Econ 212 exam 1 || 100% CORRECT SOLUTIONS
Which of the following best describes scarce resources? correct answers Resources for which
the quantity that people want exceeds the quantity that is freely available
Which of the following statements is TRUE? correct answers Both life-saving drugs and ice
cream are examples of scarce goods.
Economics is primarily the study of ________. correct answers agents' choices and their
impact on society
Which of the following is an example of a positive economic statement? correct answers An
increase in income causes an increase in savings.
Which of the following statements is TRUE? correct answers Normative statements depend
on personal preferences.
Which of the following statements correctly highlights the difference between
microeconomics and macroeconomics? correct answers Microeconomics deals with a small
part of the economy, whereas macroeconomics deals with aggregate economic performance.
Economic reasoning allows economic agents to make decisions ________. correct answers
by comparing the costs and benefits of various options
Which of the following does NOT illustrate one of the three principles of economics? correct
answers Jessica is looking for a new job, but there are no jobs available.
Which of the following statements is TRUE of optimization? correct answers Economic
agents who optimize attempt to choose the best feasible option, given the information that
they have.
A consumer has $40 that he wants to spend. He faces four choices: a camera that costs $60, a
cell phone that costs $150, a book that costs $10, and a Bluetooth speaker that costs $45.
Which of the following is a feasible option for the consumer? correct answers The book
Sam pays $600 for 30 days of guitar classes. He attends an hour-long class every day. If,
instead of attending class, he works at a part-time job, he would be paid $5 an hour.
Alternatively, he could work at a fast-food outlet and earn $9 per hour. Once he has already
paid a nonrefundable fee of $600 to enroll in the class, what is his opportunity cost of
attending each hour of class? correct answers $9
Maria has to choose between driving and taking a train to destination A. Traveling by train
will cost her $400 and will take 4 hours. Driving to destination A takes 6 hours, and the
required amount of gasoline costs $250. Her opportunity cost of time is $15 per hour. Refer
to the scenario above. What is the total cost involved if Maria chooses to travel by train?
correct answers $460
Maria has to choose between driving and taking a train to destination A. Traveling by train
will cost her $400 and will take 4 hours. Driving to destination A takes 6 hours, and the
required amount of gasoline costs $250. Her opportunity cost of time is $15 per hour.Refer to
, the scenario above. If the opportunity cost of time increases to $80 per hour, which of the
following statements is TRUE? correct answers Maria should choose to travel by train, as it
saves her $10.
Roberta is moving to be closer to her children. Roberta is a nurse and makes $45 per hour.
She has to decide whether to hire movers to pack up her belongings or pack it all up herself.
The movers will charge $1,000 to supply packing materials and pack up all of Roberta's
belongings. It would take 20 hours for her to pack up herself, and she would need to spend
$300 on packing materials. Refer to the scenario above, what is Roberta's net benefit of hiring
the movers? correct answers -$200
Which of the following is TRUE of equilibrium? correct answers Equilibrium refers to a
situation where all economic agents simultaneously optimize after considering one another's
actions.
Assume that a house is rented by four students. When it comes to keeping the house clean,
each of the four roommates has an incentive to leave the cleaning to the others. As a result,
the house is never clean. Which of the following is the best solution to this problem of free
riding? correct answers Requiring every roommate to contribute to a cleaning service
Which of the following statements is TRUE? correct answers Testing with data is essential to
developing a good theory.
Which of the following statements is TRUE? correct answers Testing with data enables
economists to distinguish between good models and bad models.
Which of the following is a feature of the scientific method? correct answers The scientific
method allows improvisation and correction of inconsistent models.
Which of the following statements is TRUE of models? correct answers It is more important
for a model to be simple and useful than to be precisely accurate.
Which of the following statements is TRUE? correct answers Hypotheses are predictions that
can be tested with data.
A model is based on an assumption that an additional year of education increases a student's
future wage by 20 percent. Refer to the scenario above. Which of the followings statements is
TRUE of the model? correct answers The predictions of this model can be verified
empirically.
Which of the following is a key property of models? correct answers All economic models
begin with assumptions.
The following table shows the monthly wages of five different individuals. Refer to the table
above. What is the average monthly wage? correct answers $558
Which of the following statements is TRUE? correct answers Arguments by example are
appropriate when contradicting a blanket statement.
Which of the following best describes scarce resources? correct answers Resources for which
the quantity that people want exceeds the quantity that is freely available
Which of the following statements is TRUE? correct answers Both life-saving drugs and ice
cream are examples of scarce goods.
Economics is primarily the study of ________. correct answers agents' choices and their
impact on society
Which of the following is an example of a positive economic statement? correct answers An
increase in income causes an increase in savings.
Which of the following statements is TRUE? correct answers Normative statements depend
on personal preferences.
Which of the following statements correctly highlights the difference between
microeconomics and macroeconomics? correct answers Microeconomics deals with a small
part of the economy, whereas macroeconomics deals with aggregate economic performance.
Economic reasoning allows economic agents to make decisions ________. correct answers
by comparing the costs and benefits of various options
Which of the following does NOT illustrate one of the three principles of economics? correct
answers Jessica is looking for a new job, but there are no jobs available.
Which of the following statements is TRUE of optimization? correct answers Economic
agents who optimize attempt to choose the best feasible option, given the information that
they have.
A consumer has $40 that he wants to spend. He faces four choices: a camera that costs $60, a
cell phone that costs $150, a book that costs $10, and a Bluetooth speaker that costs $45.
Which of the following is a feasible option for the consumer? correct answers The book
Sam pays $600 for 30 days of guitar classes. He attends an hour-long class every day. If,
instead of attending class, he works at a part-time job, he would be paid $5 an hour.
Alternatively, he could work at a fast-food outlet and earn $9 per hour. Once he has already
paid a nonrefundable fee of $600 to enroll in the class, what is his opportunity cost of
attending each hour of class? correct answers $9
Maria has to choose between driving and taking a train to destination A. Traveling by train
will cost her $400 and will take 4 hours. Driving to destination A takes 6 hours, and the
required amount of gasoline costs $250. Her opportunity cost of time is $15 per hour. Refer
to the scenario above. What is the total cost involved if Maria chooses to travel by train?
correct answers $460
Maria has to choose between driving and taking a train to destination A. Traveling by train
will cost her $400 and will take 4 hours. Driving to destination A takes 6 hours, and the
required amount of gasoline costs $250. Her opportunity cost of time is $15 per hour.Refer to
, the scenario above. If the opportunity cost of time increases to $80 per hour, which of the
following statements is TRUE? correct answers Maria should choose to travel by train, as it
saves her $10.
Roberta is moving to be closer to her children. Roberta is a nurse and makes $45 per hour.
She has to decide whether to hire movers to pack up her belongings or pack it all up herself.
The movers will charge $1,000 to supply packing materials and pack up all of Roberta's
belongings. It would take 20 hours for her to pack up herself, and she would need to spend
$300 on packing materials. Refer to the scenario above, what is Roberta's net benefit of hiring
the movers? correct answers -$200
Which of the following is TRUE of equilibrium? correct answers Equilibrium refers to a
situation where all economic agents simultaneously optimize after considering one another's
actions.
Assume that a house is rented by four students. When it comes to keeping the house clean,
each of the four roommates has an incentive to leave the cleaning to the others. As a result,
the house is never clean. Which of the following is the best solution to this problem of free
riding? correct answers Requiring every roommate to contribute to a cleaning service
Which of the following statements is TRUE? correct answers Testing with data is essential to
developing a good theory.
Which of the following statements is TRUE? correct answers Testing with data enables
economists to distinguish between good models and bad models.
Which of the following is a feature of the scientific method? correct answers The scientific
method allows improvisation and correction of inconsistent models.
Which of the following statements is TRUE of models? correct answers It is more important
for a model to be simple and useful than to be precisely accurate.
Which of the following statements is TRUE? correct answers Hypotheses are predictions that
can be tested with data.
A model is based on an assumption that an additional year of education increases a student's
future wage by 20 percent. Refer to the scenario above. Which of the followings statements is
TRUE of the model? correct answers The predictions of this model can be verified
empirically.
Which of the following is a key property of models? correct answers All economic models
begin with assumptions.
The following table shows the monthly wages of five different individuals. Refer to the table
above. What is the average monthly wage? correct answers $558
Which of the following statements is TRUE? correct answers Arguments by example are
appropriate when contradicting a blanket statement.
