Micro-Economics Ch 1-5 Review

Micro-Economics Ch 1-5 Review - Chapters 1 5 Review 1 How...

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Chapters 1 - 5 Review 1. How people choose among the alternatives available to them is: • A) a description of economics. • B) a theory of opportunity costs. • C) the study of microeconomics. • D) all of the above. Chapters 1 - 5 Review 2. If the state government allocates additional spending on education, the opportunity cost is: • A) zero. • B) the dollar amount of the additional spending. • C) only considered if additional taxes need to be raised to fund the spending. • D) measured in terms of the alternative uses for that money. Chapters 1 - 5 Review 3. Khalil is offered a free ticket to the opera. His opportunity cost of going to the opera is: • A) zero—the tickets were free. • B) the price listed on the ticket. • C) whatever Khalil would have done had he not gone to the opera. • D) both B and C. Chapters 1 - 5 Review 4. The concept of the margin deals with: • A) making incremental choices. • B) one more or one less of something. • C) doing a little more or a little less. • D) all of the above.
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Chapters 1 - 5 Review 5. If the price of gasoline rises and stays high for an extended period of time, we expect people to: • A) reduce the number of miles they drive. • B) buy smaller and more gas efficient cars. • C) use more public transportation. • D) do all of the above. Chapters 1 - 5 Review 6. Increases in total output realized when individuals specialize in particular tasks and trade are known as: • A) the gains from trade. • B) the profits obtained from sales of a good or service. • C) marginal analysis. • D) a tradeoff. Chapters 1 - 5 Review 7. According to economists, equilibrium exists when: • A) output is distributed equitably. • B) scarcity is eliminated. • C) an individual would be better off taking a different action. • D) no individual has an incentive to change their behavior. Chapters 1 - 5 Review 8. If an economy has not achieved efficiency, there must exist ways to: • A) increase opportunity costs. • B) eliminate inequity. • C) make some people better off without making others worse off. • D) increase the incentives for its citizens to follow their own self-interest.
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Chapters 1 - 5 Review 9. The fact that a society's production possibilities curve is bowed out or concave to the origin of a graph demonstrates the law of: • A) increasing opportunity cost. • B) decreasing opportunity cost. • C) constant opportunity cost. • D) concave opportunity cost. Chapters 1 - 5 Review 10. Technological improvements will: • A) leave the production possibilities curve unchanged. • B) shift the production possibilities curve
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This note was uploaded on 12/02/2011 for the course ECONOMICS 202 taught by Professor Black during the Fall '08 term at Boise State.

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Micro-Economics Ch 1-5 Review - Chapters 1 5 Review 1 How...

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