17) Mothers Against Drunk Drivers (MADD) campaigned to increase the legal penalties of drunk driving. This successful campaign ________ of drunk driving.
A) increased the marginal benefit
B) decreased the marginal benefit
C) increased the marginal cost
D) decreased the marginal cost
E) had no effect on the marginal cost or marginal benefit but did affect the total benefit
Answer: C
Topic: Marginal cost
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
18) The marginal cost of an activity ________ as you do more of it.
A) increases
B) decreases
C) doesn't change
D) changes ONLY IF the marginal benefit of the activity does not change
E) changes ONLY IF the marginal benefit of the activity changes
Answer: A
Topic: Marginal cost
Skill: Level 1: Definition
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
19) A professor changes the penalty for cheating on exams from getting a 0 on the exam to getting an F in the course. The professor has
A) increased the marginal cost of cheating.
B) decreased the marginal benefit of cheating.
C) made all the students act in the social interest.
D) recognized that students don't respond to incentives.
E) recognized that students don't make rational choices.
Answer: A
Topic: Marginal cost
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
20) The benefit of a one-unit increase in an activity
A) is called marginal cost.
B) is always greater than the opportunity cost of that activity.
C) decreases as you do more of it.
D) is measured by what you must give up.
E) is called rational-choice benefit.
Answer: C
Topic: Marginal benefit
Skill: Level 1: Definition
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
21) Huey has eaten two hamburgers and is considering a third. The marginal benefit in his decision is the pleasure from consuming
A) the two previous hamburgers.
B) all three hamburgers.
C) just the third hamburger.
D) just the second hamburger.
E) the third hamburger minus the pleasure from consuming zero hamburgers.
Answer: C
Topic: Marginal benefit
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Analytic skills
22) What typically happens to benefits as the amount of an activity is increased?
A) Total benefits remain constant.
B) Marginal benefit increases.
C) Marginal benefit remains constant.
D) Marginal benefit decreases.
E) The marginal benefit changes ONLY IF the marginal cost changes.
Answer: D
Topic: Marginal benefit
Skill: Level 1: Definition
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
23) Suppose you eat two hamburgers for lunch. The marginal benefit of the first burger is ________ of the second burger.
A) larger than the marginal benefit
B) smaller than the marginal benefit
C) equal to the marginal benefit
D) not related to the marginal benefit
E) equal to the marginal cost AND the marginal benefit
Answer: A
Topic: Marginal benefit
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Analytic skills
24) A choice made by comparing all relevant alternatives systematically and incrementally is
A) an opportunity cost.
B) a choice on the margin.
C) a benefit.
D) a sunk cost.
E) a choice made in the social interest.
Answer: B
Topic: On the margin
Skill: Level 1: Definition
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
25) Making choices on the margin means
A) scribbling on the edges of your notebook paper.
B) comparing all relevant alternatives systematically and incrementally.
C) making a decision based on emotions.
D) making decisions in the largest possible increments.
E) taking account of all marginal benefits, all opportunity costs, and all sunk costs.
Answer: B
Topic: On the margin
Skill: Level 1: Definition
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
26) Decision making on the margin involves
A) comparing the marginal cost and marginal benefits when making a decision.
B) comparing the total cost and the total benefit when making a decision.