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| 1 | |
The principle without which economics would not exist is: |
| | A) | The incentive principle |
| | B) | The scarcity principle |
| | C) | The cost-benefit principle |
| | D) | The principle of comparative advantage |
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| 2 | |
Which of the following is a pitfall in reasoning? |
| | A) | Measuring costs and benefits in dollar amounts |
| | B) | Weighing costs and benefits at the margin |
| | C) | Ignoring implicit costs |
| | D) | All of the above |
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| 3 | |
The cost benefit principle states that: |
| | A) | People should take an action only if the total costs are at least as great as the total benefits |
| | B) | People should take an action only if the extra costs are at least as great as the extra benefits |
| | C) | People should take an action only if the total benefits are at least as great as the total costs |
| | D) | People should take an action only if the extra benefits are at least as great as the extra costs |
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| 4 | |
You are about to buy a mobile phone for AED 1,000 from a nearby shop in Sharjah. You find out, through a friend, that you can get the same mobile phone from Carrefour for AED 940. However, Carrefour is 30 minutes away and the taxi fare from Sharjah to Carrefour is AED 55. Following the cost and benefit principle, you should: |
| | A) | Buy the phone from the shop in Sharjah because economic surplus is AED -5 |
| | B) | Buy the phone from the shop in Sharjah because economic surplus is AED 5 |
| | C) | Buy the phone from Carrefour because economic surplus is AED 5 |
| | D) | Buy the phone from Carrefour because economic surplus is AED -5 |
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| 5 | |
Which of the following is included in the opportunity cost of going to college?
- Tuition
- Textbooks
- The student's time, which can be used to work instead
- Food expenses
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| | A) | 1 and 2 |
| | B) | 1, 2, and 3 |
| | C) | 3 only |
| | D) | All of the above |
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| 6 | |
Economic models help economists because: |
| | A) | They help capture the essential elements of a particular situation |
| | B) | They help complicate real life situations |
| | C) | They help economists analyze more than one problem at the same time |
| | D) | None of the above |
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| 7 | |
Which of the following is/are true? |
| | A) | All fixed costs are sunk costs |
| | B) | Sunk costs should be considered when making decisions |
| | C) | All sunk costs are fixed costs |
| | D) | Both b and c |
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| 8 | |
The following table represents the cost of preparing and selling lemonade:
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If each glass of lemonade can be sold at AED 5, how many glasses of lemonade should one produce and sell? |
| | A) | 1 |
| | B) | 2 |
| | C) | 3 |
| | D) | 4 |
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| 9 | |
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Following the above table, identify the equation it represents: |
| | A) | B = 25 + 0.7T |
| | B) | B = 1.5T |
| | C) | B = 35 + 0.7T |
| | D) | B = 25 + 0.4T |
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| 10 | |
For an upward sloping curve, a reduction in the slope results in |
| | A) | Shifting the curve up |
| | B) | Shifting the curve down |
| | C) | Making the curve steeper |
| | D) | Making the curve flatter |
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