First Midterm with answers 9-28-2007

First Midterm with - 304K Introduction to Microeconomics unique 34220 Olivier Giovannoni 1 Answer on the scantron sheets Don't forget your EID and

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304K: Introduction to Microeconomics // unique# 34220 // Olivier Giovannoni Midterm exam 1 1 - Answer on the scantron sheets. Don't forget your EID and make sure to bubble up appropriately. 2 - Test duration: 45 minutes for 40 questions. 3 - This is about twice as much time per question than you had during the quizzes. Here response accuracy is what is being tested, not so much speed. So think twice. 4 - This test counts for 20% of the total grade for this class 5 - The grades will be posted by Monday and an answer sheet will be posted later tonight. Questions with the lowest correct response rates will be commented in class Monday - for further questions please use the office hours. 6 - When you are done, please give the scantrons (not this question sheet) to the TAs on your way to the exit. 7 - Remain considerate of the people still working. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If production point of two goods is inside the production possibilities frontier 1) A) in order to produce more of one good, less of the other must be produced. B) production is inefficient. C) production is in the "unattainable" region. D) it is not possible to produce more of both goods 2) While producing on the production possibilities frontier, if additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be 2) A) bowed outward. B) a straight line. C) positively sloped. D) bowed inward. Point Production of X Production of Y a 0 40 b 4 36 c 8 28 d 12 16 e 16 0 3) Refer to the table above, which gives five points on a nation's PPF . As we increase the production of X , 3) A) the opportunity cost of each new unit of X increases. B) unemployment increases. C) the output of Y increases. D) the opportunity cost of each new unit of X decreases. 4) When we choose a particular option, we must give up alternative options. The highest - valued alternative forgone is the ________ of the option chosen. 4) A) comparative advantage B) opportunity cost C) nonmonetary cost D) absolute advantage 5) By definition, an inferior good is a 5) A) good for which demand decreases when income increases. B) good for which demand decreases when its price rises. C) want that is not expressed by demand. D) normal substitute good. 1
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6) As the opportunity cost of a good decreases, people buy 6) A) more of that good and also more of its complements. B) less of that good but more of its complements. C) less of that good and also less of its complements. D) more of that good but less of its complements. 7) Consider the PPF for office buildings and housing shown in the figure above. Which point in the diagram shows that resources to produce office buildings and housing are being misallocated, unused, or both? 7)
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This note was uploaded on 04/27/2008 for the course ECON 304K taught by Professor Ledyard during the Fall '08 term at University of Texas at Austin.

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First Midterm with - 304K Introduction to Microeconomics unique 34220 Olivier Giovannoni 1 Answer on the scantron sheets Don't forget your EID and

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