A farmer is deciding whether or not to add fertilizer to his or her crops. If the farmer adds 1 ...

A farmer is deciding whether or not to add fertilizer to his or her crops. If the farmer adds 1 pound of fertilizer per acre, the value of the resulting crops rises from 80 to 100 per acre. According to marginal analysis, the farmer should add fertilizer if it costs less than:
 a. 12.50 per pound. b. 20 per pound.
  c. 80 per pound. d. 100 per pound.

QUESTION 2

The amount of a good that is given up to produce another good is:
 a. its dollar cost.
  b. its opportunity cost.
  c. its relative cost.
  d. its absolute cost.
  e. all of these.

QUESTION 3

The law of increasing costs indicates that the opportunity cost of producing a good:
 a. is proportional to the production of the good.
  b. is constant to the production of the good.
  c. increases as more of the good is produced.
  d. decreases as more of the good is produced.
  e. increases as less of the good is produced.

QUESTION 4

The opportunity cost of your college education is:
 a. c and d.
  b. d and e.
  c. the actual dollar cost of your college education.
  d. your best alternative use of the money you spend for a college education.
  e. money you could have earned working instead of going to college.

QUESTION 5

When the opportunity cost of producing carrots increases as more carrots are produced, then:
 a. no more carrots will be produced.
  b. resources are equally suited to the production of carrots and to other goods.
  c. the production possibilities curve is a straight line.
  d. the production possibilities curve becomes positively sloped.
  e. the law of increasing costs is present.

QUESTION 6

Mikki decides to work five hours the night before her economics exam. She earns an extra 75, but her exam score is 10 points lower than it would have been had she stayed home and studied. Her opportunity cost is the:
 a. five hours she worked.
  b. 75 she earned.
  c. 10 points she lost on her exam.
  d. time she could have spent watching television.
  e. guilt she feels about neglecting her economics studies.

QUESTION 7

In the context of the production possibilities curve, opportunity cost is measured in:
 a. dollars paid for the goods.
  b. the quantity of other goods given up.
  c. the value of the resources used.
  d. changing technology.
  e. units of satisfaction.