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Exam 1: Five Foundations of Economics

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Question 61

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A mother takes her daughter on an outing and promises her ice cream if she behaves.In addition,she warns her that if she misbehaves,she won't be allowed to play with her toys at home.The latter is an example of a(n) ________ incentive and reinforces the efficacy of the ice cream,a(n) ________ incentive.

A) direct; indirect
B) indirect; direct
C) negative; positive
D) positive; negative
E) negative; direct

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Question 62

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Clarice must choose between reading the next chapter in her economics textbook or streaming the next episode of her favorite show.In her experience,she does well on exams,but even better when she reads the textbook.If she chooses to watch the show,what can be said of incentives?

A) Adding a negative incentive (e.g. ,her parents block access to streaming services) would more likely result in Clarice choosing to read the textbook.
B) Positive incentives are always more effective than negative incentives.
C) Negative incentives are always more effective than positive incentives.
D) Only marginal incentives play a role in this example.
E) Clarice is motivated by the stronger of two negative incentives.

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Question 63

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Macroeconomics would be concerned with

Thomas Malthus's prediction of mass starvation failed to come true because of increases in

What is the opportunity cost of purchasing a college textbook?

Many stores are open 24 hours a day.When store managers make the decision to stay open 24 hours,it must be the case that

Macroeconomics is the study of

What is the indirect incentive in the unemployment insurance program?

Nicole asked her neighbor to rake the leaves on his lawn because they were blowing into her yard.It takes an hour to rake the yard,regardless of who performs the task.He responded that it wouldn't be rational for him to do so,but he would be willing to hire someone else to rake.Why would this be the case?

The basic goal of economics is to

One way to promote a new business is to offer free items.If Jayleen were to open a restaurant and offer free food,she likely would have a line out the door.How would an economist understand the behavior of those standing in line?

A parent that pays a child an allowance for doing chores is providing a(n) ________ incentive.

Instead of taking an economics course,Adam could have taken a history course that meets at the exact same time.The total cost of taking the economics course would be

Rodrigo operates a dry-cleaning service and charges customers $5 per article of clothing.Based on his knowledge of operations,the 1,000 th piece of clothing costs him $4.95 to dry-clean.If he takes additional business,however,the 1,001st piece will cost $5 for the service.Does he take the additional business?

In economics,choices are necessary because of the presence of

Which of the following is an example of an unintended consequence?

During a job search,individuals will sometimes accept the lower of two competing salary offers.What would best explain this decision?

If Alexander doesn't like changing the oil in his car and pays his father to do it for him,he has provided his father with a(n) ________ incentive.

People often clean cabinet doors,but do not regularly clean inside the cabinet.The insides of cabinets aren't visible and require the removal of contents in order to clean.This is an example of ________ thinking.

Disparities in opportunity cost among competitors are the cause of