a
Table 1-3
Baseball games
Marginal Benefit (in dollars)
1
$70
2
$60
3
$50
4
$40
5
$30
6
$20
7
$10
8
$5
203. Refer to Table 1-3. If the price of attending a baseball game is $45, how many baseball games will be attended by a consumer following the rule of rational choice?
a.
2 games
b.
3 games
c.
4 games
d.
5 games
ANSWER:
b
TABLE 1-4
Table 1-4 shows the marginal benefit to a consumer from viewing theatrical-release films each month:
Movie Tickets per Month
Marginal Benefit (in dollars)
1
$12.50
2
$11.50
3
$10.50
4
$9.50
5
$8.50
6
$7.50
7
$6.50
8
$5.50
204. Refer to Table 1-4. If the price of a movie ticket is $9, how many movie tickets per month will be purchased by a consumer following the rule of rational choice?
a.
2
b.
3
c.
4
d.
5
ANSWER:
c
205. The marginal cost of a vacation in Portugal is $6500. If the marginal benefit to Jaqen of a vacation in Portugal is $6900, what will he do?
a.
Jaqen will enjoy a net gain of $6800 if he vacations in Portugal.
b.
Jaqen will experience a net gain of $400 if he vacations in Portugal.
c.
Jaqen will lose $400 if he vacations in Portugal.
d.
Jaqen will be worse off if he vacations in Portugal.
ANSWER:
b
206. The marginal cost of a vacation in Belize is $3500. According to the rule of rational choice, if the marginal benefit to Rafael of a vacation in Belize is $3000, what will he do?
a.
Rafael will experience a net gain of $500 if he vacations in Belize.
b.
Rafael will choose not to vacation in Belize at this time.
c.
Rafael will borrow $500 and vacation in Belize.
d.
Rafael will experience a net gain of $3000 if he vacations in Belize.
ANSWER:
b
207. If people follow the rule of rational choice, which of the following options will they choose?
a.
the option that earns the most money
b.
the option that yields the largest net gain
c.
the option that equates the total benefits to their total cost
d.
the option that promotes the common good
ANSWER:
b
208. You lose $150 from your wallet and decide to miss an hour from work to search for it. What would an economist conclude from your behaviour?
a.
You estimate the expected cost of searching for one hour to be greater than $150.
b.
Your expected value of searching for the lost $150 for an hour is less than your hourly wage.
c.
You must earn more than $150 per hour.
d.
Your expected value of searching for the lost $150 for an hour exceeds your hourly wage.
ANSWER:
d
209. Despite the warning on a package of cigarettes about the potential health hazards of smoking, a person lights up a cigarette. What would an economist conclude?
a.
In the person's judgment, the expected marginal benefit of smoking the cigarette outweighs the expected marginal cost.
b.
In the person's judgment, the expected marginal cost of smoking the cigarette outweighs the expected marginal benefit.
c.
The person is behaving irrationally.
d.
The person has a positive marginal benefit.
ANSWER:
a
210. Pollution damages the environment we live in. When would an economist advise that we reduce air pollution?
a.
when air pollution is in excess of the levels experienced in the 1950s, when air was much cleaner near big cities
b.
when the total benefit from air pollution reduction just equals the total cost of pollution reduction