If two goods, J and K, are complements, then which of the following statements is FALSE?

If two goods, J and K, are complements, then which of the following statements is FALSE?
 
  A) They are consumed together.
  B) An increase in the price of J causes the demand for K to rise.
  C) When the quantity demanded of J increases, the demand for K increases.
  D) A decrease in the price of K causes an increase in the demand for J.

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Ques. 2

Eight years ago you purchased an asset for 100,000 that has yielded a nominal capital gain of 30,000. If you sold the asset today, your inflation-adjusted capital gains would be zero due to inflation over the last eight years.
 
  The capital gains tax is 28 percent. If you sold the asset today your tax liability would be A) zero.
  B) 28,000.
  C) 8,400.
  D) cannot be determined without more information.

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Ques. 3

Refer to the above figures. A negative externality exists that has not been corrected. Price and quantity will be
 
  A) P1 and Q1.
  B) P2 and Q2.
  C) P3 and Q3.
  D) P4 and Q4.

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Ques. 4

Both the social sciences and the natural sciences employ ________ to help them understand the world around them.
 
  A) models
  B) designs
  C) traditional thinking
  D) implications

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Ques. 5

In the above figure, the farmer faces a trade-off between beans and wheat equal to
 
  A) one-to-one.
  B) three-to-one.
  C) one-to-two.
  D) one-to-four.

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Ques. 6

We cannot predict the effect on the equilibrium quantity, but know that the market clearing price will increase when
 
  A) supply decreases and at the same time demand increases.
  B) supply increases and demand increases simultaneously.
  C) supply and demand decreases simultaneously.
  D) supply and demand increases simultaneously.

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Ques. 7

Refer to the above figures. Which of the panels would be consistent with the situation in which external benefits exist?
 
  A) Panel 1
  B) Panel 2
  C) Panels 1 and 2
  D) neither panel

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Ques. 8

Suppose a concert by Lady Gaga and a basketball game played by the L.A. Lakers are substitutes, then which of the following is TRUE?
 
  A) If the price of a ticket to a Lakers game increases, then the demand for Lady Gaga tickets will fall.
  B) If the price of a ticket to a Lakers game decreases, the quantity of Lakers tickets demanded will increase.
  C) If the price of a ticket to a Lakers game increases, then the demand for Lady Gaga tickets will remain unchanged.
  D) The price of a ticket to a Lakers game will always equal the price of a ticket to a Lady Gaga concert.

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Ques. 9

Refer to the above figure. A farmer has 50 acres of land on which to grow wheat or beans. An acre of land yields 400 bushels of beans or 800 bushels of wheat.
 
  Which of the following is a possible combination of beans and wheat that can be grown, assuming the land is farmed efficiently? A) 30,000 bushels of each
  B) 15,000 bushels of beans and 10,000 bushels of wheat
  C) 25,000 bushels of beans and 25,000 bushels of wheat
  D) 20,000 bushels of beans and 40,000 bushels of wheat

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Ques. 10

Economic growth may understate changes in standards of living if
 
  A) the growth is accompanied by increasing congestion.
  B) leisure time is also increasing.
  C) the types of jobs generated feelings of alienation.
  D) deflation is taking place.

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Ques. 11

Economics is an empirical science, which means that economists
 
  A) must use laboratory experiments to test their theories.
  B) evaluate a model or theory by whether its assumptions are consistent with the real world.
  C) try to prove their models are true by referring to logic.
  D) look for evidence to determine whether the model is useful or not.