6. Marginal analysis studies how individuals decide: A) to live on the margin of

Question

6. Marginal analysis studies how individuals decide: A) to live on the margin of society. 8) whether to do a bit more of an activity versus a bit less of it. whether to go to college. how much down payment to make when buying stocks. D) 7. An economic model: A) B) often loads to faulty conclusions. O) allows nothing to chainge in the economic situation that is being described. D) is a simplified version of reality used to understand real-world economic conditions. 8. Consider a production possibility frontier for Iraq. If in 2014 Iraq's resources are not boing fully wtilized, Iraq will be somewhere of its production possibility frontier A) inside B) outside O) near the hottom D) near the top 9. All points inside the prodaction possibility frontier represent A) efficient prodaction points B) inefficient production points. O infoasible production points D) economic growth. The market for corn in Kansas is considered to be competitive. This means there are This buyers and sellers of com in Kansas. sellers ofcom in Kanse A) many few many, few B few, many many; many D sew; few 11. The law of demand states that other things equal, as the price: A) increases, the quantity demanded will increase B) decreases, the demand curve will shift to the right. increases, demand will decrease D) increases, the quantity demanded will decrease. Page 2

Explanation / Answer

6> b

Marginal analysis is concerned with a bit less or more.

7> d

Economic models are much simpler than the real life counterpart but if gives us an understanding of the reality.

8> inside

If resources are not used, it should be inside the PPF

9> B

They are inefficient points as they can be made using lesser resources than present.

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