StudyGuide#1AnswerKey.pdf - PRINCIPALS OF MICROECONOMICS...

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P RINCIPALS OF M ICRO E CONOMICS S TUDY G UIDE #1: C HAPTERS 1-7 D UE : R EFER TO C OURSE C ALENDAR M AKE SURE YOU ARE A WARE OF THE P OLICIES SURROUNDING THIS A SSIGNMENT C HAPTER O NE : F OUNDATIONS OF E CONOMICS 1. What is an opportunity cost?
2. A friend pays for your lunch. Is this an example of a “free lunch”? Why or why not.
3. Economists say that individuals make decisions at the margin. What does this mean?
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2 Consider this : Suppose that one spring day, you are feeling quite zealous and decide to do a thorough cleaning of your home. You dust, vacuum, scrub and mop all the floors, clean out your

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