BMAL 590 WEEK 6 MICROECONOMICS EXAM
QUESTIONS AND ANSWERS WITH COMPLETE
SOLUTIONS GRADED A++
People respond to incentives blank_______.
by calculating their individual costs and benefits and determining which is greater
After much consideration, you have chosen Cancun over Ft. Lauderdale as your Spring Break
destination this year. However, Spring Break is still months away, and you may reverse this decision.
Which of the following events would prompt you to reverse this decision?
The marginal cost of going to Ft. Lauderdale decreases.
A tradeoff exists between a clean environment and a higher level of income in that blank_______.
laws that reduce pollution raise costs of production and reduce incomes
An incentive ______.
could be either a reward or a penalty
Bill is restoring a car and has already spent $4000 on the restoration. He expects to be able to sell the
car for $5800. Bill discovers that he needs to do an additional $2400 of work to make the car worth
$5800 to potential buyers. He could also sell the car now, without completing the additional work, for
$3800. What should he do?
, He should sell the car now for $3800.
Economists assume that people are motivated by blank_______.
rational self-interest
The fundamental reason people must choose between goods to buy and consume is because of
blank______.
scarcity
A rational student will continue studying in a given study session until blank______.
the marginal value of the last unit studied equals the marginal cost of the last unit
In economics, the cost of doing something is blank_______.
the value of the next best opportunity not taken
The optimal amount of studying is determined by comparing the blank_______
marginal benefit and the marginal cost of studying
A shift in the demand curve denotes _______.
a change in demand
Consider inferior goods. As real incomes rise, consumers tend to buy inferior goods inblank________.
less quantity
The law of supply states that, holding other factors constant, as price increases blank_______.
quantity supplied increases
QUESTIONS AND ANSWERS WITH COMPLETE
SOLUTIONS GRADED A++
People respond to incentives blank_______.
by calculating their individual costs and benefits and determining which is greater
After much consideration, you have chosen Cancun over Ft. Lauderdale as your Spring Break
destination this year. However, Spring Break is still months away, and you may reverse this decision.
Which of the following events would prompt you to reverse this decision?
The marginal cost of going to Ft. Lauderdale decreases.
A tradeoff exists between a clean environment and a higher level of income in that blank_______.
laws that reduce pollution raise costs of production and reduce incomes
An incentive ______.
could be either a reward or a penalty
Bill is restoring a car and has already spent $4000 on the restoration. He expects to be able to sell the
car for $5800. Bill discovers that he needs to do an additional $2400 of work to make the car worth
$5800 to potential buyers. He could also sell the car now, without completing the additional work, for
$3800. What should he do?
, He should sell the car now for $3800.
Economists assume that people are motivated by blank_______.
rational self-interest
The fundamental reason people must choose between goods to buy and consume is because of
blank______.
scarcity
A rational student will continue studying in a given study session until blank______.
the marginal value of the last unit studied equals the marginal cost of the last unit
In economics, the cost of doing something is blank_______.
the value of the next best opportunity not taken
The optimal amount of studying is determined by comparing the blank_______
marginal benefit and the marginal cost of studying
A shift in the demand curve denotes _______.
a change in demand
Consider inferior goods. As real incomes rise, consumers tend to buy inferior goods inblank________.
less quantity
The law of supply states that, holding other factors constant, as price increases blank_______.
quantity supplied increases
