Question 1

Which of the following best describes the concept of opportunity cost?

Accepted Answer

The value of the next best alternative that is forgone when a choice is made.

Question 2

Suppose you spend 2 hours watching a movie instead of working, and you earn $10 per hour at your job. What is the opportunity cost of watching the movie?

Accepted Answer

$20

Question 3

Which of the following is NOT an example of an economic agent?

Accepted Answer

A thunderstorm

Question 4

What is the main unifying feature of all things that economists study?

Accepted Answer

Choice

Question 5

Which of the following statements is an example of positive economics?

Accepted Answer

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

Question 6

If a person chooses not to drive 3 miles to buy a $$20 book for 10$$, what is the cost of not driving?

Accepted Answer

$10

Question 7

Which principle of economics is best illustrated by the statement: 'People try to choose the best available option'?

Accepted Answer

Optimization

Question 8

A situation in which no one would benefit by changing their own behavior is called:

Accepted Answer

Equilibrium

Question 9

Which of the following best describes the free rider problem?

Accepted Answer

When an individual enjoys the benefits of a situation without incurring the costs.

Question 10

Empiricism in economics refers to:

Accepted Answer

Using data to test theories and determine causality.

Question 11

Which of the following is an example of a scarce resource?

Accepted Answer

Air in a city with heavy pollution

Question 12

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

Accepted Answer

$4,745

Question 13

Which of the following is a normative economic statement?

Accepted Answer

The government should reduce taxes to increase employment.

Question 14

What is a budget constraint?

Accepted Answer

The set of things a person can choose to do or buy without exceeding their budget.

Question 15

Which of the following best illustrates a trade-off?

Accepted Answer

Choosing to study for an exam instead of going to a party.

Question 16

Which of the following is NOT a benefit of studying economics, according to the materials?

Accepted Answer

Guaranteed employment

Question 17

If a group is not in equilibrium, what does this imply?

Accepted Answer

At least one person could be better off by changing their behavior.

Question 18

Which of the following is a real-world example of opportunity cost?

Accepted Answer

Missing out on overtime pay to attend a family event.

Question 19

Which principle of economics is most closely associated with using data to test theories?

Accepted Answer

Empiricism

Question 20

Microeconomics is best defined as:

Accepted Answer

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

Chapter 1: The Principles and Practice of Economics – Microeconomics Study Notes

Study Guide - Practice Questions

Study Guide - Flashcards