Economics and Scarce C. Incomes

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BEC1034: Tutorial 1

Tri3 2012/13

Tutorial 1: Ten Principles of Economics Please try to answer all the questions. 1. The overriding reason why households and societies face many decisions is that a. resources are scarce b. goods and services are not scarce c. incomes fluctuate with business cycles d. people, by nature, tend to disagree 2. Which of the following examples does not illustrate the principle represented by the adage, "There is no such thing as a free lunch"? a. Joe needs to pay his rent and his electric bill b. Pete must choose between buying a new flat screen television and buying his textbooks for this semester c. Kevin must decide between studying for his economics exam and working at his parttime job d. Lisa can spend her money on a new sweater or a pair of jeans 3. Which of the following is not an example of the opportunity cost of going to school? a. The money a student could have earned by working if he had not gone to college b. The nap a student could have enjoyed if he had not attended class c. The party a student could have enjoyed if he had not stayed in to study for his exam d. The money a student spends on rent for his apartment while attending school 4. Shane receives RM100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs RM100. Finally he decides on Option B. The opportunity cost of this decision is a. the value to Shane of the option he would have chosen had Option B not been available b. the value to Shane of Options A, C and D combined c. RM50 d. RM100 5. Efficiency a. and equality both refer to how much a society can produce with its resources b. and equality both refer to how fairly the benefits from using resources are distributed between members of a society c. refers to how much a society can produce with its resources. Equality refers to how evenly the benefits from using resources are distributed among...
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