Everyday economics: costs, incentives, and trade-offs

30 questions · by Quizbun

Thirty questions on the economics of everyday choices. You'll practice opportunity cost, sunk costs, marginal cost, fixed and variable costs, incentives that backfire, scarcity and trade-offs, diminishing returns, and the hidden price of free. Expect concept questions (single choice), spot-every-example scenarios (multiple choice), and quick calculations (numeric input). Each explanation shows why the tempting wrong answer is wrong, and every question links to Wikipedia so you can check it and read more.

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Questions

Not answered. What does opportunity cost mean?
Not answered. You have one free evening. You could work an $80 extra shift, go to a $50 concert, or relax at home (worth about $30 to you). You pick the concert. What's the opportunity cost?
Not answered. Which of these involve a real opportunity cost?
Not answered. An outdoor concert is free to enter, but going means skipping a 4-hour shift that pays $15/hour and spending $12 on gas. What's the total economic cost of going, in dollars? (Enter a number.)
Not answered. You bought a $15 movie ticket in advance. By showtime you feel sick and would rather stay home. Which cost is sunk?
Not answered. What is the sunk cost fallacy?
Not answered. Fill in the blank: keeping a failing plan going only because of the time or money you've already put in is the '___ ___ fallacy.' (Give the two words before fallacy.)
Not answered. What is marginal cost?
Not answered. A gym charges a flat $40/month for unlimited visits, with no per-visit fee. Ignoring travel, what's the marginal cost of one more visit this month, in dollars? (Enter a number.)
Not answered. A bakery spends $120 in total to bake 50 loaves and $122 to bake 51. What's the marginal cost of the 51st loaf, in dollars? (Enter a number.)
Not answered. A workshop can make 100 chairs for $4,000 in total, or 120 chairs for $4,500. Over that range, what's the marginal cost per extra chair, in dollars? (Enter a number.)
Not answered. Economists say good decisions are made 'at the margin.' What does that mean?
Not answered. Which is the best example of a fixed cost for a small café?
Not answered. For the same café, which of these are variable costs that rise as it serves more cups?
Not answered. Fill in the blank: in the short run, a firm's total cost equals its fixed costs plus its ___ costs.
Not answered. A government pays a bounty for every dead cobra, hoping to reduce the number of cobras. Instead, people start breeding cobras to collect the money, and the population grows. What's an incentive that backfires like this called?
Not answered. In economics, what is an incentive?
Not answered. Which of these are examples of incentives with unintended consequences?
Not answered. In economics, what does scarcity mean?
Not answered. A country with a fixed budget can build more hospitals or more tanks, but not the maximum of both. What's this classic example of a trade-off called?
Not answered. How are a trade-off and an opportunity cost related?
Not answered. What point does the saying 'there's no such thing as a free lunch' (TANSTAAFL) make?
Not answered. A phone app costs nothing to download or use. What's its most likely hidden cost?
Not answered. A supermarket sells milk below its own cost to bring shoppers in, expecting them to fill their baskets with profitable items too. What's this pricing tactic called?
Not answered. What does the law of diminishing returns say?
Not answered. On a fixed plot of land, 1 worker harvests 10 baskets, 2 workers harvest 18 in total, and 3 workers harvest 24 in total. What's the marginal product of the 3rd worker, in extra baskets? (Enter a number.)
Not answered. When you're hungry, the first slice of pizza is delicious, the fourth is just okay, and the sixth feels like a chore. What's this called?
Not answered. Which of these are everyday examples of diminishing returns or diminishing marginal utility?
Not answered. A coffee shop offers unlimited coffee for $40/month. Otherwise you'd buy your usual 25 coffees a month at $2 each, which is $50. What percentage do you save each month by subscribing? (Enter the number only, e.g. 20 for 20%.)
Not answered. Which question best sums up thinking like an economist about an everyday choice?