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review midterm - Disclaimer Note that the following are...

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Disclaimer: Note that the following are simply extra practice questions, and are not a substitute for attending the lecture, reading the class notes, the book, doing the homework, and attending discussion. Scarcity: The situation in which unlimited wants exceed the limited resources available to fulfill those wants. 11. Forest is a mountain man living in complete isolation in Montana. He is completely self- sufficient through hunting, fishing, and farming. He has not been in the city to buy anything in five years. One can infer A) the scarcity principle does not apply to Forest. B) Forest is not required to make choices. C) the scarcity principle still applies because more hunting means less fishing and farming. D) Forest is very satisfied. E) Forest is not rational. Answer: C Learning Objective: Discuss the Scarcity Principle 14. Josh wants to go to the football game this weekend, but he has a paper due on Monday. It will take him the whole weekend to write the paper. Josh decided to stay home and work on the paper. According to the scarcity principle, the reason Josh didn't go to the game is that Opportunity cost: The highest-valued alternative that must be given up to engage in an activity. 33. The opportunity cost of an activity is the value of 31. Jen spends her afternoon at the beach, paying $1 to rent a beach umbrella and $11 for food and drinks rather than spending an equal amount of money to go to a movie. The opportunity cost of going to the beach is:
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