Although water is very abundant in most places, it is scarce because:
A) it has no alternative uses.
B) it has two or more alternative uses.
C) it is a free good and not expensive.
D) scarce goods in general are not all that costly.
Ans: B) it has two or more alternative uses.
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The following graph depicts demand. 
The price elasticity of demand at point D is:
A. 2/5. B. 2. C. 1/2. D. 5/2.
In the period 1960–95, the federal government
(a) played, in general, a much larger role in the economy during this period than prior to World War II. (b) played a small role in the economy, similar to the 1920s. (c) eliminated most of the major programs for the federal government that were established by the New Deal in the 1930s, while state and local governments began to play a larger role in the economy. (d) played a large role in defense spending but followed basically a laissez-faire policy toward the rest of the economy.
Consider a firm that has just built a plant, which cost $1,000. Each worker costs $5.00 per hour. Based on this information, fill in the table below
Number of Worker Hours Output Marginal Product Fixed Cost Variable Cost Total Cost Marginal Cost Average Variable Cost Average Total Cost 0 0 -- -- -- 50 400 100 900 150 1300 200 1600 250 1800 300 1900 350 1950
A world-renowned brain surgeon can type twice as fast as her secretarial assistant. Which of the following statements is true in this situation?
a. The secretary has an absolute advantage in typing. b. The surgeon should do her own typing to save money. c. The surgeon should fire the assistant and work weekends and evenings to stay up on her typing. d. The surgeon should spend her time doing brain surgery and allow her secretary to do the typing because the secretary has a comparative advantage in typing. e. The surgeon should spend her time doing brain surgery and allow her secretary to do the typing because the surgeon has a comparative advantage in typing.