

B. The foregone net benefit from spending $50 billion on healthcare

C. The foregone cost of education spending

D. The cost of paying teacher's salaries

E. The investment in building educational facilities

Question #12

Suppose that an individual takes a month long vacation to Fiji that costs $5,000. They value the vacation at $12,000. This individual could have earned $6,000 after taxes over the course of that month. What is an example of the proper way to account for marginal benefits and marginal costs?

A. MC=$5,000+$6,000=$11,000 MB=$12,000

B. MC=$6,000 MB=$12,000

C. MC=$5,000 MB=$12,000

D. MC=$5,000+$6,000=$11,000 MB=$12,000+$11,000=$23,000

Question #13

A. No, due to the following reason: MB=12,000>MC=5,000

B. Yes, due to the following reason: MB=12,000>MC=11,000

C. Yes, due to the following reason: MC=12,000>MB=11,000

Question #14

Theoretical models are used to do the following:

A. Gain an understanding of how economic variables interact by making simplifying assumptions, and making predictions based on the insights from the model.

B. Gain an understanding of how economic variables converge and diverge from one another by making increased complexity an inherent part of the model.

C. Gain an understanding of how economic variables converge by making the real world more complex, and making predictions based on the insights from the increased complexity.

D. Increase complexity and gain insights into that complexity.

Question #15

A. Prices have a tendency to remain constant

B. Prices have a tendency to rise

C. Quantity demanded will shift

D. Prices have a tendency to fall

E. Prices are in equilibrium

Question #16

When quantity supplied is greater than quantity demanded

A. prices have a tendency to fall

B. not enough information to answer

C. Prices have a tendency to rise

D. prices are in equilibrium

E. prices are constant

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