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EC 111 Midterm
| Question | Answer | |||
|---|---|---|---|---|
| According to the text, economics is the study of how | human beings coordinate their wants and desires. | government policies can be used to meet individuals' wants and desires. | governments allocate resources in the face of constraints. | scarce resources are allocated between capitalists and workers. |
| Dorm rooms usually are not allocated by markets. Allocating dorm rooms is: | an economic problem. | not an economic problem | not affected by economic forces. | determined by prices. |
| If allocating dorm rooms changes from allocation by lottery to allocation by the market: | the allocation problem is still an economic problem. | it becomes an economic problem. | it becomes a social problem but not an economic problem. | it becomes a political problem but not an economic problem. |
| Which of the following is not one of the three central coordination problems of the economy given in the book? | Whether | What | For whom | How |
| The quantity of goods and services available to society: | depends on human action. | is fixed. | is not of economic importance. | will always grow to meet individuals' wants and desires. |
| Economic systems: | address the questions what is produced, how it is produced, and for whom it is produced. | can eliminate scarcity. | provide all the goods people want and desire. | provide equal distribution of well-being among its participants. |
| Scarcity exists because: | new wants continue to develop and willingness to meet them is limited. | individuals cannot solve the three central coordination problems | governments cannot solve the three central coordination problems. | the supply of goods is always less than the demand. |
| People can reasonably expect that an economic system will decide all of the following except: | how to assign initial property rights. | what goods to produce. | how to produce the goods. | for whom to produce the goods |
| To engage in economic reasoning, one must compare: | marginal cost and marginal benefit | total cost and total benefit. | marginal cost, sunk cost, and total benefit. | total cost and total benefit. |
| Alexandra is studying an hour for her economics quiz will improve her grade. This improvement is worth $20. To study for an hour for her economics quiz, however, she will have to work one fewer hour at her part-time job. Alexandra should: | study for the quiz as long as her hourly wage rate is less than $20. | study for the quiz as long as her hourly wage rate is more than $20. | study for the quiz only if her hourly wage rate is exactly $20. | not study for the quiz because earning a higher grade cannot have a dollar value. |
| Microsoft filed a lawsuit against people who sent spam (junk email) and a website owner who hosted spam services. A spokesman for Microsoft said that they are increasing the cost of being a spammer. An economist would agree with which statement? | Microsoft's approach of trying to change the costs of spamming is the most efficient way to change behavior. | Microsoft should not be involved because spamming is just part of the invisible hand at work and should be left alone. | A more effective approach would be to appeal to the morals of the spammers and tell them to follow the Golden Rule | A more effective approach would be to educate spammers about the costs they impose on others. |
| The marginal benefit from consuming another unit of a good | equals the increase in total benefits from consuming the unit. | must be less than the marginal cost or the unit will not be consumed. | must equal the marginal cost or the unit will not be consumed. | equals the total benefit obtained from the consumption of all prior units. |
| Company charges $30 per month. For that $30 it's allowed 600 minutes of free calls then 25 cents per minute for any calls above 600 minutes. They used 300 minutes this month. What's her marginal cost per minute of two more calls lasting 10 minutes each? | $0 | $2.50 | 25 cents | 4 cents |
| Company charges $30 per month. For that $30 it's allowed 600 minutes of free calls then 10 cents per minute for any calls above 600 minutes. They used 600 minutes this month. What's her marginal cost per minute of making additional calls? | 10 cents | 25 cents | 5 cents | $0 |
| Sunk costs: | are irrelevant to economic decision making. | are an essential part of economic decision making. | should be considered, but only when marginal cost is less than marginal benefit. | should be considered only when there is no information about marginal cost and marginal benefit. |
| Suppose the marginal cost of dating Perry is $30 and the marginal benefit is worth $40 to you. Following economic reasoning, you should | date Perry. | not date Perry. | determine what your sunk costs are. | determine what your total benefits and total costs are. |
Created by:
Leeanne_Bahn17