Mark and Charles are roommates at college. Each has written a 25-page term paper for the same English class. They are equally poor typists. Charles types his own paper and gets paid by Mark to type his, too. On the basis of the information given, which one of the following must be true?
a. Mark is wealthier than Charles.
b. Mark needs more time to study than Charles.
c. Charles hates typing.
d. Mark and Charles have different utilities for typing but place the same value on time.
e. Mark's opportunity cost of typing is higher than Charles's.
QUESTION 2Roxanne and Eileen live in an apartment building with a laundry room in the basement. Roxanne does her laundry at home, spending 4 and 5 hours per week. Eileen sends her laundry out, spending 20 and 15 minutes per week transporting the laundry. On the basis of the information given, which one of the following must be true?
a. Roxanne earns more labor income than Eileen.
b. Eileen earns more total income than Roxanne.
c. Roxanne enjoys doing laundry; Eileen does not.
d. Eileen has less laundry than Roxanne.
e. Eileen and Roxanne attach different utilities to time spent doing laundry.
QUESTION 3Economists generally assume that
a. firms act to maximize the dividends paid to stockholders
b. households act to maximize their wealth
c. households act to maximize utility
d. firms act to maximize revenue
e. both households and firms act to minimize expenditures
QUESTION 4The objective of the household is to
a. maximize household wealth
b. own as much land as possible
c. save as much money as possible
d. acquire as many goods as possible
e. maximize utility
QUESTION 5The statement Households maximize utility means that households
a. try to be as useful as possible to the economy
b. are only interested in maximizing their earnings
c. are assumed to buy useful things before they buy luxuries
d. are only interested in acquiring material wealth
e. are assumed to do what they think will increase their satisfaction
QUESTION 6The term utility means
a. satisfaction
b. a low-valued good
c. productivity
d. adaptability
e. efficiency
QUESTION 7Harold, a delivery man, washes and irons his own shirts. Sarah, his boss, sends her clothes to a laundry. Which is the most plausible economic explanation for this difference?
a. Harold must enjoy ironing more than Sarah does.
b. Harold must be better at ironing than Sarah is.
c. The opportunity cost of ironing is greater for Harold.
d. Harold probably has an absolute advantage in ironing.
e. Sarah has a higher opportunity cost of laundering her clothes than Harold does.
QUESTION 8The increased labor force participation of married women in the United States is most often explained by
a. declining productivity in agricultural production
b. a rise in average household size
c. increased education and an increased demand for labor
d. the decreased opportunity cost of working in the home
e. declining productivity in household production
QUESTION 9If the real wage decreases, the opportunity cost of working in the home will
a. increase
b. decrease
c. not be affected
d. increase as long as worker productivity also rises
e. increase only if households want to maintain their standard of living
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