While waiting in line to buy one cheeseburger for 1.50 and a medium drink for 1.00, Sally notices that she could get a value meal that contains both the cheeseburger and medium drink and also a medium order of fries for 2.75 . She thinks to herself, Is it worth the extra 25 cents to get the medium fries? To an economist, Sally's decision is an example of:
a. marginal analysis.
b. basing decisions on total, rather than marginal, value.
c. an unintended consequence.
d. the fallacy of composition.
QUESTION 2While waiting in line to buy a cheeseburger for 2 and a drink for 75 cents, Aaron notices that the restaurant has a value meal containing a cheeseburger, drink, and French fries for 3 . For Aaron, the marginal cost of purchasing the French fries:
a. would be zero.
b. would be 25 cents.
c. would be 50 cents.
d. cannot be determined because the information about the price of the French fries is not provided.
QUESTION 3While waiting in line to buy two tacos at 80 cents each and a medium drink for 90 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for 3 . For Jordan, the marginal cost of the third taco would be:
a. zero. b. 50 cents.
c. 80 cents. d. 1.
QUESTION 4When deciding whether to buy a second car, marginal analysis indicates that the purchaser should compare the:
a. benefits expected from two cars with the cost of both.
b. additional benefits expected from a second car with the cost of the two cars.
c. dollar cost of the two cars with the potential income that the cars will generate.
d. additional benefits of the second car with the additional cost of the second car.
QUESTION 5In economics, the term marginal refers to:
a. the change or difference from a current situation.
b. man-made resources as opposed to natural resources.
c. the satisfaction a consumer receives from a good.
d. holding everything else constant in the analysis.
QUESTION 6Which word best completes the following sentence? A rational decision maker always chooses the option for which marginal benefit is __________ marginal cost.
a. less than
b. equal to
c. unrelated to
d. more than
Quick Reply
