6 After much consideration, you have chosen Cancun over Ft. Lauderdale as your Spring Break destination this year. However, Spring Break is still months away, and you may reverse this decision. Which of the following events would prompt you to reverse this decision?

a.The marginal benefit of going to Cancun increases

.b.The marginal cost of going to Cancun decreases

.c.The marginal benefit of going to Ft. Lauderdale decreases.

d.The marginal cost of going to Ft. Lauderdale decreases

7 Ramona decides to spend two hours taking a nap rather than attending her classes. Her opportunity cost of napping is

a.the value of the knowledge she would have received had she attended class.

b.the $24 she could have earned if she had worked at her job for those two hours

.c.the value of her nap minus the value of attending class.

d.nothing, since she valued sleep more than attendance at class

8 During the 1990s, the United Kingdom experienced low levels of inflation while Turkey experienced high levels of inflation. A likely explanation of these facts is that

a.the United Kingdom has a better education system than Turkey.

b.the rate of growth of the quantity of money was slower in the United Kingdom than in Turkey.

c.workers in Turkey are more productive than workers in the United Kingdom.

d.there are more instances of market power in Turkey than in the United Kingdom.

9 Olivia was accepted by Northwestern and by another university. She is trying to decide where to go. Which of the following should influence her decision?

a.how much she spent applying to Northwestern, and the difference between living expenses at Northwestern and the other university

b.how much she spent applying to Northwestern, but not the difference between living expenses at Northwestern and the other university

c.the difference between living expenses at Northwestern and her second choice, but not how much she spent applying to Northwestern

d.neither how much she spent applying to Northwestern nor the difference between living expenses at Northwestern and her second choice

10 In a particular country in 1998, the average worker needed to work 40 hours to produce 100 units of output. In that same country in 2008, the average worker needed to work 36 hours to produce 72 units of output. In that country, the productivity of the average worker

a.decreased between 1998 and 2008, so we would expect the standard of living to have decreased accordingly.

b.increased between 1998 and 2008, so we would expect the standard of living to have increased accordingly.

c.decreased between 1998 and 2008, so we would expect inflation to have decreased accordingly.

d.increased between 1998 and 2008, so we would expect inflation to have increased accordingly.

11 In the short run, which of the following isnotcorrect?

a.Increasing the money supply increases the demand for goods and services

.b.Increasing the money supply encourages firms to hire more workers.

c.Lowering the money supply leads to a higher level of unemployment.

d.Policies that encourage higher employment will also induce a lower rate of inflation

13 Which of the following is a principle concerning how people interact?

a.Markets are usually a good way to organize economic activity.

b.Rational people think at the margin

.c.People respond to incentives.

d.All of the above are correct

14 Which of the following statements about markets is most accurate?

a.Markets are usually a good way to organize economic activity

.b.Markets are usually inferior to central planning as a way to organize economic activity.

c.Markets fail and are therefore not an acceptable way to organize economic activity.

d.Markets are a good way to organize economic activity in developed nations, but not in less developed nations.