1. Donald D-Grade is in class today.He could have been sleeping (which he values at $6) or working in the library (for which he is paid $7) or hanging out with his buddies at the College Caffeine Cave (which he values at $12).The opportunity cost of Donald's attending class today is

a.$12, because this is the most highly valued alternative given up.

b.$7, because he gets money for working in the library.

c.$6, because this minimizes the cost of attending class today.

d.$25, because being in class prevented him from doing all the other activities.

2. A new hormone increases the milk yield of dairy cows.In the milk market, we would predict

Select one:

a. a decrease in supply, a lower equilibrium price, and a lower equilibrium quantity.

b. an increase in supply, a lower equilibrium price, and a higher equilibrium quantity.

c. a decrease in supply, a higher equilibrium price, and a higher equilibrium quantity.

d. an increase in supply, a higher equilibrium price, and a lower equilibrium quantity.

3. A rightward shift of the supply curve for widgets (a normal good) might be caused by

Select one:

a. an increase in consumer income.

b. a decline in the prices of inputs used to produce widgets.

c. an increase in the price of widgets.

d. some firms leaving the widget industry.

4. Assume that potatoes are an inferior good. If income increases

Select one:

a. the demand curve for potatoes will shift to the left.

b. there will be a movement up the demand curve for potatoes.

c. there will be a movement down the demand curve for potatoes.

d. the demand curve for potatoes will shift to the right.

5. Vodka and gin are consumption substitutes. Which of the following will cause the demand for vodka to fall?

Select one:

a. An increase in the supply of vodka.

b. An increase in the supply of gin.

c. A decrease in the demand for gin.

d. A decrease in the supply of vodka.