CHAPTER 1 PRACTICE TEST

CHAPTER 1 PRACTICE - CHAPTER 1MICROECONOMICS CHAPTER 1 Question 1 This question has one answer What statement would best complete a short

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CHAPTER 1MICROECONOMICS CHAPTER 1 Question 1 1 out of 1 points This question has one answer. What statement would best complete a short definition of economics? "Economics studies: Selected Answer: how individuals, institutions, and society make optimal choices under conditions of scarcity." Correct Answer: how individuals, institutions, and society make optimal choices under conditions of scarcity." Feedback: Correct! Economics is defined in your text on p.4. Question 2 1 out of 1 points This question has one answer. The idea in economics that "there is no such thing as a free lunch" means that:
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CHAPTER 1MICROECONOMICS Selected Answer: scarce resources have alternate uses or opportunity costs. Correct Answer: scarce resources have alternate uses or opportunity costs. Feedback: Correct! Nothing is ever really free because the resources used could have been used elsewhere. Question 3 1 out of 1 points This question has one answer. The opportunity cost of a new public stadium is the:
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CHAPTER 1MICROECONOMICS Selected Answer: other goods and services that must be sacrificed to construct the new stadium. Correct Answer: other goods and services that must be sacrificed to construct the new stadium. Feedback: Correct! The opportunit y cost is what must be given up in order to get this product. Question 4 0 out of 1 points This question has one answer. From the economic perspective, when a business decides to employ more workers, the business decision maker has most likely concluded that the marginal:
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CHAPTER 1MICROECONOMICS Selected Answer: costs of employing more workers are not opportunity costs of the business because more workers are needed to increase production. Correct Answer: benefits of employing more workers are greater than the marginal costs.
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CHAPTER 1MICROECONOMICS Feedback: Resources are used in the correct amount when the marginal benefits (MB) of using them are equal to the marginal cost (MC). If the firm has decided to use more workers, it must have concluded that the marginal benefit of using more of them is greater than the marginal cost. You can't decide how many people to hire based on looking at MB or MC alone. Employing more workers does have an opportunit y cost since the resources used to pay for them could have been used for other things.
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CHAPTER 1MICROECONOMICS Question 5 0 out of 1 points This question has one answer. The combination of economic theories or principles into a simplified representation of reality is referred to as an economic: Selected Answer: fact. Correct Answer: model. Feedback: Economic models are simplified versions of real situations, as described in the text on p. 5-6. Question 6 0 out of 1 points This question has one answer. When we look at the whole economy or its major aggregates, our analysis would be at the level of:
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This note was uploaded on 09/10/2009 for the course ECO 2252 taught by Professor Edward during the Spring '08 term at Troy.

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CHAPTER 1 PRACTICE - CHAPTER 1MICROECONOMICS CHAPTER 1 Question 1 This question has one answer What statement would best complete a short

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