Econ2105Test1 - 1. Suppose the state of Oklahoma decides to...

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1. Suppose the state of Oklahoma decides to produce only two goods—oil and football helmets. According to the production possibilities frontier, as oil production increases, the production of football helmets will: A) increase. B) not change. C) decrease at a decreasing rate. D) decrease. 2. If a hurricane is expected to hit a city in the coming days, then A) There is a downward movement along the demand curve of flashlights. B) There is an upward movement along the demand curve of flashlights. C) There is a right-ward shift of the demand curve of flashlights. D) There is a left-ward shift of the demand curve of flashlights. 3. Suppose you manage a corner grocery store. If peanut butter is an inferior good, what do you suppose would happen to the price and quantity of peanut butter as incomes fall during an economic recession? A) the price would increase and the quantity decrease B) the price and quantity would both increase C) the price and quantity would both decrease D) the price would decrease and the quantity increase Page 1
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Use the following to answer question 4: Figure: Demand for Videotapes 4. (Figure: Demand for Videotapes) A decrease in the price of movie tickets (a substitute) would result in a change illustrated by: A) the move from f to g in Panel A. B) the move from h to i in Panel B. C) the move from j to k in Panel C. D) the move from l to m in panel D. 5. An economy that has the lowest opportunity cost for producing a particular good is said to have a(n): A) absolute advantage. B) comparative advantage. C) production possibilities curve. D) increasing opportunity cost. Page 2
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6. After eating three slices of pizza, you decide to squeeze in one more piece. Your decision is an example of the economic principle called: A) opportunity-cost decision. B) people respond to incentives. C) equity decision. D) marginal decision. 7. Coworkers Yvonne and Rodney are trying to finish cleaning up the store by washing dishes and sweeping the floors. To finish both tasks as quickly as possible, they know that each of them should focus on just one task, but they don't know who should do what. To decide which coworker should wash dishes, Yvonne and Rodney should determine which one: A) has the absolute advantage in dishwashing. B) has the comparative advantage in dishwashing. C) has the largest production possibilities frontier in dishwashing. D) can complete the dishwashing in the least amount of time.
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This test prep was uploaded on 04/21/2008 for the course ECON 2105 taught by Professor Iacopetta during the Spring '08 term at Georgia Institute of Technology.

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Econ2105Test1 - 1. Suppose the state of Oklahoma decides to...

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