Exam 1 - Agec 105 Exam 1 Spring 2010 Name Choose the single...

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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 a. alternative cost b. decision cost c. foregone cost d. opportunity cost e. economic cost 3. High-income people will sometimes pay higher prices at convenience stores for goods that are available at discount stores. They do this because a. they are irrational b. their opportunity cost of time is low c. crowded and understaffed discount stores impose higher time costs d. they like to be seen paying more money e. they do not mind wasting time 4. When individuals come together to buy and sell goods and services, they form a(n) a. economy b. market c. production possibilities frontier d. supply curve e. demand curve 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) a. decrease in demand b. increase in demand c. increase in quantity demanded d. decrease in quantity demanded e. increase in supply 8. When there is a change in demand, a. there is a rightward movement along the demand curve b. there is a leftward movement along the demand curve c. there is a shift of the supply curve d. changes in price lead to different changes in quantity demanded e. there is a shift of the demand curve 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, a. bicycles are not a normal good for Sam and are likely to be inferior b. automobiles are an inferior good for Sam c. bicycles are a normal good for Sam d. Sam's supply curve for automobiles is upward-sloping e. bicycles and automobiles are complementary goods for Sam
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3 10. Which of the following sets of goods are most likely to be complementary goods? a. shoes and pizza
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Exam 1 - Agec 105 Exam 1 Spring 2010 Name Choose the single...

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