Econ_002_Exam___1-1 - Econ 002 Exam 1 Student 1 Economics is best defined as the study of A prices and quantities B inflation and interest rates C how

Econ_002_Exam___1-1 - Econ 002 Exam 1 Student 1 Economics...

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Econ 002 Exam # 1 Student: ___________________________________________________________________________1. Economics is best defined as the study of 2. The cost-benefit principle indicates that an action should be taken 3. The opportunity cost of an activity is the value of 4. The cost that we can not avoid whether or not an action is taken, is called 1
5. The marginal benefit of an activity is the 6. Tony notes that an electronics store is offering a flat $20 off all prices in the store. Tony reasons that if he wants to buy something with a price of $50 that it is a good offer, but if he wants to buy something with a price of $500 it is not a good offer. This is an example of 7. A cost or benefit that does not matter in making decisions is 8. Catherine and Nancy both own homes with similar size lawns. Catherine mows her own lawn while Nancy hires someone to mow hers. Assume both women are rational decision makers. Which is the best explanation of the different decisions they make?

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