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The cost benefit principle indicates that an action should be taken
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if extra benefit is greater than or equal to the extra costs
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The scarcity principle indicates that
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choices must be made
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The cost-benefit principle indicates
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how to make the choices
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Ginger bought an MP3 player that came with a $10 rebate. Ginger should fill out the rebate form if
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the opportunity cost of the time and trouble of sending in the rebate form is less than $10
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Suppose a retail store was offering 10% off all prices on all goods. The incentive to take advantage of the 10% savings is
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Directly related to the list price of the good
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Relative to a person who earns minimum wage, a person who earns $30 per hour has
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a higher opportunity cost of taking a day off
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Pat earns $25,000 per year (after taxes), and Pat's spouse, Chris, earns $35,000 (after taxes). They have two preschool children. Childcare for their children costs $12,000 per year. Pat has decided to stay home and take care of the children. Pat must
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Value spending time with the children by more than $13,000
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Last summer real estate prices in your town soared. You started noticing more For Sale signs in your neighbors' yards. You conclude that
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When housing prices rose, they started to exceed some of your neighbors' reservation prices.
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The buyer's reservation price of a particular good or service is the
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The maximum amount one would be willing to pay for it.
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What might cause a demand function to shift to the right
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An increase in the price of a substitute
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Which of the following is NOT a characteristic of a market in equilibrium?
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All consumers are able to purchase as much as they wish
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Whenever the quantity demanded is not equal to the quantity supplied, the quantity that is actually sold in the market
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The smaller of the quantity demanded and the quantity supplied
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In a market where government has set the price below equilibrium price, one might expect
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A black or secondary market to develop as individuals try to take advantage of unexploited opportunities
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Suppose you bought a concert ticket from Ticketmaster for $50, but when you got to the concert scalpers where selling tickets in the same seating area s yours for $25. What is probably true?
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There is an excess supply of tickets for this concert at the Ticketmaster price
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Suppose you notice that more and more people are driving gas-guzzling cars. Since you drive an economy car, their increased demand for gas:
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Causes the price you pay for gas to increase
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You have noticed that there is a persistent shortage of teachers in an inner-city school district in your state. Based on this observation, you suspect that
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The wage for teachers at those schools is lower than the equilibrium wage
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If the price of computer increases and the demand for monitors decreases, then
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Computer and monitors are complements
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Which of the following would cause an increase in quantity supplied of wheat?
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The price farmers receive for their wheat rises
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One observes that the equilibrium price of apples falls and the equilibrium quantity increases. Which of the following best fits the observed data?
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Demand constant and an increase in supply
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Assume the demand for coffee increases while the supply decreases. Which of the following outcomes is certain to occur?
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The equilibrium price of coffee will rise
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The number of US households with access to the internet and those with broadband connections is growing rapidly. As an economic naturalist, one could predict that when a major purchase is being considered, families will
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Collect more information before making the purchase because the cost of finding and acquiring it is lower
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