Suppose that you have received $300 as a birthday gift. You can spend it today or you can put the money in a bank for a year and earn 5 percent interest

Suppose that you have received $300 as a birthday gift. You can spend it today or you can put the money in a bank for a year and earn 5 percent interest. The opportunity cost of spending the money today is
$315

A marginal change is a
small, incremental change 

A construction company has built 50 houses so far this year at a total cost to the company of $8 million. If the company builds a 51st house, its total cost will increase to $8.18 million. Which of the following statements is correct?
all of the above 

A rational decision maker takes an action only if the
marginal benefit is greater than the marginal cost 

After much consideration, you have chosen Ireland over Spain for your Study Abroad program next year. However, the deadline for your final decision is still months away and you may reverse this decision. Which of the following events would prompt you to reverse this decision?
the marginal benefit of going to Spain increases 

According to Adam Smith, the success of decentralized market economies is primarily due to
Individuals' pursuit of self-interest 

The term "market failure" refers to
a situation in which the market on its own fails to allocate resources efficiently 

Market failure can be cause by
externalities and market power 

The fact that different countries experience different standards of living is largely explained by differences in those countries'
productivity levels 

To raise productivity, policymakers could
all of the above 

Large or persistent inflation is almost always caused by
government printing too much money 

The business cycle is the
irregular fluctuations in economic activity

Which of the following statements about economic models is correct?
models assume away irrelevant details

Economists make assumptions
to make the world easier to understand

Just like models constructed in other areas of science, economic models incorporate assumption that may contradict reality 

The circular-flow diagram is a
visual model of how the economy is organized 

In a circular flow diagram, if Michelle is a worker who delivers flowers, she participates
in the market for factors of production exchanging labor for income 

Production possibilities frontiers are usually bowed outward. This is because recourses are specialized; that is some are better at producing particular good rather than other goods 

The two loops in the circular-flow diagram represent the flow of
inputs and outputs and the flow of dollars 

The production possibilities frontier is a
graph that shows the various combinations of output the economy can possibly produce given the available resources and technology