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Homeowrk 2 - Name: _ Fall 2007 Homework #1 Multiple Choice...

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Name: ________________________ Fall 2007 Homework #1 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. The phenomenon of scarcity stems from the fact that a. most economies’ production methods are not very good. b. in all economies, people have unlimited wants and needs. c. resources are limited in nature. d. both B and C must be true. ____ 2. The opportunity cost of going to college is a. the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses. b. the value of the best alternative a student gives up to attend college. c. zero for students who are fortunate enough to have all of their college expenses paid by someone else. d. both A and B totaled. ____ 3. The average cost per seat on the 50-passenger Floating-On-Air Bus company's trip from Kansas City to St. Louis, on which no refreshments are served, is $45. In advance of a particular trip, three seats remain unsold. The minimum the bus company could charge to increase its profit is a. anything above $0 b. anything above or equal to $45 c. anything above or equal to $60 d. none of the above. ____ 4. With respect to the attainment of an efficient allocation of resources, which of the following statements is correct? a. Markets are always a good way to organize economic activity. b. Markets are often a good way to organize economic activity. c. Markets are seldom a good way to organize economic activity. d. Markets are never a good way to organize economic activity. ____ 5. Market failure can be caused by a. low consumer demand. b. government intervention and price controls. c. externalities and market power. d. all of the above. ____ 6. If the average income of an Australian is higher than the average income of a Russian, it is most likely because a. productivity is higher in Australia than in Russia. b. Australia has a more industrial economy than Russia. c. there is more competition in Australia than in Russia. d. labor unions are more powerful in Australia than in Russia.
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____ 7. The tradeoff between inflation and unemployment a. implies that policies designed to reduce unemployment also reduce inflation. b. was eliminated by improved economic policies in the 1900s. c. is a long-run tradeoff, persisting for decades, according to most economists. d. none of the above are correct. ____ 8. An economic theory about international trade that is based on the assumption that there are only two countries and two goods a. can be useful in helping economists understand the complex world of international trade involving many countries and many goods. b.
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This note was uploaded on 04/24/2009 for the course ECON 2105h taught by Professor Staff during the Spring '08 term at UGA.

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Homeowrk 2 - Name: _ Fall 2007 Homework #1 Multiple Choice...

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