Quiz 1 of 6 MyEconLab PDF

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Quiz 1 of 6 Q1 a)

Q1 b) What is the opportunity cost of distributing the tickets this way? A. The cost of people blocking traffic in and around the Town Hall B. The activities that cannot be done (such as earning money at work) when one is standing in line C. The cost of travel to the Town Hall D. All of the above E. A and B only

Q1 c) Productive efficiency occurs when a good or service (such as the distribution of tickets) is produced at the lowest possible cost. Is this an efficient way to distribute the tickets? Yes If possible, think of a more efficient method of distributing the tickets. A. Choosing the 100 poorest people in the town and forcing them to pay twice the market value for the tickets would be a more efficient method of distributing the tickets. B. Staging a mandatory, town-wide athletics competition, lasting for two weeks, where the winner wins all the tickets would be a more efficient method of distributing the tickets. C. Holding an auction for the tickets, where people could make bids online, would be a more efficient method of distributing the tickets. D. There is no method of distributing the tickets more efficiently than giving them away at the Town Hall on a Monday morning.

Q1 d) Is this an equitable way to distribute the tickets? Explain. Giving away the tickets at the Town Hall on Monday morning is A. equitable because most people will have the opportunity to acquire a ticket. B. not equitable because the marginal cost of distributing the tickets will not be equal to the marginal benefit. C. equitable because the marginal cost of distributing the tickets will be equal to the marginal benefit. D. not equitable because only those with high incomes will have the opportunity to acquire a ticket.

Q2 In interviews with Australian university economics graduates they spoke of how the study of economics provided a solid grounding which was helpful in their subsequent careers, which included

working in government departments, private banks and other financial institutions. The students commented that studying economics enabled them to:   

think logically and critically develop a way of problem solving that they could apply to most decision making consider appropriate policy solutions and their consequences.

Why might studying economics be particularly good preparation for being a top manager of a corporation, running your own business, working in international public organisations or having a leading role in government? A. Economics is just as valuable to a cashier as it is for a CEO. B. Economics teaches us how to look at the trade-offs involved in every decision. C. Management and politics have more to do with public relations than economics. D. Economics is less of an issue as you climb the corporate ladder because you usually hire accountants to handle your money.

Q3 What type of economic analysis is concerned with the way things ought to be? A. Positive analysis B. Normative analysis C. Negative analysis D. Marginal analysis

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Q7 What is the difference between productive, allocative and dynamic efficiency? a) Productive efficiency means that A. new technologies and innovation are adopted over time. B. every product is produced up to the point where marginal benefit is equal to marginal cost. C. a product is produced at the lowest possible cost. D. every product is distributed fairly.

b) Allocative efficiency means that A. new technologies and innovation are adopted over time. B. every product is distributed fairly. C. every product is produced up to the point where marginal benefit is equal to marginal cost. D. a product is produced at the lowest possible cost.

c) Dynamic efficiency means that

A. new technologies and innovation are adopted over time. B. every product is distributed fairly. C. every product is produced up to the point where marginal benefit is equal to marginal cost. D. a product is produced at the lowest possible cost.

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