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1 Agec 105 Exam 1 Spring 2010 Name: ______________________________ Choose the single best answer for each question. Each question is worth 2.5 points. 1.Economics is the study of a. scarcity under conditions of democracy b. choice within a system of capitalism c. financial markets d. the role of government in a market system e. choice under conditions of scarcity 2.What an economic decision maker must give up when choosing one economic activity over others is known as the 3.High-income people will sometimes pay higher prices at convenience stores for goods that are available at discount stores. They do this because 4.When individuals come together to buy and sell goods and services, they form a(n) 5.The law of demand says that as the price of a good rises, the quantity demanded of the good tends to fall. a. True b. False
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2 6.Figure above illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time. What is the opportunity cost for this person of moving from point a to point b? a. $5 of income per week b. $10 of income per week c. two hours of studying per week d. $10 per hour of studying per week e. $20 of income per week 7.An increase in the price of a good results in a(n) 8.When there is a change in demand, 9.Sam graduates from college, where he earned $2,000 a year working part-time, and takes a job as an accountant, where he now earns $25,000 per year. After receiving his first paycheck, he gave away his bicycle and purchased a new car. Therefore,