Econ 101 Winter 2008 Practice Exam

Econ 101 Winter 2008 Practice Exam - Name Chad Hogan...

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Name___________________________ Chad Hogan Winter 2008 PRACTICE First Exam Economics 101 The University of Michigan NOTES: 1. The actual exam will share the same format as this practice exam. 2. For each question, a correct answer is worth 5 points, no answer is worth 1 point, and an incorrect answer is worth 0 points. 3. Given that the exam has 30 questions, the maximum possible score is 150. 4. Given that each question has 5 possible answers, a wild guess will earn 1 point on average, the same number of points earned by providing no answer. Guessing only gives you a better return than leaving the question unanswered if you can eliminate at least one answer (in which case a guess will earn more than 1 point on average). 5. The use of calculators, cell phones, personal digital audio players, or any other electronic devices will not be permitted during the exam. 6. Have your UMID with you at all times during the exam. 7. Unless a question explicitly notes otherwise, assume that all supply and marginal cost curves slope upward and that all demand and marginal value curves slope downward.

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Page 2 1. ___ Farmer Brown, Farmer Grey, and Farmer Black are the only farmers in a small country. Each of them produces either bushels of wheat (W) or pounds (lbs) of soybeans (S). The three graphs below present the production possibility frontiers for these farmers. What is the marginal opportunity cost to society of the 42nd bushel of wheat produced? (a) 0.5 lbs of soybeans (b) 1.0 lb of soybeans (c) 1.5 lbs of soybeans (d) 2.0 lbs of soybeans (e) 3.0 lbs of soybeans 2. ___ Tom and Jerry produce milk and cheese. Each has 10 hours per day to devote to production. It takes Tom 5 minutes to produce a gallon of milk and 20 minutes to produce a pound of cheese. It takes Jerry 10 minutes to produce a gallon of milk and 30 minutes to produce a pound of cheese. Which of the following statements is true? (a) Jerry has the absolute advantage in cheese but not milk production. (b) Jerry has the absolute advantage in milk but not cheese production. (c) Tom has the comparative advantage in producing both goods. (d) Jerry has the comparative advantage in producing cheese. (e) Tom has an absolute advantage in producing neither good. W W W S S S 15 17 8 23 20 22 6 46 4 19 31 25 35 36 Brown Grey Black
Page 3 3. ___ Suppose that US farmers can produce 6 tons of wheat per hour or 4 tons of corn every hour. Canadian farmers can produce 5 tons of wheat every hour or 5 tons of corn every hour. Farmers in both countries work eight hours a day. The combined demand for wheat produced in the US and Canada is 60 tons per day. If this demand is satisfied in an efficient fashion, how much wheat should US farmers produce each day? (a)

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This test prep was uploaded on 04/21/2008 for the course ECON 101 taught by Professor Gerson during the Winter '08 term at University of Michigan.

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Econ 101 Winter 2008 Practice Exam - Name Chad Hogan...

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