Question 1

You should decide to go to a movie:

Accepted Answer

if the marginal benefit of the movie exceeds its marginal cost

Question 2

A person should consume more of something when its marginal:

Accepted Answer

benefit exceeds its marginal cost.

Question 3

An economic hypothesis:

Accepted Answer

is a possible explanation of cause and effect.

Question 4

Opportunity cost is best defined as:

Accepted Answer

the amount of one product that must be given up to produce one more unit of another product

Question 5

In economics, the pleasure, happiness, or satisfaction received from a product is called:

Accepted Answer

utility

Question 6

Rational behavior implies that everyone will make identical choices

Accepted Answer

False

Question 7

Opportunity cost is best defined as:

Accepted Answer

the amount of one product that must be given up to produce one more unit of another product

Question 8

A point inside the production possibilities curve is:

Accepted Answer

attainable, but the economy is inefficient

Question 9

The production possibilities curve tells us

Accepted Answer

the combinations of two goods that can be produced with society's available resources

Question 10

The assertion that There is no free lunch means that:

Accepted Answer

all production involves the use of scarce resources and thus the sacrifice of alternative goods

Question 11

For a market system, which of the following best answers the question, What goods and services will be produced?

Accepted Answer

Goods and services that are profitable

Question 12

Human specialization, or the division of labor:

Accepted Answer

increases output by enabling workers to take advantage of differences in their skills

Question 13

The market system is characterized by:

Accepted Answer

private property rights

Question 14

The coincidence of wants problem associated with barter refers to the fact that:

Accepted Answer

for exchange to occur each seller must have a product that some buyer wants

Question 15

The market system's answer to the fundamental question How will the system accommodate change? is essentially:

Accepted Answer

Through the guiding function of prices and the incentive function of profits.

Question 16

The invisible hand concept suggests that:

Accepted Answer

assuming competition, private and public interests will coincide.

Question 17

Consumer sovereignty means that:

Accepted Answer

buyers determine what will be produced based on their dollar votes for the goods and services offered by sellers.

Question 18

The market system's answer to the fundamental question How will the goods and services be produced? is essentially:

Accepted Answer

Using the least-cost production techniques.

Question 19

The simple circular flow diagram shows that:

Accepted Answer

households are on the selling side of the resource market and on the buying side of the product market.s and services

Question 20

Broadly defined, competition involves:

Accepted Answer

. independently acting buyers and sellers and freedom

Micro Ch 1 & 2 Quiz

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