Refer to Figure 1-2. Calculate the area of the tria

10) Refer to Figure 1-2.  Calculate the area of the triangle A. a.        $6.3 million

b.     $3.15 million c. $8.4 million d. $2.1 million

11) You explain to your friend Haslina, who runs a catering service called “Meals in a Zip,” about an economic theory that asserts that consumers will pur- chase less of a product at higher price than they will at lower prices.  She contends that the theory is incorrect because over the past two years she has raised the price of her catered meals and yet has seen a brisk increase

in sales. How would you respond to Haslina?

a.   I will explain to her that there are some omitted variables that have contrib- uted to an increase in her sales such as changes in income.

b.     Haslina is making the mistake of assuming that correlation implies causation. c.        I will explain to her that she confusing positive economic analysis with norma-

tive economic analysis.

d.     Haslina is right; she has evidence to back her claim. The theory must be false.

12) In a production possibilities frontier model, a point inside the frontier is

a.   inefficient.  Maximum output is not being obtained from available resources. b.         allocatively efficient.

c.    allocatively inefficient. d.         productively efficient