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Unformatted text preview: guitaroranewmp3 playertolistentomusicwhileworkingout.Boththeamplifierandthemp3playercost$100,sohe canonlybuyone.Thisillustratesthebasicconceptthat a. tradecanmakeeveryonebetteroff. b. peoplefacetrade ­offs c. rationalpeoplethinkatthemargin. d. peoplerespondtoincentives.   12. Gunsandbutterareusedtorepresenttheclassicsocietaltradeoffbetweenspendingon a. durableandnondurablegoods. b. importsandexports. c. nationaldefenseandconsumergoods. d. lawenforcementandagriculture.  13. Atradeoffexistsbetweenacleanenvironmentandahigherlevelofincomeinthat a. studiesshowthatindividualswithhigherlevelsofincomepollutelessthanlow ­income individuals. b. effortstoreducepollutiontypicallyarenotcompletelysuccessful. c. lawsthatreducepollutionraisecostsofproductionandreduceincomes. d. employingindividualstocleanuppollutioncausesincreasesinemploymentandincome.    14. Whensocietyrequiresthatfirmsreducepollution,thereis a. atradeoffbecauseofreducedincomestothefirms'ownersandworkers. b. atradeoffonlyifsomefirmsareforcedtoclose. c. notradeoff,sincethecostofreducingpollutionfallsonlyonthefirmsaffectedbythe requirements. d. notradeoff,sinceeveryonebenefitsfromreducedpollution.   15. Economistsusethewordequalitytodescribeasituationinwhich a. eachmemberofsocietyhasthesameincome. b. eachmemberofsocietyhasaccesstoabundantquantitiesofgoodsandservices, regardlessofhisorherincome. c. societyisgettingthemaximumbenefitsfromitsscarceresources. d. society'sresourcesareusedefficiently.  16. Efficiencymeansthat a. societyisconservingresourcesinordertosavethemforthefuture. b. society'sgoodsandservicesaredistributedequallyamongsociety'smembers. c. society'sgoodsandservicesaredistributedfairly,thoughnotnecessarilyequally,among society'smembers. d. societyisgettingthemaximumbenefitsfromitsscarceresources.    17.Samantha’scollegeraisesthecostofroomandboardpersemester.ThisincreaseraisesSamantha’s opportunitycostofattendingcollege a. eveniftheamountshewouldhavetopayforroomandboardifshedidn’tattendcollege rosebythesameamount.AnincreaseinopportunitycostreducesSamantha’sincentive toattendcollege. b. eveniftheamountshewouldhavetopayforroomandboardifshedidn’tattendcollege rosebythesameamount.AnincreaseinopportunitycostincreasesSamantha’s incentivetoattendcollege. c. onlyiftheamountshewouldhavetopayforroomandboardifshedidn’tattendcollege rosebylessthantheincreaseintheamounthercollegecharges.Anincreasein opportunitycostreducesSamantha’sincentivetoattendcollege. d. onlyifth...
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