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Chapter1-problem set(answer).pdf

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University of Waterloo
ECON 102
Richard Ennis

Chapter1problem setMultiple Choice Identify the choice that best completes the statement or answers the question 1 With what concept does economics deal primarily with a scarcity b poverty c change d power2 What does economics study a business b how society manages its scarce resources c central planning d government regulation3 What does the adage There is no such thing as a free lunch mean a Even people on welfare have to pay for food b The cost of living is always increasing c To get something we like we usually have to give up another thing we like d All costs are included in the price of a product4 Henry decides to spend 2 hours playing golf rather than working at his job which pays 8 per hour What is Henrys tradeoff a the 16 he could have earned working for 2 hours b nothing because he enjoys playing golf more than working c the increase in skill he obtains from playing golf for those 2 hours d nothing because he spent 16 for green fees to play golf5 What does efficiency mean a Society is conserving resources in order to save them for the future b Societys goods and services are distributed fairly among societys members c Society has lessened its dependence on foreign energy sources d Society is getting the most it can from its scarce resources6 When the government attempts to cut the economic pie into more equal slices what happens a It is easier to cut the pie and therefore the economy can produce a larger pie b The government can more easily allocate the pie to those most in need c The pie gets smaller and there will be less pie for everyone d The economy will spend too much time cutting and loses the ability to produce enough pie for everyone7 What is the opportunity cost of going to college a the total spent on food clothing books transportation tuition lodging and other expenses b the value of the best opportunity a student gives up to attend college c zero for students who are fortunate enough to have all of their college expenses paid by someone else d zero since a college education will allow a student to earn a larger income after graduation
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