Question 1

Which of the following best describes the scope of economics as presented in the course materials?

Accepted Answer

Economics is the study of how agents make choices to allocate scarce resources and how these choices affect society.

Question 2

Which of the following is an example of an economic agent as defined in the course?

Accepted Answer

All of the above.

Question 3

What is the opportunity cost of spending one hour surfing the web if you could alternatively earn 150 NOK per hour at a part-time job?

Accepted Answer

$$150$$

Question 4

Which principle of economics states that agents decide what to do by weighing all the pros and cons of the different available options?

Accepted Answer

Optimization

Question 5

Suppose the benefit of buying a burger is 50 NOK and the opportunity cost is 40 NOK. According to cost-benefit analysis, should you buy the burger?

Accepted Answer

Yes, because $$50 - 40 = 10 \u003e 0$$

Question 6

Which of the following best describes equilibrium in economics?

Accepted Answer

A situation where all agents are optimizing and no one can benefit by changing their behavior.

Question 7

A firm is considering two projects: Project A yields a profit of 100,000 NOK, and Project B yields a profit of 120,000 NOK. If the firm chooses Project A, what is the opportunity cost?

Accepted Answer

$$120,000$$

Question 8

Which of the following statements is an example of positive economic analysis?

Accepted Answer

Raising the minimum wage will increase unemployment among teenagers.

Question 9

In the context of the scientific method in economics, what is the main purpose of building models?

Accepted Answer

To provide simplified and useful descriptions of some aspect of reality.

Question 10

If a model predicts that each additional year of education increases wages by 10%, what is the predicted wage for someone with 4 more years of education, starting from a base wage of 1?

Accepted Answer

$$1.46$$

Question 11

Which of the following is a reason why correlation does not always imply causation?

Accepted Answer

Both A and B

Question 12

A government wants to know if a new tax policy causes a reduction in smoking rates. Which method is considered the gold standard for determining causality?

Accepted Answer

Randomized controlled experiment

Question 13

Which of the following best illustrates the concept of a trade-off?

Accepted Answer

Choosing to spend money on a concert ticket instead of saving it for a new phone.

Question 14

If the average wage for college graduates is $$51,780$$ and for high school graduates is $$32,941$$, what is the percentage increase in wages according to the data?

Accepted Answer

$$57\%$$

Question 15

Which of the following is NOT a principle emphasized by economists according to the course materials?

Accepted Answer

Maximization of government spending

Question 16

Suppose you have a budget constraint of $$5$$ hours: $$5 = 	ext{Hours surfing} + 	ext{Hours working}. If $$you spend $$2$$ hours surfing, how many hours can you work?

Accepted Answer

$$3$$

Question 17

Which of the following is an example of normative economic analysis?

Accepted Answer

The government should lower taxes to increase employment.

Question 18

Why do economists prefer to use many observations rather than anecdotal evidence when testing models?

Accepted Answer

Because more data reduces the likelihood that results are due to coincidence.

Question 19

Which of the following best describes the difference between positive and normative analysis?

Accepted Answer

Positive analysis describes what is; normative analysis prescribes what should be.

Question 20

If a firm chooses to build a factory in China because it expects higher profits than any alternative, which economic principle is being applied?

Accepted Answer

Optimization

Principles of Microeconomics: Core Concepts and Methods

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