practice exam 1

practice exam 1 - Exam Name_

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Exam Name___________________________________   TRUE/FALSE.  Write 'T' if the statement is true and 'F' if the statement is false.  1) 
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Scarcity  refers to a  situation  in which  unlimited  wants  exceed  the  limited  resources  available  to fulfill  those  wants. 
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1) 
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_______    2) 
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An  economic  model is a  simplified  version of  reality  used to  analyze  real - world  economic  situations. 
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2)  ______ _    3) 
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If it costs  Sinclair  $300 to  produce 3  suede  jackets  and $420  to  produce 4  suede  jackets,  then the  difference  of $120 is  the  marginal  cost of  producing  the 4th  suede  jacket.   
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3)  ______ _    4) 
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Suppose  the extra  cost to  Apple of  producing  another  iPhone is  $75.  Then,  Apple  should  produce  this unit  even if it  can only  sell it for  $75. 
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4)  ______ _    5) 
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When  voluntary  exchange  takes  place,  both  parties  gain from  the  exchange. 
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5)  ______ _    6) 
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decrease  in the  unemploy ment rate  may be  represente d as a  movemen t from a  point on  the  productio possibiliti es frontier  to a point  outside  the  frontier. 
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6)  ______ _    7) 
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If a  country is  producing  efficiently  and is on  the  productio possibiliti es  frontier,  the only  way to  produce  more of  one good  is to  produce  less of the  other.  
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7)  ______ _    8) 
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It is  possible  to have a  comparati ve  advantage  in  producing  a good or  service  without  having an  absolute  advantage
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8)  ______ _    9) 
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practice exam 1 - Exam Name_

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