1.Julia is considering traveling to Los Angeles for spring break. The airfare to fly to California is $300. The hotel costs are $500. She would be willing to pay up to $1000 to go if she had to. She could stay in Nashville and earn $400 working. Should she go?

a.No, the costs are greater than the benefits.

b.I don't know without knowing the benefits.

c.Yes, the benefits are greater than the costs.

d.I cannot tell, as the costs are equal to the benefits.

2.Suppose you bought a $100 ticket to a non-refundable hockey game. What is the opportunity cost of going to the hockey game?

a.$100

b.$100 plus what you would have done with your time instead.

c.Zero, plus what you would have done with your time instead.

d.None of the above.

3.If an economy desired technical efficiency, it would strive to

a.eliminate scarcity.

b.eliminate opportunity costs.

c.produce as many goods as possible with its resources.

d.produce the goods that society values the most.

4.Consider a market for a service. An increase in the price of a good consumers think of a substitute for this service will do which of the following? The equilibrium price of the service will______________equilibrium quantity will______________.

a.increase; decrease

b.increase; increase

c.decrease; decrease

d.decrease; increase

5.A decrease in supply combined with a decrease in demand will do what to prices in the market?

a.increase

b.decrease

c.not change

d.We cannot tell without more information.

6.Supply increases in a market and demand decreases. The price in the market will:

a.increase

b.decrease

c.not change

d.could either increase or decrease