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1) Microeconomics analyzes: A

Economics

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1) Microeconomics analyzes:

A. The role of government in our economy and the political theories necessary for efficient government operation.

B. The entire economy, focusing on such concepts as income, unemployment, inflation and interest rates.

C. Choices that are made by individual consumers, firms and resource owners and the ways in which the price mechanism influences those decisions.

D. The statistical relationships between variables by collecting data and performing empirical analysis.

2. What is the economic cost of teaching a 1-hour class at a school if it costs you $5 in gas (round trip) and $2 in bridge tolls. Assume that you could have been earning $10 during this hour by working at McDonald's, or $8 an hour by working at Wendy's, or $6 an hour by working at Burger King.

A. $7

B. $17

C. $31

D. Not enough information to determine the economic cost.

3. Why is a firm's production possibilities frontier concave to the origin?

A. The law of demand.

B. The law of increasing opportunity cost.

C. The law of diminishing opportunity cost.

D. None of the above, the production possibilities frontier is convex to the origin.

4. Jim and Diana are a married couple. Jim can mow 10 units of lawn or wash 5 units of dishes in one hour. Diana can mow 18 units of lawn or wash 6 units of dishes in one hour. Which of the following is false?

A. Jim has the absolute disadvantage in both activities.

B. Jim has the comparative advantage in washing the dishes.

C. Diana has the absolute advantage in washing the dishes.

D. Diana has the comparative advantage in washing the dishes.