Question

1.The basic economic decision rule is to undertake an action only when the marginal benefits of that action are greater than its marginal costs.

a.true b. false

2.Microeconomics is the study of individual choice, and how that choice is influenced by economic forces.

a.true b. false

3.An economic system does all of the following except:

a.provide a mechanism for determining how goods and services are distributed and to whom.

b.provide a mechanism that determines how goods and services are produced.

c.provide a mechanism that determines what is produced

d.satisfy all the wants and desires if every individual in the society.

4.If a student is observed dropping a course from her Fall Quarter schedule, an economist is most likely to conclude that:

a.the course was the last additional course for which the marginal benefit was positive.

b.the marginal benefit of dropping that course must be greater than the marginal cost.

c.the additional cost in tuition and study time must be less than the additional benefit of that particular course..

d.the student has now maximized total benefits from her quarter's course load. Q.5.The opportunity cost of spending $200 Million on a bridge might include all of the following except: a.the health care benefits that could have been provided to poor individuals with the $200 Million. b.the other types of infrastructure that could have been built with the $200 Million. c.the salaries of the architects who designed the bridge d. the technologies that might have been created through $200 Million spent on research and development.

Answer 1