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Q1W11 - Name Test Form A Economics 1 Quiz 1 True-False...

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Name Test Form A Economics 1 Quiz 1 January 28, 2011 True-False Questions: Fill in Bubble A for True, Bubble B for False. 1. For a consumer, the opportunity cost of purchasing a good includes the value of the time he or she must spend to acquire the good, but it does not include the money he or she must pay for the good. 2. The Law of Demand holds that an increase in the incomes of consumers increases their demand for a good. 3. If a series of trades among buyers and sellers results in an efficient outcome, it is impossible to find a rearrangement of those trades that would make at least one buyer or seller better off without making another worse off. 4. The price elasticity of the demand for milk is four times higher if the quantity of milk is measured in quarts instead of gallons. (There are four quarts in a gallon.) 5. If the Laws of Supply and Demand hold in the market for a good, the price of the good will increase when the price of a complement for the good increases. Multiple Choice Questions 6. A UCBS alum just donated a building to the university. What is the opportunity cost for the university to use the building as an off-campus classroom? (a) Zero because the building was donated to the campus (b) The most anyone except the university would be willing to pay to rent the building (c) The most the university would be willing to pay to use the building if it didn’t own it (d) The value of the additional time UCBS students must use to get to the off-campus building rather than a classroom on the campus.
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Economics 1 2 7. Melissa has just finished Econ 1. At the beginning of the term, she bought the Econ 1 textbook for $30. Justin is taking Econ 1 next quarter, and he has offered to buy Melissa’s textbook for $10. Justin’s offer is the only offer Melissa received for her used textbook. What is her opportunity cost of keeping her Econ 1 textbook and adding it to her personal library? (a) $0 (b) $30 (c) $10 (d) $20 (e) $40 8. Ten farmers have come to the Saturday farmers’ market in Appleton. Each has one bushel of apples to sell, and each is willing to sell for a price of $30 or more. Twenty residents of Appleton have also come to the market. Each is willing to pay as much as $40 for a bushel of apples. None of the Appleton residents is willing to buy more than one bushel. In a competitive equilibrium in Appleton farmers’ market, what is the profit of sellers?
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