plugin-PS_1 - Any typo or mistake is on me. Any questions,...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Any typo or mistake is on me. Any questions, email me. xgu@econ.rutgers.edu Econ 103: Sec.05 Problem Set #1: Due on Tuesday 14 th September 2010 Note: 1. Do it LOL. Do it independently . Do it carefully. 2. Write your answer on the answer sheet attached. I only collect answer sheets on Tuesdays. 3. Good Luck! 1. Statement 1: Scarcity means that there is less of a good or resource available than people wish to have. Statement 2: Equality refers to how the pie is divided, and efficiency refers to the size of the economic pie. a.1 is true; 2 is true. b.1 is true; 2 is false c.1 is false; 2 is true d.1 is false; 2 is false. 2. The adage, "There is no such thing as a free lunch," means a. even people on welfare have to pay for food. b. the cost of living is always increasing. c. people face tradeoffs. d. all costs are included in the price of a product. 3. Sophia is planning her activities for a hot summer day. She would like to go to the local swimming pool and see the latest blockbuster movie, but because she can only get tickets to the movie for the same time that the pool is open she can only choose one activity. This illustrates the basic principle that a. people respond to incentives. b. rational people think at the margin. c. people face tradeoffs. d. improvements in efficiency sometimes come at the expense of equality. 4. As a result of a successful attempt by government to cut the economic pie into more equal slices, a. it is easier to cut the pie, and therefore the economy can produce a larger pie. b. those who earn more income pay less in taxes. c. the pie gets smaller, and there will be less pie overall. d. government will spend too much time cutting and it causes the economy to lose the ability to produce enough pie for everyone. 5. Sue drinks three sodas during a particular day. The marginal benefit she
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Any typo or mistake is on me. Any questions, email me. xgu@econ.rutgers.edu enjoys from drinking the third soda a. can be thought of as the total benefit Sue enjoys by drinking three sodas minus the total benefit she would have enjoyed by drinking just two sodas. b. determines Sue’s willingness to pay for the third soda. c. is likely different from the marginal benefit provided to Sue by the second soda. d. All of the above are correct. 6. Suppose your management professor has been offered a corporate job with a 30 percent pay increase. He has decided to take the job. For him, the marginal a. cost of leaving was greater than the marginal benefit. b. benefit of teaching was greater than the marginal cost. c. benefit of leaving was greater than the marginal cost.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 8

plugin-PS_1 - Any typo or mistake is on me. Any questions,...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online