AREC 202 Practice Exam QUESTIONS AND ANSWER 2024/2025 FULLY SOLVED 100%

AREC 202 Practice Exam QUESTIONS AND ANSWER 2024/2025 FULLY SOLVED 100% 1. The optimal level of any activity (for consumers, firms or governments) is where A) average benefits from this activity equal average costs of this activity. B) total benefits from this activity equal total costs of this activity. C) marginal benefits from this activity equal marginal costs of this activity. D) marginal benefits from this activity are maximized. 1. To decide whether to increase an activity by one unit you should compare A) opportunity costs and sunk costs B) marginal benefits and marginal costs C) average benefits and average costs B) marginal benefits and marginal costs 2. Assume the price for a can of Red Bull is $3. When you enter the supermarket you are willing to pay $4 for the first can, $3.50 for the second can, $2.75 for the third can and $1 for the fourth can. How many cans should you buy? A) 0 B) 1 C) 2 C) 2