SOPHIA Microeconomics

Sophia Learning - Microeconomics - Unit 1, Challenge 1

What is Economics?

Which of the following statements describes

macroeconomics?

c.)

It looks at the overall ups and downs of the

economy.

d.)

individuals and firms

Macroeconomics studies the behavior of

__________.

d.)

an economy in its entirety

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Decision Making

Relationships:

Rational

Consumer

Which of the following best describes a rational

consumer?

d.)

Wants to make choices that maximize utility

Microeconomics focuses mainly on the study of

decisions made

by __________.

Which of the following is a characteristic of a

rational consumer?

a.)

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Rational consumers analyze costs and benefits

when making

decisions.

Ben was offered a full-time position working on

his uncle's

construction crew and would be paid $20 per

hour. Instead, Ben

chose to take classes at the local college so he

could finish his

degree.

In economic terms, this loss of potential income

is known as a(n)

__________.

d.)

opportunity cost

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Resource Allocation

for Consumers

Which of the following statements is true as it

relates to labor/

leisure trade-off?

d.)

It is the comparison of time spent working to time

spent participating in non-work activities.

Terry currently works a part-time evening job on

campus. With

this job, he has free time on the weekends to

hang out with his

friends and catch up on school work. However, a

nearby shoe

store, Speedy Feet, is hiring for $10/hour. He

would be able to

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earn a higher income and a significant discount

on running gear

that he would be buying anyway.

Terry has to take into consideration which of the

following

economic principles when deciding whether to

forego his current

job at the university in favor of a job at the shoe

store?

b.)

Labor/leisure trade-off

c.)

Economists assume that all rational consumers

will allocate their

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resources in order to __________.

maximize their utility

Cost and Benefit

Optimization for

Consumers

Sarah is deciding between two different pairs of

running shoes:

The Minimalist 7, which cost $99, and the Sprint

XT, which are

priced at $155. Although both would meet her

needs, Sarah knew

that she would get more wear and more support

out of the higherpriced Sprint XT shoe.

If she wanted to buy the shoes today, Sarah had

the ability to pay

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$99 for the Minimalist 7s. However, if she wanted

to buy the

Sprint XTs, she would need to pick up another

shift at her job to

earn the extra money.

Which of the following statements describes the

marginal cost?

b.)

Sarah must work another night.

Paul is deciding between two different types of

winter jackets: The

Classic, which costs $120, and the Extreme,

which is priced at

$195. Although both would meet his needs, Paul

knows that he

would get more wear out of the higher-priced

jacket because it

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includes an extra layer and a hood.

c.)

If Paul waits and purchases the more expensive

jacket, it will

provide more warmth and he will get more wear

out of it, which is

also known as a __________.

marginal benefit

While helping Kyle choose new shoes, the

running store owner,

Juan, learned that Kyle runs primarily in the

evenings and is

allergic to formaldehyde, a chemical found in

most wool. He also

learned that Kyle does not like energy drinks, as

they upset his

stomach.