Fall_2007_Exam_1_Review_Questions_key

Fall_2007_Exam_1_Review_Questions_key - Economics 201 Fall...

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Unformatted text preview: Economics 201 Fall 2007 Exam 1 Review Questions 1. Physical capital is used by economists to mean a) the education and training of the workforce. b) the physical space (warehouse) where production occurs c) goods that are used to help make other goods and services d) time allocated to producing goods and services e) financial backing 2. Human capital is used by economists to mean a) the education of the workforce. b) goods that are used to help make other goods. c) training and on the job experience. d) All of the above are human capital. e) Both a and c are correct. 3. Tradeoffs are required in any decision because wants are ______ while resources are _____. a) realistic; plentiful b) scarce; efficient c) unlimited; scarce d) within reason; abundant e) scarce; unlimited 4. Opportunity cost can best be defined as the a) cost of all alternatives given up when a decision is made. b) amount of money paid for something. c) amount of money paid for a decision, taking inflation into account. d) value of the best alternative given up when a decision is made. e) cost of searching for what you want. 5. Suppose that Ken spends 4 hours playing golf, paying green fees of $50, rather than working at his job that pays $10 hour. What is the economic cost of his decision to play golf? a) $90 b) $60 c) $50 d) $40 e) nothing, since he enjoys golf much more than working anyway. 6. Which of the graphs below shows Y increasing at a decreasing rate ? (A) Y X X Y X Y X Y A D B C 7. An economic model a) uses equations to understand normative economic phenomena b) often omits crucial elements c) simplifies reality in order to focus on crucial elements d) produces poor predictions since they include unrealistic assumptions e) can never be proven wrong 8. Which of the following issues is related to microeconomics rather than macroeconomics? a) the effect of changes in saving's rates on a country's productivity b) the effect of the North American Free Trade Agreement on the unemployment rate c) the effect of changes in tax rates on the rate of economic growth d) the effect of agricultural price supports on the market for cotton e) the effect of changes in interest rates on gross domestic product 9. "A compassionate and strong welfare program should have a higher priority than a strong national defense program." This is an example of a) an economic theory. b) a positive statement. c) microeconomics. d) a normative statement. e) an economic model Consider the following equation for the next three questions: Y = 15 + 3X 10. In the above equation, Y is the ________ and X is the _______. a) independent variable; dependent variable b) intercept variable; dependent variable c) slope; intercept variable d) dependent variable; independent variable e) independent variable; slope 11. From the equation above, we know that a) X and Y are negatively related....
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This note was uploaded on 04/18/2008 for the course ECON 201 taught by Professor Baker during the Fall '07 term at University of Tennessee.

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Fall_2007_Exam_1_Review_Questions_key - Economics 201 Fall...

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