Economics Chapter 9 Section Sunk Costs 11 Multiple Choice Which

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Microeconom ics, 3e

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1. Multiple Choice: Mark owns a ranch in Colorado that co...

Question Mark owns a ranch in Colorado that costs $3.76 million per year to operate. Of

that, his explicit cost equals $3.29 million. Therefore his actual monetary cost of

running the ranch is:

2. Multiple Choice: When the marginal cost of producing s...

Question When the marginal cost of producing sweet potatoes equals the marginal benefit,

the sweet potato producer has:

Answer incurred economic losses.

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Points: 1

3. Multiple Choice: Jesse wants to maximize her net gains...

Question Jesse wants to maximize her net gains from working. She estimates that the 12th

hour of work per week yields $10 of additional monetary and nonmonetary benefits,

but involves $9 in additional costs. She should:

Answer

work for only 11 hours per week, since the 12th hour yields such a small net

gain.

4. Multiple Choice: Matt estimates the marginal benefit o…

Question Matt estimates the marginal benefit of eating one slice of pizza at $3. The marginal

benefit of the 2nd slice is $2, the marginal benefit of the third slice is $1, and the

marginal benefit of the 4th slice is $0. If the price is $1.50 per slice, to maximize

his net benefit Matt should eat:

Answer 1 slice.

Points: 1

5. Multiple Choice: In order to maximize the net gains fr…

Question In order to maximize the net gains from an activity, a Maeva should choose the

quantity at which the marginal:

Answer

benefit exceeds the marginal cost by the greatest amount.

6. Multiple Choice: After visiting many shoe stores at th...

Question After visiting many shoe stores at the mall, Michelle finally decided to buy the

snow boots at the fifth and last store she visited that day. It was possible the same

pair could be cheaper at some other mall. Her decision is based on which of the

following principles?

Answer

sunk cost

7. Multiple Choice: The principle of marginal analysis is…

Question The principle of marginal analysis is useful when trying to:

Answer find ways to average costs.

Points: 1

8. Multiple Choice: Economic theory asserts that an optim…

Question Economic theory asserts that an optimal decision is one that:

Answer

ignores implicit costs.

9. Multiple Choice: A sunk cost is:

Question A sunk cost is:

Points: 1

Incorrect

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Incorrect! A sunk cost is one that cannot be eliminated or lessened by any action

taken now. Section: Sunk Costs

10. Multiple Choice: Which costs should be ignored in maki...

Question Which costs should be ignored in making a decision?

Answer

marginal costs

11. Multiple Choice: Which of the following is a marginal ...

Question Which of the following is a marginal decision, rather than an either-or decision?

Answer

whether to recommend a friend for a job at your workplace

12. Multiple Choice: Economic theory asserts that:

Question Economic theory asserts that:

Answer costs incurred in the future should be ignored in making a decision.

Points: 1

13. Multiple Choice: In economic analysis marginal analysi...

Question In economic analysis marginal analysis is used to:

Answer

make an either-or decision.

14. Multiple Choice: If Tommy bought an iPad, he was offer…

Question If Tommy bought an iPad, he was offered a choice of either a $50 gift certificate

toward an iPad Smart Cover or a 1 in 200 chance to win a $250 iPod. Tommy

chose the $50 gift certificate. His decision is based on:

Answer

bounded rationality.

15. Multiple Choice: Which of the following explain the “c…

Question Which of the following explain the “concern about fairness“?

Points: 1

16. Multiple Choice: When the implicit cost of capital is ...

Question When the implicit cost of capital is positive, then the:

Answer

firm’s accounting profit will be less than its economic profit.

17. Multiple Choice: Economic theory asserts that:

Question Economic theory asserts that:

Points: 1

18. Multiple Choice: How do people maximize net gains from…

Question How do people maximize net gains from the decisions they make?

19. Multiple Choice: Which of the following statement is n...

Question Which of the following statement is not correct?

20. Multiple Choice: To the extent that a firm incurs an i…

Question To the extent that a firm incurs an implicit cost of capital:

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