Chapter 1: Thinking like an Economist Part 1: MCQ 1. Salem knows that Sbaraf DG
ID: 1134535 • Letter: C
Question
Chapter 1: Thinking like an Economist Part 1: MCQ 1. Salem knows that Sbaraf DG is offering 100 dbs on all products in the store. Salem thin that if he wants to buy something with a price of 200 dbs, then it is a good offer, but if he wants to buy something with a price of 3000 dbs, then it is not a good offer. This is an example of a. inconsistent thinking; saving 100 dbs is saving 100 dbs. b. the proper application of the Cost-Benefit Principle. c, rational choice because saving 40% is better than saving 4%. d. inconsistent reasoning because prices are sunk costs. 2. Abdallah can either drive to work, which takes half an hour and uses 10 dbs worth of pet or take the Metro, which takes an hour and costs 5 dbs. What is the rational thing for Abdallah to do, drive to work or take the Metro? a. He should take the bus because it costs 5 dhs less than driving. b. He should drive because it saves half an hour relative to taking the bus. c. He should drive if saving half an hour is worth 5 dhs or more. d. He should take the bus if saving half an hour is worth 5 dhs or more. 3. Economics is best defined as the study of: a. b. c. inflation, interest rates and the stock market. supply and demand. how people make choices in the face of scarcity and the implications of those choices for society as a whole. the financial concerns of businesses and individuals. d.Explanation / Answer
Answer:
1. The question 1 indicates the cost-benefit analysis by an individual to achieve its maximum satisfaction. The right answer to question 1 is part (b).
2. The answer to question 2 is (c) as driving to work will save his half an hour which will make him earn 5dbs and more. Hence self-driving will be a rational choice.
3. Economics is a study of how to optimally allocate limited resources to all for achieving social welfare. So the right answer to the question number 3 is part (c).
4. As people will have limited resources they will have to choose between the commodities as will provide them with the same utility. Hence the right option for question number 4 is (b).
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