1) Good A and good B are substitutes in production. The demand for good A decreases, which lowers the price of good A. The decrease in the price of good A A) decreases the supply of good B. B) increases the supply of good B. C) decreases the demand for good B. D) increases the demand for good B. 2) Today, Julie attended her 12:30 Economics class. If she hadn't gone to class, Julie would have gone out to lunch with friends. She had other options; she could have worked or slept in Julie's opportunity cost of going to class is the A) income from working she gave up B) sleep she gave up.. C) lunch she gave up. D) income from working lunch, and sleep she gave up. 3) If production point is inside the production possibilities frontier A) it is not possible to produce more of both goods. B) production is inefficient. C) in order to produce more of one good, less of the other must be produced. D) production is in the "unattainable" region. 4) In part, microeconomics is concerned with A) how a business firm decides upon the amount it produces and the price it sets. B) changes in the economy's total output of goods and services over long periods of time. C) factors that explain changes in the unemploy ment rate over time. D) the Federal Reserve's policy decisions. 5) Sweatshirts and tee-shirts are complements in consumption and the price of a sweatshirt increases As a result, the demand for A) sweatshirts will increase that is, the demand curve will shift rightward. B) tee-shirts will increase that is, the demand curve will shift rightward. C) sweatshirts will decrease that is, the demand curve will shift leftward. D) tee-shirts will decrease that is, the demand curve will shift leftward. 6) Pepsi and Coca Cola are substitutes in consumption. The price of a Coca Cola increases so the demand for A) Coca colas will increase, that is, the demand curve will shift rightward. B) Pepsi will decrease,that is, the demand curve will shift leftward. C) Coca colas will decrease, that is, the demand curve will shift leftward. will shift will increase, that is,the demand curve will shift rightward. 7) Opportunity cost means the A) accounting cost minus the marginal cost. A) accounting cost minus the marginal benefit C)alternative forgone D) monetary costs of an activity. 8) When economic growth occurs, the A) economy moves along its production possibilities frontier. B) production possibilities frontier shifts outward. C) production possibilities frontier becomes steeper. D) production possibilities frontier shifts cutward but no longer limits the amount that can be produced. 9) When there is a surplus in the market, the quantity sold is A) equal to the quantity supplied. B) equal to the quantity demanded. C) less than the quantity demanded. D) greater than the quantity bought 10) Joe pays 8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call A) a relative price. B) an opportunity price C) an indexed price. D) a money price. 11) Marginal cost curves slope A) upward because of increasing opportunity cost. B) upward because of decreasing cost. C) downward because of increasing opportunity cost. D) downward because of decreasing opportunity cost. 12) An inducement to take a particular action is called A) the marginal benefit. B) the marginal cost. C) opportunity cost. D) an incentive 13) The loss of the highest-valued alternative defines the concept of A) marginal benefit. B scarcity. C) entrepreneurship. D)opportunity cost 14) Markets are best defined as A) arrangements where buyers and sellers get together to buy and sell. B) specific geographic locations where people get together to buy and sell. C) hypothetical constructs used to analyze how people form their tastes and preferences. D) places where people can inspect goods and services carefully 15) Which of the following is CORRECT? Factors of production are A) land, labor, the price system, and capital. B) the inputs used to produce goods and services. C) the fundamental source of abundance. D) only land and labor