Economic decision makers will continue to acquire information only as long as the expected additional benefit exceeds the expected additional cost of the information.
a. True
b. False
QUESTION 2Most real economic choices involve small (or marginal) changes, rather than all-or-nothing decisions.
a. True
b. False
QUESTION 3A rational decision maker compares the expected marginal cost to the expected marginal benefit of any activity.
a. True
b. False
QUESTION 4A marginal adjustment only refers to a minor change.
a. True
b. False
QUESTION 5In economics, the term marginal usually refers to
a. a small change in an economic variable
b. a low-quality product or resource
c. an unimportant and irrelevant economic variable
d. an all-or-nothing economic decision
e. a footnote or minor point
QUESTION 6Economic information
a. is usually scarce and costly to acquire
b. is usually available free to any decision maker
c. is usually not required for rational decision making
d. must be complete before any decision is made
e. is usually useful only to governments
QUESTION 7Rational economic decision makers will make a change only if
a. the change is free of risk
b. there are no costs involved
c. their expectations are correct
d. there is no uncertainty about the results of the change
e. the expected marginal benefit exceeds expected marginal cost
QUESTION 8Economists generally believe that
a. buyers and sellers have all the information they can use
b. additional information is costly to acquire
c. decision makers have complete knowledge of all the alternatives available
d. economic decisions result from random behavior
e. decision makers never make mistakes
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