1 If I was supposed to have a date on Saturday, where I would have spent $40, but decided to stay home and watch TV, the opportunity cost of the date is:

a $40

b $40 plus watching TV

c Depends how the date would have went

d Watching TV

2 If the economy is operating at a point inside the production possibilities curve:

a Its resources are not being efficiently used

b The curve will shift inward

c Resources are tapped out

d It's a trick question because the economy cannot produce inside the curve

3 The amount of a product that buyers are willing and able to purchase at a given price is called:

a demand

b quantity demanded

c supply

d quantity supplied

4 As the price of a product decreases, the quantity demanded of that product will:

a Decrease

b Increase

c Stay the same

d Become zero

5 As the price of a product increases, the quantity supplied of that product will:

a Decrease

b Increase

c Stay the same

d Become zero

6 After his car breaks down on a hot day, jack walks a mile to the nearest store and buys a bottle of water for $2. He was so thirsty that he would have paid $5. Jack's consumer surplus is:

a $1

b $2

c $3

d $5

7 A price of a good or service that is set artificially high causes

a excess demand

b a shortage

c a surplus

d a quota

8 An increase in peoples' income will cause the demand curve to:

a Shift to the left

b Shift to the right

c Stay the same

d Become perfectly vertical

9 An increase in people' income will cause the equilibrium price & quantity:

a Price would increase and quantity would decrease

b Price would decrease and quantity would decrease

c Price would increase and quantity would increase

d Price would decrease and quantity would increase

10 If a product could be produced at a lower cost, what would be the effect on the equilibrium price and quantity?

a Price would increase and quantity would decrease

b Price would decrease and quantity would decrease

c Price would increase and quantity would increase

d Price would decrease and quantity would increase