Q: Which equation correctly represents the calculation of average benefit?

$$ \text{Average Benefit} = \frac{\text{Total Benefit}}{\text{Number of Units}} $$

Question 1

Which of the following best describes the Scarcity Principle in economics?

Accepted Answer

Resources are limited, but needs and wants are unlimited, so choices must be made.

Question 2

According to the Cost-Benefit Principle, a rational person should take an action if:

Accepted Answer

The benefits are at least as great as the costs.

Question 3

Which of the following is an example of a macroeconomic issue?

Accepted Answer

U.S. national unemployment rate.

Question 4

Suppose a company is considering launching a new product. The total cost of 3 launches is $$12, and the total cost of 2 launches is 7. $$What is the marginal cost of the third launch?

Accepted Answer

$5

Question 5

Which of the following best defines 'marginal benefit'?

Accepted Answer

The benefit received from consuming one additional unit of a good or service.

Question 6

If the average cost of 4 launches is $$5, what is the total cost of 4 launches? (Use the formula $$ 	ext{Average Cost} = \frac{	ext{Total Cost}}{	ext{Number of Launches}} $)

Accepted Answer

$20

Question 7

Which of the following scenarios best illustrates the concept of 'thinking at the margin'?

Accepted Answer

Choosing to study for one more hour instead of watching TV.

Question 8

A rational person, according to economic theory, is someone who:

Accepted Answer

Has well-defined goals and tries to fulfill those goals as best as possible.

Question 9

Which of the following is NOT a microeconomic topic?

Accepted Answer

Post COVID inflation trends.

Question 10

If the marginal benefit of a fifth launch is $$12 and the marginal cost is 8$$, according to the Cost-Benefit Principle, should the launch be undertaken?

Accepted Answer

Yes, because the marginal benefit is greater than the marginal cost.

Question 11

Which equation correctly represents the calculation of average benefit?

Accepted Answer

$$ 	ext{Average Benefit} = \frac{	ext{Total Benefit}}{	ext{Number of Units}} $$

Question 12

Which of the following best describes a sunk cost?

Accepted Answer

A cost that has already been incurred and cannot be recovered.

Question 13

Suppose the total benefit of 2 launches is $$10, and the total benefit of 3 launches is 15. $$What is the marginal benefit of the third launch?

Accepted Answer

$5

Question 14

Which of the following statements about incentives is correct?

Accepted Answer

Incentives can influence the choices people make by altering costs and benefits.

Question 15

If the total cost of 5 launches is $$32, what is the average cost per launch? (Use $$ 	ext{Average Cost} = \frac{	ext{Total Cost}}{	ext{Number of Launches}} $)

Accepted Answer

$6.40

Question 16

Which of the following is an example of a decision made using the Cost-Benefit Principle in a real-world context?

Accepted Answer

A government decides to build a new highway only if the expected benefits to society are greater than the construction costs.

Question 17

Which of the following best distinguishes macroeconomics from microeconomics?

Accepted Answer

Macroeconomics examines aggregate outcomes like inflation and unemployment, while microeconomics looks at individual and firm-level decisions.

Question 18

If the marginal cost of producing the fourth unit is $$8 and the marginal benefit is 6$$, what should a rational producer do according to the Cost-Benefit Principle?

Accepted Answer

Do not produce the fourth unit because the marginal cost exceeds the marginal benefit.

Question 19

Which of the following is a correct application of the Scarcity Principle in a real-world scenario?

Accepted Answer

A city government must choose between building a new park or repairing roads because it cannot afford both.

Question 20

Suppose the total cost of 2 launches is $$7 and the total cost of 1 launch is 3. $$What is the marginal cost of the second launch?

Accepted Answer

$4

Introduction to Economics: Scarcity, Cost-Benefit, and Marginal Analysis

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