ECON Text 1

Economics assumes that people are motivated

A. to do What is best for their community
B. to act altruistically
C. to please God
D. to act in their own self interest

Which of the following is an example of normative economics? Give the best answer.
A. Should the government require immunizations for children?
B. Should the government lease lands to cattle ranchers?
C. Should the government limit the interest a credit card company can change?
D. All the above
E. Will the purchase of a patent increase the frim's profits?

In this course, we adopt the following definition of economics. Economics is
A. the study of markets
B. the study of trade
C. the study of abundance
D. what economists do
E. the study of couice

What is necessary for an economic choice?
A. money
B. two or more people
C. scarcity of a recource
D. all the above
E. none of the above

Which of the following is true about scarcity?
A. rich people do not face scarcity
B. all goods are becoming increasingly scarce
C. technological changes alter the goods that are scarce
D. once a good is scarce it will always be scarce

Which of the following is not an example of an economic choice?
A. How much T.V. should a person watch?
B. How much should a person save from each pay check?
C. How much sleep should a person get each night?
D. How much air should a person breathe during an exam?
E. How much time should a person study for a test?

In economics, what does it mean to say that people are rational?
A. People act in a methodical way
B. People act in their own self interest
C. People make better decisions with the help of others
D. People can only make a few decisions at a time

Which statement is true about other people who decide whether to get married in a year?
A. Everyone will consider the same 4 criteria as bob
B. Everyone will consider only 4 criteria
C. Everyone will reach the same decision as Bob
D. All of the above
E. None of the above

According to our class discussion, will regulations aimed at restricting household water use significantly reduce the amount of water societ uses?
A. yes
B. no

Suppose Mike is thinking of cheating on an English test. There is a 90% chance that he will not get caught. His benefit from cheating is 50 dollars and his cost is 500 dollars if cought.
Mike's expected benefit is
A. 500 dollars
B. 45 dollars
C. 450 dollars
D. 5 dollars
E. 50 dollars

Suppose Mike is thinking of cheating on an English test. There is a 90% chance that he will not get caught. His benefit from cheating is 50 dollars and his cost is 500 dollars if cought.
Mike's expected cost is
A. 500 dollars
B. 5 dollars
C. 45 dollars
D. 450 dollars
E. 50 dollars

Suppose Mike is thinking of cheating on an English test. There is a 90% chance that he will not get caught. His benefit from cheating is 50 dollars and his cost is 500 dollars if cought.
Cost = 50
Benefit = 45
Should Mike Cheat?
A. No because the expected cost is greater than the expected benefit
B. yes because the expected benefit is greater than the expected cost
C. Yes because the expected cost is greater than the expected benefit
D. No because the expected benefit is greater than the expected cost
E. He is indifferent between cheating and not cheating

Why do so many people break the law and illegally download music, but these smae people would never shop lift and steal products from a store?
A. Music is so much more valuable than the other products
B. The statement above is incorrect, people with internet access are much more likely to shop lift than they are to illegally download music.
C. It is very unlikely that they will get caught downloading a song
D. The fines if caught are almost nonexistent

Lee is considering whether to download music illegally from the internet. Suppose he places a $10 value on the album he wants to download. Also suppose he has 1% chance of getting caught. If he gets caught, the quthorities take the music he downloaded away from him and give him a $1,000 fine.
What is Lee's expected benefit from downloading music?
A. $9,90
B. $9.99
C. $0.10
D. $9990
E. $10

Lee is considering whether to download music illegally from the internet. Suppose he places a $10 value on the album he wants to download. Also suppose he has 1% chance of getting caught. If he gets caught, the quthorities take the music he downloaded away from him and give him a $1,000 fine.
What is lee's expected cost from downloading music?
A. 10
B. 100
C. 1000
D. 9.99
E. 990

Lee is considering whether to download music illegally from the internet. Suppose he places a $10 value on the album he wants to download. Also suppose he has 1% chance of getting caught. If he gets caught, the quthorities take the music he downloaded away from him and give him a $1,000 fine.
What will Lee do?
A. Do not download the music because the expected costs are greater than expected benefits
B. Donload the music because the expected benefits are greater than tthe expected costs
C. He is indifferent because the expected costs and the expected benefits are identical
D. Do not download the music because the expected benefits are greater than the expected costs
E. Dowload the music because the expected cost are greater the expected benefits

A football coach has a decision to make. His team has the ball on the opponent's 45 yard line and it is fourth down with one yard still needed for a first down. If he runs a play and ties to make the first down, his team has 65% chance of making the first down. Suppose a first down is worth 1,000 dollars to him. If the team fails to make a first down it gives the opponents a good field position which the coach will consider a 2,000 dollar cost.
What is the coach's expected benefit from going for the first down?
A. $45
B. $1300
C. $350
D. $1000
E. $650

A football coach has a decision to make. His team has the ball on the opponent's 45 yard line and it is fourth down with one yard still needed for a first down. If he runs a play and ties to make the first down, his team has 65% chance of making the first down. Suppose a first down is worth 1,000 dollars to him. If the team fails to make a first down it gives the opponents a good field position which the coach will consider a 2,000 dollar cost.
What should the coach do?
A. Indifferent
B. Go for the first down because the expected costs are greater than the expected benefits
C. Not go for the first down because the expected costs are greater than the expected benefits
D. Not go for the first down because the expected benefits are greater than the expected costs
E. Go for the first down because the expected benefits are greater than the expected costs

Gravity is to physics as
A. Technology is to Economics
B. Land is to Economics
C. Incentives are to Economics
D. Money is to Economics

If we apply the lesson of the broken window to the cash for clunkers program, which statement is true and most relevant?
A. the program decreased US wealth
B. the program increased Us trade
C. the program increased US wealth
D. the program decreased US trade