Q1) The govt. decides to require the oil refineries in Yanbu to use expensive filters to prevent air pollution. This reduces pollution but also increase the cost of refining oil. Saudis must pay a higher price for oil to get cleaner air. This shows the principle that

a) trade can make everyone better off.

b) rational people think at the margin.

c) people face tradeoffs.

d) people respond to incentives

Q2) Sam decides to spend three hours working overtime rather than going to the park with her friends. She earns $40 per hour for overtime work. Her opportunity cost of working is:

a) the $120 she earns working.

b) b) the$120 minus the enjoyment she would have received from going to the park.

c) the enjoyment she would have received had she gone to the park.

d) nothing, since she would have received less than $120 worth of enjoyment from going to the park.

Q3) The iPhone 14 is $5000 and the iPhone 14 Pro is $7000. If you choose to buy the iPhone 14 Pro, your purchase implies that:

a) your marginal benefit from using the Pro is more than the marginal cost of $2000.

b) your marginal benefit from using the Pro is less than the marginal cost of $2000.

c) your marginal benefit from using the Pro is more than the marginal cost of $7000.

d) your marginal benefit from using the Pro is more than the marginal cost of $5000.

Q4) Market starts charging for plastic bags. This encourages shoppers to bring their own shopping bags from home. Which principle of economics does this illustrate?

a) People face tradeoffs.

b) The cost of something is what was got up to get it.

c) Rational people think at the margin.

d) People respond to incentives.

Q5) Saudi Arabia exports plastics to UAE and imports consulting services from UAE. This trade can benefit both countries in all of the following cases except:

a) if Saudi Arabia has an absolute advantage in both plastics and consulting services.

b) if UAE has an absolute advantage in both plastics and consulting services.

c) If Saudi Arabia has a comparative advantage in plastics and UAE has a comparative advantage in consulting services.

d) If Saudi Arabia has a comparative advantage in both plastics and consulting services.

Q6) Communist countries worked according to the belief that

a) markets were the best way to organize economic activity.

b) central planners were in the best position to determine the allocation of scarce resources in the economy.

c) Households and firms, guided by an "invisible hand," could achieve the most efficient allocation scarce resources.

d) allowing the market forces of supply and demand to operate with no government intervention would achieve the most efficient allocation of scarce resources

Give explanation