【正文】 equal slices,a. it is easier to cut the pie, and therefore the economy can produce a larger pie.b. the government can more easily allocate the pie to those most in need.c. the pie gets smaller, and there will be less pie overall.d. government will spend too much time cutting and it causes the economy to lose the ability to produce enough pie for everyone.ANS: C DIF: 3 REF: 11 TOP: Government, Efficiency, Equity MSC: Analytical 34. When the government attempts to improve equity in an economy the result is oftena. an increase in overall output in the economy.b. additional government revenue since overall ine will increase.c. a reduction in equity.d. a reduction in efficiency.ANS: D DIF: 2 REF: 11 TOP: Government, Efficiency, Equity MSC: Interpretive 35. When the government redistributes ine from the wealthy to the poor,a. efficiency is improved, but equity is not.b. both wealthy people and poor people benefit directly.c. people work less and produce fewer goods and services.d. wealthy people consume fewer goods, but poor people consume more goods, resulting in no real change.ANS: C DIF: 2 REF: 11 TOP: Government, Efficiency, Equity MSC: Interpretive 36. In economics, the cost of something isa. the dollar amount of obtaining it.b. always measured in units of time given up to get it.c. what you give up to get it.d. often impossible to quantify, even in principle.ANS: C DIF: 1 REF: 11TOP: Opportunity cost MSC: Definitional 37. What you give up to obtain an item is called youra. opportunity cost.b. explicit cost.c. true cost.d. direct cost.ANS: A DIF: 1 REF: 11TOP: Opportunity cost MSC: Definitional 38. The opportunity cost of going to college isa. the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses.b. the value of the best opportunity a student gives up to attend college.c. zero for students who are fortunate enough to have all of their college expenses paid by someone else.d. zero, since a college education will allow a student to earn a larger ine after graduation.ANS: B DIF: 2 REF: 11TOP: Opportunity cost MSC: Interpretive 39. Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision isa. the value to Maurice of the option he would have chosen had Option B not been available.b. the value to Maurice of Options A, C and D bined.c. $100.d. $300.ANS: A DIF: 2 REF: 11TOP: Opportunity cost MSC: Applicative 40. A furniture maker currently produces 100 tables per week and sells them for a profit. She is considering expanding her operation in order to make more tables. Should she expand?a. Yes, because making tables is profitable.b. No, because she may not be able to sell the additional tables.c. It depends on the marginal cost of producing more tables and the marginal revenue she will earn from selling more tables.d. It depends on the average cost of producing more tables and the average revenue she will earn from selling more tables.ANS: C DIF: 2 REF: 11TOP: Marginal changes MSC: Applicative 41. For most students, the largest single cost of a college education isa. the wages given up to attend school.b. tuition, fees, and books.c. room and board.d. transportation, parking, and entertainment.ANS: A DIF: 2 REF: 11TOP: Opportunity cost MSC: Interpretive 42. For a college student who wishes to calculate the true costs of going to college, the costs of room and board a. should be counted in full, regardless of the costs of eating and sleeping elsewhere.b. should be counted only to the extent that they are more expensive at college than elsewhere.c. usually exceed the opportunity cost of going to college.d. plus the cost of tuition, equals the opportunity cost of going to college.ANS: B DIF: 2 REF: 11TOP: Opportunity cost MSC: Applicative 43. For which of the following individuals would the opportunity cost of going to college be highest?a. a promising young mathematician who will mand a high salary once she earns her college degreeb. a student with average grades who has never held a jobc. a famous, highlypaid actor who wants to take time away from show business to finish college and earn a degreed. a student who is the best player on his college basketball team, but who lacks the skills necessary to play professional basketballANS: C DIF: 2 REF: 11TOP: Opportunity cost MSC: Applicative 44. When you calculate your true costs of going to college, what portion of your roomandboard expenses should be included?a. Your full roomandboard expenses should always be included.b. None of your roomandboard expenses should ever be included.c. You should include only the amount by which your roomandboard expenses exceed the ine you earn while attending college.d. You should include only the amount by which your roomandboard expenses exceed the expenses for rent and food if you were not in college.ANS: D DIF: 2 REF: 11TOP: Opportunity cost MSC: Applicative 45. The opportunity cost of an item isa. the number of hours needed to earn money to buy the item.b. what you give up to get that item.c. usually less than the dollar value of the item.d. the dollar value of the item.ANS: B DIF: 1 REF: 11TOP: Opportunity cost MSC: Definitional 46. Mallory decides to spend three hours working overtime rather than watching a video with her friends. She earns $8 an hour. Her opportunity cost of working isa. the $24 she earns working.b. the $24 minus the enjoyment she would have received from watching the video.c. the enjoyment she would have received had she watched the video.d. nothing, since she would have received less than $24 of enjoyment from the video.ANS: C DIF: 3 REF: 11