Key for Midterm 1 Spring 2007

Key for Midterm 1 Spring 2007 - Economics 100 Key for...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Economics 100 – Key for Midterm 1 Spring 2007 Page 1 of 4 Question Answer Notes (3 points each for a total of 75 points) 1 C Scarcity is a situation of unlimited wants and limited resources. 2 D People must make choices when confronted with scarcity. 3 A Opportunity cost is your best alternative foregone. 4 E The vertical intercept is the value of P when Q = 0, which is 5. The slope is defined as the change in P / change in Q, which is 0.3. 5 B The income effects tells us that an increase in a relative price that makes the household worse with will lower his or demand for all economic goods and services. Therefore, students at CSU-LB would take less classes and buy less clothes. 6 D The capital market is where excess savings of households is transferred to firms for capital accumulation. The relative price in the capital market is the interest rate . See handout #1c. 7 E The U.S. opportunity cost of one more action film is 10 / 50 = 1 / 5 art films. 8 D The French opportunity cost of one more art film is 8 / 10 = 4 / 5 action films. 9 C The idea of comparative advantage says that each country should specialize in the production of the good that it produces at a lower opportunity cost.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/18/2008 for the course ECON 100 taught by Professor Kasilwal during the Spring '07 term at CSU Long Beach.

Page1 / 4

Key for Midterm 1 Spring 2007 - Economics 100 Key for...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online