You currently subscribe to two magazines and are trying to decide whether you should subscribe to a ...

You currently subscribe to two magazines and are trying to decide whether you should subscribe to a third. What should determine your decision, if you are rational?
 a. the total cost of the magazines compared to the total satisfaction you would receive
  b. the total amount of satisfaction you would get from the magazines
  c. the enjoyment you would get from the third magazine
  d. the cost of the third magazine, including the time it takes to read it
  e. the cost of the third magazine compared to the additional enjoyment you would get from it

QUESTION 2

A rational decision maker will take only those actions for which the expected marginal benefit
 a. is positive
  b. is at its maximum level
  c. is greater than or equal to the expected marginal cost
  d. is less than the expected marginal cost
  e. exactly equals the expected marginal cost

QUESTION 3

To say that people make marginal decisions means that
 a. they usually wait until the last minute before making a decision to buy
  b. they weigh the additional costs and additional benefits of various activities before they make a decision
  c. most people just barely get by on the incomes they earn and live from day to day on the very edge of subsistence
  d. given a choice, most people would prefer to make their own decisions concerning the things that affect their lives
  e. they consider the total cost and benefit of various activities before they make a purchase

QUESTION 4

In economics, marginal means
 a. incremental or decremental
  b. unimportant
  c. level or size
  d. a border-line situation
  e. a bad alternative

QUESTION 5

When economists say that people act as rational decision makers, that means
 a. they gather all relevant information before making their purchases
  b. once a pattern of behavior has been established, people tend to become set in their ways
  c. people respond in predictable ways to changes in costs and benefits
  d. people rarely make errors when they are permitted to make transactions
  e. once made, decisions are never reversed

QUESTION 6

Economists believe that people respond in a predictable way to changes in costs and benefits. The term that best describes this phenomenon is
 a. opportunity cost
  b. scarcity
  c. innovation
  d. marginal analysis
  e. other things equal (or ceteris paribus)

QUESTION 7

When economic choice involves an adjustment to an existing situation, marginal analysis
 a. has no practical applications or real-world uses
  b. eliminates incorrect decisions and bad choices
  c. involves comparing the additional costs and additional benefits of an activity before deciding
  d. involves examining only the total costs and total benefits of an activity before deciding
  e. none of the above