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Econ211Exam1ReviewAnswers - Review#1 Answers Multiple...

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Review #1 Answers: Multiple Choice 1. E 2. A 3. B 4. A 5. D 6. C 7. D 8. A 9. C 10. E 11. D 12. B 13. B 14. D 15. D 16. C 17. D 18. C 19. B 20. A 21. E 22. B 23. E 24. D 25. B 26. E 27. B 28. D 29. B 30. C 31. D 32. D 33. A 34. E 35. D 36. C 37. A 38. C 39. D 40. E
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Short Answer. Below I give only the general gist of what I would look for. Your answers should be more fully explained than these. 1. A 10% increase in movie prices would lead to an 8.7% decline in attendance; a 10% increase in incomes would lead to a 8.1% increase in attendance. Long-run demand is usually more elastic than short run, so a number more negative than -0.87. 2. Low opportunity cost of time for runners, and low opportunity cost to the cities for use of their roads. 3. Opportunity cost: If Tiger football players are required to go to an extra practice each week, their grades will decline. Tradeoffs: For every new economics faculty member hired, there are less office spaces in Sirrine Hall available for graduate students and others. Decision-making at the margin: DCIT must decide whether and when to upgrade faculty desktop computers to Windows Vista. Incentives: Tommy Bowden’s contract indicates pay bonuses if the Tigers end the season nationally ranked. 4. The marginal benefit of attending a particular event is the same, regardless of the presence of children. The marginal cost is higher with children because of the babysitter cost. Therefore, parents will go out less frequently.
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