EC1301%20MidTerm%20Exam_2 - EC1301 NATIONAL UNIVERSITY OF...

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EC1301 NATIONAL UNIVERSITY OF SINGAPORE EC1301 PRINCIPLES OF ECONOMICS (SEMESTER I : AY2008-2009) Mid-Term Exam 29 th September, 2008 Time Allowed : 1 Hour Do not turn over this cover page until told to do so INSTRUCTIONS TO CANDIDATES 1. Place your NUS ID Card at the top right-hand corner of your desk. 2. This examination paper contains FORTY (40) questions. 3. For each question, choose the one alternative that best completes the statement or answers the question. 4. Answer all questions. 5. This is a CLOSED BOOK examination.
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EC1301 2 1. For a given question to be an economic question, it would need to involve A) explicit prices B) making a choice C) limited resources D) all of the above E) B and C 2. Based on the principle of opportunity cost, Jim decides to see a movie that costs $10 for the ticket. After the movie, he says to one of his friends that the movie was not worth it. The reason could be either one of the following: A) Jim was not rational. B) Jim underestimated the cost of seeing the movie. C) Jim overestimated the benefits of seeing the movie. D) All of the above E) B and C Use the following to answer Questions 3 and 4: Crusoe and Friday are the only two persons on an island, completely cut off from the outside world, living on fish and coconuts only. They trade with each other freely, i.e., they cooperate in the production and consumption of the two goods. Each day, the combinations of fish and coconuts each is able to produce are as follows: Crusoe Friday Output Per Day Output Per Day Coconuts Fish Coconuts Fish 02 4 06 21 8 24 41 2 42 66 6 0 80 3. In the production of coconuts and fish, Crusoe has the comparative advantage in A) coconuts B) fish C) both coconuts and fish D) None of the above 4. If both Crusoe and Friday have 4 coconuts each (after trading), it is likely that Crusoe has ____ fish. A) 15 B) 16 C) 17 D) any one of the above E) none of the above Use the following to answer Questions 5 and 6: Crusoe and Friday are the only two persons on an island, completely cut off from the outside world, living on fish and coconuts only. They trade with each other freely, i.e., they cooperate in the production and consumption of the two goods. Each day, the combinations of fish and coconuts each is able to produce are as follows:
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EC1301 3 Crusoe Friday Output Per Day Output Per Day Coconuts Fish Coconuts Fish 01 2 0 28 44 46 60 5. If the total output (by Crusoe and Friday) of coconuts is 6 per day, then the marginal cost of coconut is ___ fish. A) 0 B) 1 C) 2 D) 3 E) 4 6. If there is a voluntary exchange of coconuts for fish, and Crusoe and Friday each consumes 3 coconuts per day, it is possible that between Crusoe and Friday, 1 coconut is exchanged for ______ fish. A) 1 B) 1.5 C) 2 D) 2.5 E) 3 7. Jim notes that an electronics store is offering a flat $20 off all prices in the store. He reasons that if he wants to buy something with a price of $50 that is a good offer, since the discount amounts to 40%; but if he wants to buy something with a price of $500 it is not a good offer, as the discount will only be 4%. This is a proper application of the principle of opportunity cost.
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This note was uploaded on 02/27/2009 for the course ECONOMICS ec1301 taught by Professor Roland during the Spring '09 term at National University of Singapore.

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EC1301%20MidTerm%20Exam_2 - EC1301 NATIONAL UNIVERSITY OF...

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