Econ 211-Fall 2005 Final

Econ 211-Fall 2005 Final - Fall, 2005 Economics 211 Final...

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1 Economics 211 Fall, 2005 Final Exam Professor D. K. Benjamin Print and encode your name, student number, and quiz section number on the scoring sheet. If you fail to do these actions correctly, you will be penalized five points . Mark on the scoring sheet the correct answer to each question. There are fifty (repeat, 50 ) questions, each with only one correct answer. If you mark more than one answer to a question, you will receive zero credit. Go Tigers ! 1. If Larry is indifferent between (i) having a burger or (ii) having $7.50, then we would say that for Larry a burger a. has a use value to him of less than $7.50 b. is not a scarce good, because he is indifferent about it c. has a use value to him that is greater than $7.50 d. all of the above e. none of the above. 2. When we use the term gains from trade , we are referring to the fact that a. what one person necessarily loses by exchange, the other one gains b. suppliers are able to take advantage of consumers when they sell them goods. c. when I give something up in exchange, I gain something in return that is worth exactly as much to me as what I gave up d. voluntary trade creates wealth e. answers (a) and (c) are correct 3. The economically efficient level of safety occurs when a. the marginal cost of safety equals the marginal benefit of safety b. the ratio of Type I errors to Type II errors is minimized c. the total number of Type I and Type II errors is minimized d. fatalities are minimized e. both (c) and (d) are correct Questions 4 and 5 are based on the following information. Consider a world in which there are only two countries (Rudimenta and Elaborata), and two goods (sodas and jelly). Also suppose that (i) PPCs in both countries are straight lines; i.e., marginal costs of production are constant, and (ii) Rudimenta has a comparative advantage in producing sodas. 4. Suppose an inability to speak each other’s language prevents them from trading from one another. Which of the following statements is (are) true? a. sodas will be more expensive in Rudimenta than in Elaborata b. sodas will be less expensive in Rudimenta than in Elaborata c. jelly will be less expensive in Rudimenta than in Elaborata d. jelly will be more expensive in Rudimenta than in Elaborata e. both (b) and (d) are correct 5. Now suppose that residents of both countries wake up one morning and realize that their languages are identical except that all of the words in Rudimenta are spelled backwards from the way they are spelled in Elaborata. Thus, as long as they talk to each other backwards, the residents of the two countries can easily trade with one another. When trade thus begins between the two nations a. Rudimenta will export sodas and import jelly b. Elaborata will export sodas and import jelly c. Rudimenta will export jelly and import soda d. Rudimenta will export both sodas and jelly e. both (b) and (c) are correct
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2 Questions 6 through 8 are based on the following information: Consider the nations of England and Wales. Each is capable of producing fish and chips.
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This note was uploaded on 04/29/2008 for the course ECON 212 taught by Professor Lady during the Spring '07 term at Clemson.

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Econ 211-Fall 2005 Final - Fall, 2005 Economics 211 Final...

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