5. Explain why a rational economic decision-maker will stop binge-viewing and instead watch

one program at a time. Why or why not do you think you will be able to follow this rule?

6. What does Nobel-Prize winning economist Paul Krugman say is ". . .the single central

insight in economics?" Explain how this was true for the last thing you purchased from a

store.

7. What is the economic explanation for why the coffee shop at JCCC sells the first cup of

coffee for $2, but only charges $1 for the second cup of coffee?

10. Explain the economic reason why most people chose to not get married at age 16, but instead to get married later in life. This is a good example of a question you need to refer to your textbook authors' reasoning, and not just give me some type of common-sense answer.

11. What is the economic reason why there are fewer stay-at-home moms? Again, refer to your textbook authors' reasoning (although you are also free to disagree with them) and not just your common sense.

12. Explain why using the cost-benefit principle to make decisions does not necessarily mean

you are making selfish decisions.

Multichoice questions

____ 3. A phrase commonly used to describe the truth that people face trade-offs is

a.All that glitters is not gold.

c.There's no such thing as a free lunch.

b.A penny saved is a penny earned.

d. The love of money is the root of all

evil.

____ 4. The total benefits minus total costs that result from a choice you make are known as

a.opportunity benefit.

c.marginal cost.

b.marginal benefit.

d.economic surplus.

____ 5. If you are thinking about ordering take-out Thai food from the best Thai restaurant in Kansas City, which is Lemongrass in Old Overland Park. If the marginal benefit of the take-out is greater than

the marginal cost, then

a.you should order the Thai food.

c .you will be indifferent to either ordering or not ordering the Thai food.

b. you should not order the Thai food.

d. you must have more information about the total cost and benefit of the Thai food to rationally answer this question.

____ 6. The more you consume of anything, the less additional satisfaction it eventually provides. This

concept is known as

a.he Free Lunch Principle.

c.The Law of Diminishing Returns.

b.opportunity cost.

d.The Principle of Efficiency.

____ 7. Sometimes instead of just considering costs and benefits, people let their decisions be affected by how the choices are described. This phenomenon is known as

a.the free lunch fallacy.

b.the opportunity cost principle.

c.the sunk cost fallacy.

d.the framing effect.