Question : 11) An individual has 8 hours to spare. He has : 1377282

11) An individual has 8 hours to spare. He has to divide his time between two activities: reading and writing. Which of the following allocations will exactly satisfy the individual’s budget constraint?

A) 3 hours of reading and 4 hours of writing

B) 4 hours of reading and 6 hours of writing

C) 2 hours of reading and 2 hours of writing

D) 5 hours of reading and 3 hours of writing

12) A consumer has $50 to spend. He has to decide between buying two goods: magazines priced at $5 each and DVDs priced at $10 each. Which of the following combinations of the two goods will exactly satisfy his budget constraint?

A) 3 magazines and 4 DVDs

B) 2 magazines and 4 DVDs

C) 6 magazines and 1 DVD

D) 2 magazines and 2 DVDs

13) Which of the following statements is true?

A) All rational economic agents attempt to maximize their income.

B) A rational consumer makes his decisions depending on what the majority chooses.

C) A budget constraint is an economic tool that quantifies the trade-off between consumption of two goods.

D) A trade-off refers to the exchange of goods between economic agents through a barter system or mutual exchange.

14) The best alternative use of a resource is referred to as its:

A) sunk cost.

B) market price.

C) marginal utility.

D) opportunity cost.

15) A student has two options: she can either surf the web, or work part-time. Working part-time pays her $20 per hour. What is the student’s opportunity cost of surfing the web for 5 hours?

A) $4

B) $20

C) $50

D) $100

16) John has to choose between two jobs: one that offers him $50 per hour and one that offers him $35 per hour. The opportunity cost of choosing the job that offers him $50 per hour is:

A) $1.5 per hour.

B) $15 per hour.

C) $35 per hour.

D) $85 per hour.

17) ________ is a calculation that adds up costs and benefits using a common unit of measurement, like dollar values.

A) Cost-benefit analysis

B) Revenue-income analysis

C) Budget constraint analysis

D) Expenditure-income analysis

18) Cost-benefit analysis requires:

A) choosing the alternative with the least net benefit.

B) all costs and benefits to be measured in the same unit.

C) evaluating the budget constraint before making a choice.

D) that the risks associated with different alternatives is ignored.

19) Suppose that Jinelle, an engineer, has to choose between two jobs. Which of the following statements is true?

A) When deciding between both jobs, she should consider both wage and non-wage attributes of each job.

B) While deciding between jobs, she should focus only on the costs of each job and ignore the benefits.

C) While deciding between jobs, she should only focus on the benefits from each job and ignore the costs.

D) While deciding between jobs, she should consider the wage attributes and ignore the non-wage attributes of each job.

20) The net benefit of a particular alternative equals:

A) the benefits received from the alternative plus the costs incurred in choosing the alternative.

B) the benefits received from the alternative divided by the costs incurred in choosing the alternative.

C) the costs incurred in choosing the alternative divided by the benefits received from the alternative.

D) the benefits received from the alternative minus the costs incurred in choosing the alternative.