Q: Suppose you spend 1 hour per day on social media, and your opportunity cost of time is $13/hour. What is the annual opportunity cost of your time spent on social media?

$$ (1 \times 365 \times 13) = 4$$,745

Question 1

Which of the following best describes the first principle of economics?

Accepted Answer

People try to choose the best available option given their information, known as optimization.

Question 2

Suppose you spend 1 hour per day on social media, and your opportunity cost of time is $13/hour. What is the annual opportunity cost of your time spent on social media?

Accepted Answer

$$ (1 	imes 365 	imes 13) = 4$$,745

Question 3

Which of the following is an example of an economic agent?

Accepted Answer

All of the above

Question 4

What does it mean if a resource is 'scarce'?

Accepted Answer

The quantity people want often exceeds the quantity available.

Question 5

Which of the following best defines opportunity cost?

Accepted Answer

The best alternative use of a resource.

Question 6

If you choose to see a two-hour movie instead of working, and you earn $10/hour at your job, what is your opportunity cost in dollars?

Accepted Answer

$$ (2 	imes 10) = 20$$

Question 7

Which principle of economics is illustrated when economists use data to test theories about human behavior?

Accepted Answer

Empiricism

Question 8

A situation in which no one would benefit by changing his or her own behavior is called:

Accepted Answer

Equilibrium

Question 9

Which of the following is NOT a feature of normative economics?

Accepted Answer

Describes what people actually do.

Question 10

Suppose you have a budget of $$100. You want to buy a 20 $$item and a $90 item. What is your budget constraint?

Accepted Answer

You cannot buy both items without exceeding your budget.

Question 11

Which of the following is an example of a trade-off?

Accepted Answer

Choosing to spend time studying instead of going out with friends.

Question 12

Which of the following statements about equilibrium is correct?

Accepted Answer

Equilibrium occurs when everyone is optimizing and no one can be better off by changing their choice.

Question 13

The free rider problem occurs when:

Accepted Answer

Individuals enjoy the benefits of a situation without incurring the costs.

Question 14

Which of the following is a positive economic statement?

Accepted Answer

"Some people took more than one piece of candy and not everyone got a piece."

Question 15

Microeconomics is best defined as:

Accepted Answer

The study of how individuals, firms, and governments make choices.

Question 16

If the opportunity cost of attending a concert is missing 3 hours of work at $15/hour, what is the total opportunity cost?

Accepted Answer

$$ (3 	imes 15) = 45$$

Question 17

Which of the following is NOT an example of empiricism in economics?

Accepted Answer

Making recommendations without using data.

Question 18

Which of the following is a normative economic statement?

Accepted Answer

"Society should ensure everyone gets a fair share."

Question 19

Which of the following is the unifying feature of all things economists study?

Accepted Answer

Choice

Question 20

If a person chooses to drive 3 miles to buy a product for $$10 instead of buying it for 20 $$nearby, what concept does this illustrate?

Accepted Answer

Trade-off and opportunity cost

Principles and Practice of Microeconomics: Chapter 1 Study Notes

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