SOLVED

1.4Â Â Integrative Questions 1) Suppose you decide to attend summer school and that this is considered a rational choice. When making this choice, A) you must ignore the problem of scarcity. B) you considered the marginal cost and marginal benefit of your choice. C) you have used the ceteris paribus assumption. D) you have made a positive statement. E) you must have considered the social interest. 2) John decides to leave college early and play professional sports. Which of the following economic principles does John use? A) i and ii B) i, ii and iii C) ii only D) i and iii E) ii and iii 3) Which of the following is true? i)A rational choice is always made in the pursuit of social interest. ii)Economics is a social science. iii)Economists try to understand how the economic world works by testing positive statements. A) ii and iii B) Only i C) Only ii D) Only iii E) i and ii 4) Which of the following is true? i)A rational choice is made on the margin. ii)Microeconomics is the study of the national economy while macroeconomics is the study of the global economy. iii)Economists try to understand how the economic world works by testing normative statements. A) Only i B) i and iii C) Only ii D) Only iii E) i and ii 5) Will, Bill, and Phil decide to study an extra hour for an exam. Instead of studying, they could have gone out to eat, played football, or watched TV. Which of the following statements is correct? A) The benefit the three students receive must be the same because they all make the same choice. B) The students made a rational choice as long as they face no scarcity. C) The students could each have different opportunity costs. D) The marginal cost of the decision is the same if they make the same score on the exam. E) Going out to eat, playing football, and watching TV are all called sunk costs. 6) Which of the following is true regarding a normative statement? i)It uses the ceteris paribus assumption. ii)It is a value judgment. iii)It accounts for opportunity costs. A) i and iii B) ii and iii C) i only D) ii only E) i, ii, and iii 7) To help unscramble cause and effect, economists A) use the concept of opportunity costs. B) must use the ceteris paribus assumption. C) answer the “what” question. D) answer the “how” question. E) must use normative statements. 8) Which of the following is true regarding this statement? “The president’s decision to spend more money on national defense is smart.” A) This is a normative statement. B) The federal government does not face scarcity. C) This topic would be studied in microeconomics. D) Social interest must always be more important than self-interest. E) Ceteris paribus does not apply to the government.