File 1 HW CH 1-2 CH 21 - Principles of Microeconomics This...

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1 Principles of Microeconomics This assigned covers Chapters 1, 2, and 21 Chapter 21: Problems from Book: Questions for Review: #1 through #7 (Same for both 6 th edition and 7 th edition) Problems and Applications: #1, #10 (Same for both 6 th edition and 7 th edition) Chapter 1: 1. Which of the following is an example of something economists study? a. Larry chooses to work overtime to earn extra money because his wife quit her job. b. John sells his economics textbook from last year to his friend for half the price of a new textbook. c. The unemployment rate in the U. S. is at its highest level in over fifty years. d. All of the above are correct. 2. Which of the following examples does not illustrate the principle represented by the adage, "There is no such thing as a free lunch"? 3. Frank has $500 to spend and wants to buy either a new amplifier for his guitar or a new mp3 player to listen to music while working out. Both the amplifier and the mp3 player cost $500, so he can only buy one. This illustrates the basic concept that a. trade can make everyone better off. b. people face trade-offs c. rational people think at the margin. d. people respond to incentives.
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2 4. The terms equality and efficiency are similar in that they both refer to benefits to society. However they are different in that 5. A rational decisionmaker
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