Question

QUESTION 5

1. "Mario buys eight units of good X when his income is $2,000 a month. When his income increases to $2,700 per month, he buys only six units of good X. For Mario, good X is"

   		a normal good.
   		an inferior good.
   		a good with few substitutes.
   		a good of high value.

1 points   

QUESTION 6

1. Deciding whether to study an additional hour for an exam by comparing the additional benefits to the additional costs of an extra hour of study is an example of:

   		the scientific method.
   		the invisible hand.
   		marginal thinking.
   		Increasing opportunity cost.

1 points   

QUESTION 7

1. Why do people specialize?

   		Specialization increases productivity.
   		Specialization decreases people's dependence on one another.
   		People become self-sufficient when they specialize.
   		Most people only know how to do a few tasks.

1 points   

QUESTION 8

1. "Acura and Honda sell similar cars each costing $10,000 to build. Honda sells their car at $15,000 and Acura sells their car for $26,000. What is the joint profit on the sale of these two cars?"

   		"$16,000 "
   		"$41,000 "
   		"$21,000 "
   		"$31,000 "

Answer 1

Answer : 5) The answer is option B.

For inferior goods when income increase then demand decrease. Here Mario buys less quantities of good X when income increases. This means that good X is an inferior good to Mario. Therefore, option B is correct.

6) The answer is option C.

Marginal thinking is a decision by which the person get additional benefit for extra 1 unit cost. Here the decision of extra 1 hour study by comparing the additional benefit for extra 1 hour study is an example of marginal thinking. Therefore, option C is correct.

7) The answer is option A.

When someone is specialized in a particular area then the person become more productive in that particular area. This means that the specialization increase the productivity level. Therefore, option A is correct.

8) The answer is option C.

Profit = Revenue - Cost

For Acura, profit = 26,000 - 10,000 = $16,000

For Honda, profit = 15,000 - 10,000 = $5,000

So, joint profit for two cars = $16,000 + $5,000 = $21,000

Therefore, option C is correct.