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ProblemSet1-5

# ProblemSet1-5 - EC201 Spring 2010 Professor Steven Haider...

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EC201: Spring 2010 Professor Steven Haider Problem Sets for Chaps 1-5 NOTE: An answer key follows each of the chapters. In the answer key, each question is assigned a “Topic”, which generally refers to a subtitle of the text. Thus, if you would like additional information about any of the questions, these topics will point you to where to look in the text. Version: 29-Dec-09

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Chapter 1 1. If resources are “scarce” it means that they: A) cannot provide enough goods or services to satisfy all human material wants and needs. B) have no opportunity cost. C) are probably not valued by consumers. D) have an unlimited supply. 2. Opportunity cost is: A) about half of the monetary cost of a product. B) the dollar payment for a product. C) the benefit derived from a product. D) the value of the best alternative forgone in making any choice. 3. A choice made ________ is a choice whether to do a little more or a little less of something. A) at the front end B) in the beginning C) at the margin D) ceteris paribus 4. Margo spends \$10,000 on one year's college tuition. The opportunity cost of spending one year in college for Margo is: 5. A friend comes up to you and offers to give you a free ticket to the local professional team's baseball game that night. You decide to attend the game. The game takes five hours and costs you \$15 for transportation. If you had not attended the game, you would have worked at your part-time job for \$8 an hour. What is the cost of you attending the game? Page 1
Chapter 1 6. Increases in total output realized when individuals specialize in particular tasks and trade are known as: Page 2

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