11. If a country allows free trade and its domestic price for a
given good is lower than the world price, then it will import that
good.
12. If a consumer places a value of $20 on a particular good and
if the price of the good is $25, then the
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a.
consumer has consumer surplus of $5 if he buys the good.
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b.
consumer does not purchase the good.
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c.
price of the good will rise due to market forces.
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d.
market is out of equilibrium
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13. If the price elasticity of demand is equal to 1,
then demand is unit elastic.
15. Suppose a gardener produces both tomatoes and squash in his
garden. If the opportunity cost of one bushel of squash is 2/5
bushel of tomatoes, then the opportunity cost of 1 bushel of
tomatoes is
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b.
5/2 bushels of squash.
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16. Rational people make decisions at the margin by
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a.
following marginal traditions.
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b.
behaving in a random fashion.
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c.
thinking in black-and-white terms.
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d.
comparing marginal costs and marginal benefits.
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