Jenjuna's Business Model

Question 1
2 out of 2 points

A local restaurant offers an "all you can eat" Sunday brunch for $12. Jenica eats two servings but leaves half of a third helping uneaten. Why?

Selected Answer:

Her marginal value of an additional bite of food has fallen to zero.
Correct Answer:

Her marginal value of an additional bite of food has fallen to zero.

Question 2
2 out of 2 points

Websites, such as Craigslists and eBay, function as middlemen by

Selected Answer:

increasing the efficiency in matching sellers and buyers.
Correct Answer:

increasing the efficiency in matching sellers and buyers.

Question 3
2 out of 2 points

In a free market economy, innovative products or services will ultimately be judged

Selected
Answer:

by the consumer's willingness to purchase the product or service.
Correct Answer:

by the consumer's willingness to purchase the product or service.

Question 4
2 out of 2 points

How does the invisible hand principle explain why self-interested individuals pursue activities that benefit others?
Selected Answer:

The pursuit of profit and income gives individuals a strong incentive to provide goods and services that are highly valued by others.
Correct Answer:

The pursuit of profit and income gives individuals a strong incentive to provide goods and services that are highly valued by others.

Question 5
0 out of 2 points

The opportunity cost of building a civic center in your hometown would be the

Selected Answer:

necessary increase in tax revenues to finance the civic center construction.
Correct Answer:

highest valued bundle of other goods and services that must be forgone because of the civic center construction.

Question 6
2 out of 2 points

With the passage of time and advancements in technology, scarce resources

Selected Answer:

are transformed into goods and services more efficiently, but still remain scarce.
Correct Answer:

are transformed into goods and services more efficiently, but still remain scarce.

Question 7
2 out of 2 points

According to economic reasoning, you should offer one hour of volunteer service per week
when

Selected Answer:

The additional benefits of doing so are greater than the additional costs.
Correct Answer:

The additional benefits of doing so are greater than the additional costs.

Question 8
0 out of 2 points

What do economists mean when they state that a good is scarce?

Selected Answer:

There is a shortage or insufficient supply of the good at the existing price.
Correct Answer:

The amount of the good that people would like exceeds the supply freely available from existing resources.

Question 9
2 out of 2 points

Which of the following would be most likely to increase transaction costs?
Selected Answer:

A city ordinance bans large "superstores" in order to protect small, local businesses.
Correct Answer:

A city ordinance bans large "superstores" in order to protect small, local businesses.

Question 10
2 out of 2 points

To be economically successful, the entrepreneur must

Selected Answer:

combine resources in a manner that increases their value.
Correct Answer:

combine resources in a manner that increases their value.

Question 11
2 out of 2 points

How did people like Bill Gates and the late Sam Walton become so rich?

Selected Answer:

by providing highly valued goods and services to consumers at attractive prices
Correct Answer:

by providing highly valued goods and services to consumers at attractive prices

Question 12
2 out of 2 points

Countries are likely to reduce the ability of their citizens to achieve prosperity when they

Selected Answer:

interfere with voluntary exchange either domestically or internationally.
Correct Answer:

interfere with voluntary exchange either domestically or internationally.

Question 13
2 out of 2 points

Professional sports teams will trade the services of players only
if

Selected Answer:

both teams expect to benefit from the trade.
Correct Answer:

both teams expect to benefit from the trade.

Question 14
2 out of 2 points

If a society is going to get the most value from its resources, additional spending on pollution control should be undertaken

Selected Answer:

as long as the marginal benefits derived from pollution control are greater than or equal to the marginal costs.
Correct Answer:

as long as the marginal benefits derived from pollution control are greater than or equal to the marginal costs.

Question 15
2 out of 2 points

Economic analysis assumes that

Selected Answer:

Changes in the personal benefits and costs associated with a choice will exert a predictable influence on human behavior.
Correct Answer:

Changes in the personal benefits and costs associated with a choice will exert a predictable influence on human behavior.

Question 16
0 out of 2 points

Adam Smith believed that if people were free to pursue their own interests,

Selected Answer:

they would generally apply their talents to unproductive activities that would generate little value to society.
Correct Answer:

the public interest would be served quite well.

Question 17
2 out of 2 points

When gas prices rise sharply, as they did in 2007-2008, the "incentives matter" postulates of economics indicates that

Selected Answer:

consumers will adjust their driving habits, eventually reducing the quantity demanded for gas.
Correct Answer:

consumers will adjust their driving habits, eventually reducing the quantity demanded for gas.

Question 18
2 out of 2 points

In a market economy, when the government uses subsidies to keep a company in business even though it is unprofitable, a secondary effect of the subsidies will likely be that

Selected Answer:

resources that are being used unproductively will continue to be employed in unproductive uses.
Correct Answer:

resources that are being used unproductively will continue to be employed in unproductive uses.

Question 19
2 out of 2 points

"Mediocre economists often consider only the immediate direct effects of a change, whereas a good econom ist will also consider indirect effects that may only become observable over time." This statement most clearly emphasizes Selected Answer:

the importance of secondary effects.
Correct Answer:

the importance of secondary effects.

Question 20
2 out of 2 points

Which of the following most accurately states the economic significance of exchange?

Selected Answer:

Exchange creates value by moving goods from parties who value them less to parties who value them more.
Correct Answer:

Exchange creates value by moving goods from parties who value them less to parties who value them more.

Question 21
2 out of 2 points

When people specialize in goods and services that they can easily provide at a low cost

Selected Answer:

they can trade those goods for revenues and use the revenues to purchase goods that would have been costly to produce for themselves.
Correct Answer:

they can trade those goods for revenues and use the revenues to purchase goods that would have been costly to produce for themselves.

Question 22
2 out of 2 points

In a market economy, if you want to earn a high income, you will

Selected Answer:

need to provide others with goods and services they value highly.
Correct Answer:

need to provide others with goods and services they value highly.

Question 23
2 out of 2 points

Which of the following most accurately illustrates the impact of price incentives?

Selected Answer:

Consumer will adjust the amount they purchase in response to changes in prices.
Correct Answer:

Consumer will adjust the amount they purchase in response to changes in prices.

Question 24
2 out of 2 points

U.S. gross domestic product (in contrast to gross national product) measures the production and income of

Selected Answer:

people and factories located within the borders of the United States.
Correct Answer:

people and factories located within the borders of the United States.

Question 25
2 out of 2 points

When politicians push for "free healthcare", what they are actually advocating is

Selected Answer:

the use of tax revenues to cover the actual costs of the "free" healthcare.
Correct Answer:

the use of tax revenues to cover the actual costs of the "free" healthcare.

Question 26
2 out of 2 points

The price of a good will tend to fall when

Selected Answer:

there is excess supply of the good.
Correct Answer:

there is excess supply of the good.

Question 27
2 out of 2 points

When economic losses are present in a market, firms will tend to

Selected Answer:

exit from the market.
Correct Answer:

exit from the market.

Question 28
2 out of 2 points

If a firm is unable to cover the cost of the resources employed by the firm (including the opportunity cost of resources owned by the firm), the firm will

Selected Answer:

go out of business in the long run because it is making losses.
Correct Answer:

go out of business in the long run because it is making losses.

Question 29
2 out of 2 points

Does voluntary exchange create wealth?

Selected Answer:

Yes, exchange makes it possible for the trading partners to gain more value from the existing supply of goods and it also makes larger output levels possible.
Correct Answer:

Yes, exchange makes it possible for the trading partners to gain more value from the existing supply of goods and it also makes larger output levels possible.

Question 30
2 out of 2 points

The price that a person is willing to pay for a product or service is a good indication of

Selected Answer:

the value of that product or service to the buyer.
Correct Answer:

the value of that product or service to the buyer.