A) definitely going to sleep.
B) studying, since this is the choice she opted for.
C) sleeping or going out for dinner, whichever she would have preferred the most.
D) sleeping and going out for dinner.
E) definitely going out to dinner because she must eat at some time.
Answer: C
Topic: Opportunity cost
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Analytic skills
71) If there is no scarcity,
A) the opportunity cost of an action would be greater than its sunk cost.
B) an action would have zero opportunity cost.
C) choices are no longer rational.
D) marginal cost of an action is greater than its marginal benefit.
E) all marginal benefits would equal zero.
Answer: B
Topic: Opportunity cost
Skill: Level 3: Using models
Section: Checkpoint 1.2
Status: Old
AACSB: Analytic skills
72) The benefit of an activity is
A) purely objective and measured in dollars.
B) the gain or pleasure that it brings.
C) the value of its opportunity cost.
D) measured by what must be given up to get one more unit of the activity.
E) not measurable on the margin.
Answer: B
Topic: Benefit
Skill: Level 1: Definition
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
73) The ________ of something is the gain or pleasure that it brings.
A) opportunity cost
B) benefit
C) marginal cost
D) rational choice
E) rational margin
Answer: B
Topic: Benefit
Skill: Level 1: Definition
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
74) The cost of a one-unit increase in an activity
A) is called the total one-unit cost.
B) is called the marginal cost.
C) decreases as more of the activity is done.
D) is called the marginal benefit/cost.
E) is called the unit cost.
Answer: B
Topic: Marginal cost
Skill: Level 1: Definition
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
75) The marginal benefit of an activity is
i. the benefit from a one-unit increase in the activity.
ii. the benefit of a small, unimportant activity.
iii. measured by what the person is willing to give up to get one additional unit of the activity.
A) i only
B) ii only
C) iii only
D) i and iii
E) ii and iii
Answer: D
Topic: Marginal benefit
Skill: Level 1: Definition
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
76) The additional benefit of increasing some activity by one-unit is called the
A) marginal benefit.
B) opportunity cost.
C) total benefit.
D) scarcity.
E) unit cost/benefit.
Answer: A
Topic: Marginal benefit
Skill: Level 1: Definition
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
77) If the marginal benefit of the next slice of pizza exceeds the marginal cost, you will
A) eat the slice of pizza.
B) not eat the slice of pizza.
C) be unable to choose between eating or not eating.
D) eat half the slice.
E) More information is needed about how much the marginal benefit exceeds the marginal cost to determine if you will or will not eat the slice.
Answer: A
Topic: Making rational choices
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
78) When people make rational choices, they
A) behave selfishly.
B) do not consider their emotions.
C) weigh the costs and benefits of their options and act to satisfy their wants.
D) necessarily make a decision in the social interest.
E) are necessarily making the best decision.
Answer: C
Topic: Rational choice
Skill: Level 1: Definition
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
79) By donating $1,000 to the Salvation Army, Caroline reduces her taxable income. To Caroline, the reduction in her taxable income is
A) a marginal benefit.
B) an opportunity cost.
C) an incentive.
D) a marginal cost.
E) the margin.
Answer: C
Topic: Incentives
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
80) When the Dallas Cowboys score more than 30 points in a game, they win the game. This is an example of
A) an economic theory.