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versionaexam1 - Version A Multiple Choice Identify the...

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Version A Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Sarah buys and sells real estate. Two weeks ago, she paid $140,000 for a house on Oak Street, intending to spend $20,000 on repairs sell the house for $175,000. Last week, the city government announced a plan to build a “halfway house” for convicted criminals on Oak Street. As a result of the city’s announced plan, Sarah is weighing two alternatives: She can go ahead with the $20,000 in repairs and then sell the house for $135,000, or she can forgo the repairs and sell the house as it is for $120,000. Sarah should a. go ahead with the $20,000 in repairs and sell the house for $135,000. b. move the house from Oak Street to a more desirable location, irrespective of the cost of doing so. c. forgo the repairs and sell the house as it is for $120,000. d. keep the house and live in it. ____ 2. In the case of perfectly inelastic demand, a. infinitely-large changes in quantity demanded result from very small changes in the price. b. the percentage change in quantity demanded equals the percentage change in price. c. quantity demanded stays the same whenever price changes. d. the change in quantity demanded equals the change in price. ____ 3. Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, ____ 4. The invisible hand works to promote general well-being in the economy primarily through ____ 5. A movement along the supply curve might be caused by a change in Figure 6-2
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____ 6. Refer to Figure 6-2 . If the government imposes a price floor of $14 in this market, the result would be a a. shortage of 20. b. surplus of 20. c. surplus of 40. d. shortage of 40. Figure 2-4 ____ 7. Refer to Figure 2-4 . If the economy moves from point A to point D, the opportunity cost is ____
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