18) A rational decision maker __________.
A. ignores the likely effects of government policies when he or she makes choices
B. ignores marginal changes and focuses instead on “the big picture”
C. takes an action only if the marginal benefit of that action exceeds the marginal cost of that action
D. takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action and previous actions
19) Lucy starts her own psychiatric practice, but her expenditures to open the practice exceed her income. Lucy is a __________.
A. saver who supplies money to the financial system
B. saver who demands money from the financial system
C. borrower who demands money from the financial system
D. borrower who supplies money to the financial system
20) Resources are __________.
A. plentiful for households but scarce for economies
B. scarce for households but plentiful for economies
C. scarce for households and scarce for economies
D. plentiful for households and plentiful for economies
21) What you give up to obtain an item is called your __________.
A. explicit cost
B. opportunity cost
C. true cost
D. direct cost
If you post your answers, we'll be glad to check them.
20)b and 21)is b , 18 I think is D and 19 C? but not sure
I agree with your answers.
20. c
18) The correct answer is C. A rational decision maker takes an action only if the marginal benefit of that action exceeds the marginal cost of that action. This means that they consider the additional benefits and costs of their choices and make decisions based on whether the benefits outweigh the costs.
To arrive at this answer, we can eliminate options A and B because they both suggest that a rational decision maker ignores certain factors. In contrast, a rational decision maker considers all relevant factors. Between options C and D, we can eliminate D because it suggests that the decision maker considers the combined benefits and costs of both the current action and previous actions. However, a rational decision maker only considers the marginal benefits and costs of the current action to make their decision.
19) The correct answer is C. Lucy is a borrower who demands money from the financial system. Since her expenditures exceed her income, she needs to borrow money to cover the shortfall. By demanding money from the financial system, Lucy is seeking a loan to finance her psychiatric practice.
To determine the answer, we can eliminate options A and D because they both suggest that Lucy supplies money to the financial system. Since Lucy needs to borrow money, she is not supplying it. Option B suggests that she is a saver, which is also not the case. Therefore, option C is the correct answer.
20) The correct answer is B. Resources are scarce for households but plentiful for economies. In the context of economics, resources refer to the factors of production, such as land, labor, and capital. These resources are limited in supply, which makes them scarce for individuals or households.
To determine the answer, we can eliminate options A and D because they suggest that resources are plentiful for either households or economies. In reality, resources are limited and not abundantly available to everyone. Option C suggests that resources are scarce for both households and economies, which is the correct understanding of scarcity.
21) The correct answer is B. What you give up to obtain an item is called your opportunity cost. Opportunity cost refers to the value of the next best alternative foregone. In other words, it is the cost of the next best alternative that you could have chosen but didn't.
To find the answer, we can eliminate options A, C, and D. Explicit cost refers to the direct monetary cost of obtaining an item, not the opportunity cost. True cost is not a commonly used term in economics, so it can be eliminated as well. Option B, opportunity cost, accurately describes the concept of what you give up to obtain an item.
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