homework1.1 - Name Macroeconomics Fall 2008 Homework#1...

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Name: ________________________ Macroeconomics Fall 2008 Homework #1 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Approximately what percentage of the world's economies experience scarcity? a. 100% b. 75% c. 50% d. 25% ____ 2. Mallory decides to spend three hours working overtime rather than watching a video with her friends. She earns $8 an hour. Her opportunity cost of working is a. the value of the enjoyment she would have received had she watched the video. b. nothing, since she would have received less than $24 of enjoyment from the video. c. the $24 she earns working. d. the $24 minus the value of the enjoyment she would have received from watching the video. ____ 3. Causes of market failure include a. externalities and foreign competition. b. externalities and market power. c. incorrect forecasts of consumer demand and foreign competition. d. market power and incorrect forecasts of consumer demand. ____ 4. If an externality is present in a market, economic efficiency may be enhanced by ____ 5. Most economists believe that an increase in the growth rate of money, which society does not initially expect, results in
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____ 6. Refer to Figure 2-2 . The figure represents a circular-flow diagram. Boxes A and B represent ____ 7. Refer to Figure 2-2 . The figure represents a circular-flow diagram. Boxes C and D represent a. households and government. b. the markets for goods and services and the financial markets. c. firms and government. d. None of the above are correct. ____
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