5. Traffic congestion is an example of a ________.
(A)positive externality
(B)negative externality
(C)pecuniary externality
(D)free-rider problem

1. Suppose the prices of a pair of jeans, a shirt, and a tie are $30, $20, and $10, respectively. Which of the following statements is true in this context? (A)The opportunity cost of buying a pair of jeans is 2 ties. (B)The opportunity cost of buying a tie is 3 pairs of jeans. (C)The opportunity cost of buying a tie is 2 shirts. (D)The opportunity cost of buying a shirt is 2 ties.

2. Which of the following correctly describes incentives? (A)Incentives refer to the maximum price that a buyer is willing to pay for a good. (B)Incentives are rewards or penalties that motivate people to behave in a particular way. (C)Incentives are prices that are fixed by the government and not by market forces. (D)Incentives refer to the minimum price at which a seller is willing to sell a product.

3. The following figure depicts a nonlinear production possibilities curve.  Refer to the figure above. If the market economy moves from point A to point C, ________. (A)there is unemployment in the computer programs industry (B)the opportunity cost of producing an additional Web site increases (C)technological change has made the production of Web sites more efficient (D)society values Web sites more than computer programs  

4. The following figure shows the demand curve faced by a monopolist.Refer to the figure above. What is the quantity effect of a price reduction from $6 to $4?(A)$600(B)$800(C)$1,000(D)$1,200

6. A dominant strategy ________. (A)always results in equal payoffs to all the players in a game (B)always results in a zero payoff to the opponent (C)results in a high payoff irrespective of the strategy chosen by the other player (D)always results in a low payoff irrespective of the strategy chosen by the other player

7. Scenario: Your friend Joe and you decide to race your new cars. However, both of you are caught speeding by a police patrol. The matrix below shows the respective payoffs for each choice of actions. The first number listed in each cell is the payoff to the row player, and the second number listed is the payoff to the column player.Refer to the scenario above. Which of the following strategy combinations denotes the dominant strategyequilibrium in this case?(A)(Bribe, Bribe)(B)(Bribe, Do not bribe)(C)(Do not bribe, Bribe)(D)(Do not bribe, Do not bribe)

8. Asymmetric information in a market can lead to ________. (A)market failure (B)the moral hazard problem (C)the free-rider problem (D)the tragedy of the commons

9. Jane donates time and money to charity because she values helping others. This is an example of ________. (A)pure altruism (B)rationalism (C)impure altruism (D)liberalism

10. Which of the following best describes a production possibilities curve? (A)How much of one good an economy can produce if they forgo production of another good (B)The rate at which an economy can trade production of one good for another (C)The total amount of goods an economy can produce (D)A relationship showing the maximum production of one good for a given level of production of another good  

11. The average income per capita in a country in its own currency is 75,000 units. If U.S. $1 is worth 20 units of its currency, the income per capita in the country in dollars is ________. (A)$1,850 (B)$2,500 (C)$3,750 (D)$15,000