Microeconomics Questions 1. You purchase a concert ticket for $100 plus you take
ID: 1219652 • Letter: M
Question
Microeconomics Questions
1. You purchase a concert ticket for $100 plus you take a day off of work to see the concert. You would have earned $60. What is the opportunity cost of attending the concert?
2. At an amusement park you are charged a fixed price for admission, which includes unlimited rides on coasters. Some people try to ride the rides as often as possible to maximize the value of their admission. Is riding a coaster over and over to get one's moneys worth an example of thinking on the margin?
A. No, riding again and again allows one to maximize their average costs per ride
B. No, thinking on the margin only considers the average benefit of doing something C. Yes, marginal benefit increases after each ride
D. Yes, getting your money's worth is the same thing as thinking on the margin
3. Which of the following sentences best represents the correct meaning of a positive question and a normative question?
A. Positive and normative questions both reflect value judgements
B. A normative question considers judgement while a positive question reflects value judgements
C. A positive question considers evidence while normative questions reflect value judgements
D. Positve and normative questions both consider evidence and proof
4. Does economics have everything to do with money?
A. Yes, money is the basis of economics
B. Yes, all decisions in the economy involve money
C. No, economics involves satisfying limited wants with unlimited resources
D. No, economics involves satisfying wants by using resources wisely. We must make choices based on limited resources.
5. Does your going to college have anything to do with expanding choices or reducing scarcity?
A. No, oppurtunity costs do not exist when it comes to going to college
B. No, scarcity exists; however, since it is dealing with college no oppurtinity costs exist
C. Yes, scarcity exists; therefore, it is important for the student to examine the tradeoffs of obtaining a college degree
D. Yes, scarcity does exist but it cannot be reduced
Explanation / Answer
1.
Opportunity cost is the benefit foregone for choosing an alternative course of action.
Opportunity cost = Implicit cost + Explicit cost
= $60 + $100
= $160 (Answer)