CLEP Microeconomics chapter practice4 questions

03 Scarcity, Opportunity Cost, and Marginal Choice

These questions come directly from the chapter practice in the book. Choose the best answer, check your reasoning, and use the explanation to correct any gap.

Question 1

Question 1 of 4

Lena can use Saturday morning to earn 70, attend a free review session she values at 45, or help a friend move, which she values at $30. If she attends the review session, what is her opportunity cost?

Opportunity cost is the value of the best forgone alternative. Earning $70 is the most valuable option Lena gives up.
Show answer and explanation

D. $70

Opportunity cost is the value of the best forgone alternative. Earning $70 is the most valuable option Lena gives up.

Question 2

Question 2 of 4

A student paid a nonrefundable 25 registration fee for a workshop. On the day of the workshop, attending would provide a benefit worth 18 but require $10 of travel cost. The student should

The registration fee is sunk. Attending now yields an 18 benefit for a 10 additional cost, so attendance adds $8 of net benefit.
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B. attend because the remaining benefit exceeds the remaining cost

The registration fee is sunk. Attending now yields an 18 benefit for a 10 additional cost, so attendance adds $8 of net benefit.

Question 3

Question 3 of 4

The marginal benefit from successive units of pollution cleanup is 90, 65, 40, and 20. The marginal cost of those units is 25, 35, 45, and 60. How many units maximize net benefit?

The first two cleanup units have marginal benefit at least as large as marginal cost. The third unit costs 45 but adds only 40 of benefit.
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C. Two

The first two cleanup units have marginal benefit at least as large as marginal cost. The third unit costs 45 but adds only 40 of benefit.

Question 4

Question 4 of 4

Which claim contains a value judgment that evidence alone cannot settle?

The word “should” expresses a value judgment about the preferred policy. The other statements make testable claims about behavior or outcomes.
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A. The city should expand the housing subsidy because shelter is a basic need.

The word “should” expresses a value judgment about the preferred policy. The other statements make testable claims about behavior or outcomes.

Quiz complete