Question

Luke is shocked by the price that Obi-Wan agrees on for passage to Alderon. The transaction between Obi-Wan and Hans Solo is an example of:

Question 6 options:

	A mutually beneficial exchange.
	A bad deal
	Deceptive sales practices on the part of Hans Solo.
	An involuntary exchange.

The field of economics is concerned with:

Question 7 options:

	money.
	determining the distribution of income in society.
	the allocation of scarce resources among competing uses.
	determining the level of output for all goods.

A savings account pays an interest rate of 6%, compounded annually. A deposit of $1,000 will have grown to_______a year from now.

Question 8 options:

	$1,006
	$1,000.60
	$1,060
	$1,600

Kelly decides to stop studying for a math test and spend the last 1/2 hour of study time working on her public speaking presentation. This vignette best illustrates the economic principle that:

Question 9 options:

	resources should be used efficiently.
	decisions are made at the margin (marginal analysis)
	markets have an innate tendency to move towards equilibrium.
	people respond to incentives.

In a recession spending is ______ than the productive capacity of the economy. According to Paul Krugman (who is a Keynesian) the government should _____ taxes and _______ government spending.

Question 10 options:

	less than, increase, cut
	more than, cut, increase
	more than, cut, cut
	less than, cut, increase

Answer 1

6. Luke is shocked since he believe the price paid by Obi-Wan to Hans Solo is very high or overpriced. Thus, it is a bad deal.

7. Field of economics is concerned with

The allocation of scarce resources among competing uses.

8. Amount, A = $ 1,000

Interest rate, i= 6%

Time, n = 1 year

$\LARGE FV = A(1+i)^n$

$\LARGE FV = \$ 1,000(1+0.06)^1$

$\LARGE FV = \$ 1,060$

9. Since, she stopped studying for maths test and devoted the time preparing her public speaking presentation. So, she thought that the presentation is also important along with the test.

Therefore,

She made decision at margin.

Decisions are made at the margin(Marginal analysis).

10. Keynesian economist advocate government spending and they feel by increasing the government spending and lowering the tax the economy can be pulled out of depression.

Last option is correct.

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