chapter1 quiz

# chapter1 quiz - Principles of Microeconomics Chapter 1 Quiz...

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Principles of Microeconomics Chapter 1 Quiz 1. Rational people make decisions at the margin by a. following marginal traditions. b. behaving in a random fashion c. Thinking in black-and-white terms d. comparing marginal costs and marginal benefits. 2. Canada can benefit from trade a. only with nations that can produce goods Canada cannot produce. b. only with less developed nations c. only with nations outside of North America. d. With any nation. 3. Teresa eats three oranges during a particular day. The marginal benefit she enjoys from eating the a. can be thought of as the total benefit Teresa enjoys by eating three oranges minus the total benefit she would have enjoyed by eating just the first two oranges. b. Determines Teresa’s willingness to pay for the first, second, and third oranges. c. Does not depend on how many oranges Teresa has already eaten d. All of the above are correct. 4. Economists are particularly adept at understanding that people respond to a. Laws b. i ncentives. c. Punishment more than rewards. d. Rewards more than punishments. 5. The opportunity cost of going to college is a. The total spent on food, clothing, books, transportation, tuition, lodging, and other expenses. b. the value of the best opportunity a student gives up to attend college. c. Zero for students who are fortunate enough to have all of their college expenses paid by someone else. d. Zero, since a college education will allow a student to earn a larger income aftger graduation,

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6. A construction company has built 50 houses so far this year at a total cost to the company of \$8 million. If the company builds a 51st house, its total cost will increase to \$8.18 million. Which of the following statements is correct? a. For the first 50 houses, the average cost per house was \$160,000 b. The marginal cost of the 51 house, if it is built, will be \$180,000 c. If the company can experience a marginal benefit of \$190,000 by building the 51st house, then the company should build it. d.
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chapter1 quiz - Principles of Microeconomics Chapter 1 Quiz...

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