Microeconomics and Behavior C1 Quiz

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1 Economics 1 Quiz on Microeconomics and Behavior C1 Quiz, created by jedgar434 on 18/04/2016.
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Quiz by jedgar434, updated more than 1 year ago
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Created by jedgar434 over 8 years ago
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Resource summary

Question 1

Question
Microeconomics entails the study of how people choose under [blank_start]conditions of scarcity[blank_end].
Answer
  • conditions of scarcity

Question 2

Question
Economists answer questions of choice by comparing the [blank_start]costs[blank_end] and [blank_start]benefits[blank_end] of doing the activity in question.
Answer
  • costs
  • benefits

Question 3

Question
We define B(x) as the [blank_start]maximum[blank_end] dollar amount [blank_start]you would be willing to pay to do x.[blank_end]
Answer
  • maximum
  • you would be willing to pay to do x.

Question 4

Question
C(x) is the value of all the resources you must [blank_start]give up[blank_end] in order to do x.
Answer
  • give up

Question 5

Question
The [blank_start]reservation price[blank_end] of activity x is the price at which a person would be indifferent between doing x and not doing x.
Answer
  • reservation price

Question 6

Question
If B(x) and C(x) happened to be equal, you would be [blank_start]indifferent[blank_end] between the two alternatives.
Answer
  • indifferent

Question 7

Question
Economists believe that useful insights into our behavior can be gained by assuming that we act as if governed by the rules of [blank_start]rational decision making[blank_end].
Answer
  • rational decision making

Question 8

Question
The opportunity cost of x is the [blank_start]value[blank_end] of all that must be [blank_start]sacrificed[blank_end] to do x.
Answer
  • value
  • sacrificed

Question 9

Question
Not incurring a cost is the same as getting [blank_start]a benefit[blank_end].
Answer
  • a benefit

Question 10

Question
[blank_start]Sunk costs[blank_end] are costs that are beyond recovery at the moment a decision is made.
Answer
  • Sunk costs

Question 11

Question
Sunk costs should always be [blank_start]ignored[blank_end] in decision making.
Answer
  • ignored

Question 12

Question
In the all you can eat pizza experiment, it was the group who did not receive the refund that [blank_start]ate more[blank_end]. This should not have been the case as they should have stopped eating when B(x), x being another slice of pizza, was [blank_start]zero[blank_end]. This was the case with the group that [blank_start]did receive the refund[blank_end].
Answer
  • ate more
  • zero
  • did receive the refund

Question 13

Question
If you save $10 dollars on a $20 dollar radio with a 15 minute drive, the value of travelling 15 minutes to save $10 on a $1000 dollar tv would be [blank_start]equal[blank_end].
Answer
  • equal

Question 14

Question
When using the cost-benefit test, you should express costs and benefits in [blank_start]absolute[blank_end] dollar terms. Comparing [blank_start]percentages[blank_end] is not a fruitful way to think about decisions like these.
Answer
  • percentages
  • absolute

Question 15

Question
To answer the question of “Should I increase the level by which I am currently engaging in activity x?”, we must compare the [blank_start]benefit[blank_end] and [blank_start]cost[blank_end] of an [blank_start]additional unit[blank_end] of activity.
Answer
  • additional unit
  • benefit
  • cost

Question 16

Question
The cost of an additional unit of activity is called the [blank_start]marginal cost[blank_end] of the activity, and the benefit of an additional unit is called its [blank_start]marginal benefit[blank_end].
Answer
  • marginal cost
  • marginal benefit

Question 17

Question
The optimal amount of activity is the quantity for which the [blank_start]marginal benefit[blank_end] of conversation is just [blank_start]equal[blank_end] to its [blank_start]marginal cost[blank_end].
Answer
  • marginal benefit
  • equal
  • marginal cost

Question 18

Question
The downward slope of a marginal benefit curve reflects the fact that the value of an [blank_start]additional unit[blank_end] declines with the total amount of activity that has occurred thus far.
Answer
  • additional unit

Question 19

Question
The four most common pitfalls in cost-benefit analysis are: failing to include [blank_start]opportunity[blank_end] costs; failing to ignore [blank_start]sunk costs[blank_end]; measuring costs and benefits as [blank_start]proportions[blank_end] rather than [blank_start]absolute[blank_end] values; and failing to recognise the difference between [blank_start]average[blank_end] and [blank_start]marginal[blank_end] cost and benefits.
Answer
  • opportunity
  • sunk costs
  • proportions
  • absolute
  • average
  • marginal

Question 20

Question
A [blank_start]normative question[blank_end] is a question about what policies or institutional arrangements lead to the best outcomes.
Answer
  • normative question

Question 21

Question
A positive question is a question about the [blank_start]consequences[blank_end] of [blank_start]specific[blank_end] policies or institutional arrangements.
Answer
  • consequences
  • specific
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