A person should consume more of something when its marginal:

benefit exceeds its marginal cost.

The economizing problem is one of deciding how to make the best use of:

limited resources to satisfy virtually unlimited wants.

Which one of the following expressions best states the idea of opportunity cost?

"There is no such thing as a free lunch."

Which of the following is a positive statement?

The temperature is 92 degrees today.

The typical production possibilities curve is:

a downsloping line that is concave to the origin.

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Limits, Alternatives, and Choices

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The basics of economics

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Answers

1
A person should consume more of something when its marginal:
cost exceeds its marginal benefit.
benefit is still positive.
cost equals its marginal benefit.
benefit exceeds its marginal cost.
2
A point inside a production possibilities curve best illustrates:
unemployment.
the use of best-available technology.
the efficient use of resources.
unlimited wants.
3
The economizing problem is one of deciding how to make the best use of:
virtually unlimited resources to satisfy unlimited wants.
limited resources to satisfy limited wants.
limited resources to satisfy virtually unlimited wants.
unlimited resources to satisfy limited wants.
4
Which one of the following expressions best states the idea of opportunity cost?
"He who hesitates is lost."
"There is no such thing as a free lunch."
"A penny saved is a penny earned."
"All that glitters is not gold."
5
The term "ceteris paribus" means:
prosperity inevitably follows recession.
that economics deals with facts, not values.
other things equal.
that if event A precedes event B, A has caused B.
6
Which of the following is a positive statement?
Summer evenings are nice when it cools off.
The temperature is 92 degrees today.
The humidity is too high today.
It is too hot to jog today.
7
Which of the following will not produce an outward shift of the production possibilities curve?
an increase in the quantity of a society's labor force
the reduction of unemployment
an upgrading of the quality of a nation's human resources
the improvement of a society's technological knowledge
8
The typical production possibilities curve is:
a straight upsloping line.
an up-sloping line that is concave to the origin.
a downsloping line that is concave to the origin.
a downsloping line that is convex to the origin.
9
Most of the disagreement among economists involves:
facts.
normative statements.
positive statements.
principles.
10
For economists, the word "utility" means:
rationality.
purposefulness.
pleasure and satisfaction.
versatility and flexibility.

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