exam 1 practice

exam 1 practice - The central concern of economics is A....

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The central concern of economics is A. poverty. B. scarcity. C. wealth accumulation. D. overconsumption. Janie must either mow the lawn or wash clothes, earning her a benefit of $30 or $45, respectively. She dislikes both equally and they both take the same amount of time. Janie will therefore choose to _________because the economic surplus is ________. A. mow; greater B. wash; greater C. mow; smaller D. wash; smaller Larry was accepted at three different graduate schools, and must choose one. Elite U costs $50,000 per year and did not offer Larry any financial aid. Larry values attending Elite U at $60,000 per year. State College costs $30,000 per year, and offered Larry an annual $10,000 scholarship. Larry values attending State College at $40,000 per year. NoName U costs $20,000 per year, and offered Larry a full $20,000 annual scholarship. Larry values attending NoName at $15,000 per year. The opportunity cost of attending Elite U is A. $50,000 B. $10,000 C. $20,000 D. $15,000 The opportunity cost of attending State College is A. $30,000 B. $20,000 C. $15,000 D. $10,000 Larry maximizes his surplus by attending A. Elite U, because $60,000 is greater than the benefit at the other schools. B. State College, because the difference between the benefit and cost is greatest there. C. NoName U, because Larry has a full scholarship there. D. Elite U, because the opportunity costs of attending Elite U are the lowest. Larry has decided to go to Elite U. He must have A. calculated his surplus from each choice and picked the one with the highest surplus. B. underestimated the benefits of attending NoName. C. overestimated the benefits of attending Elite U. D. determined the opportunity cost of each choice and picked the one with the lowest opportunity cost. Relative to a person who earns minimum wage, a person who earns $30 per hour has A. a lower opportunity cost of working longer hours. B. a higher opportunity cost of taking a day off. C. a lower opportunity cost of driving farther to work. D. the same opportunity cost of spending time on leisure activities.
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Suppose the most you would be willing to pay for a plane ticket home is $250, but you buy one online for $175. The economic surplus of buying the online ticket is: A. $175. B. $250. C. $75. D. $0. If one fails to account for opportunity costs in decision making, then applying the cost-benefit rule will be flawed because A. the benefits will be overstated. B. the costs will be understated. C. the benefits will be understated. D. the costs will be overstated. Pat earns $25,000 per year (after taxes), and Pat's spouse, Chris, earns $35,000 (after taxes). They have two pre- school children. Childcare for their children costs $12,000 per year. Pat has decided to stay home and take care of the children. Pat must A. value spending time with the children by more than $25,000. B. value spending time with the children by more than $12,000.
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exam 1 practice - The central concern of economics is A....

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