3.3 Key

3.3 Key - Review Questions for Final Exam 1 In one week Jennifer can bake 200 rum cakes or 500 dozen chocolate chip cookies Dan can bake 300 rum

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Review Questions for Final Exam 1. In one week, Jennifer can bake 200 rum cakes or 500 dozen chocolate chip cookies. Dan can bake 300 rum cakes or 600 dozen chocolate chip cookies per week. If Dan and Jennifer engaged in trading the baking outputs, Dan would specialize in _____ and the price ratio would be somewhere in between ____ dozen cookies for one rum cake. a. Cookies; 300 and 500 b. Cookies; 3 and 5 c. Cookies; 2 and 2.5 d. Rum cakes; 2 and 2.5 e. Rum cakes; 3 and 6 2. Table 1 provides cost data (not productivity) for France and Denmark. The data suggest that the two countries could both benefit from trade if: a. France subsidized its wine industry b. Denmark specialized in wine and France specialized in cheese c. France specialized in wine and Denmark specialized in cheese d. Denmark subsidized its wine industry e. None of the above Use Figure 2 to answer questions 3 – 6. 3. In equilibrium, consumer surplus is equal to: a. 30 b. 45 c. 9000 d. 4500 e. 350 4. A price ceiling of \$20 per unit would cause a: a. shortage of 30 b. shortage of 150 c. surplus of 150 d. surplus of 20 5. Under a price ceiling of \$20 per unit, subtle market forces would tend to drive the “real” price to:

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This note was uploaded on 05/09/2008 for the course ECN 212 taught by Professor Nancy during the Fall '07 term at ASU.

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3.3 Key - Review Questions for Final Exam 1 In one week Jennifer can bake 200 rum cakes or 500 dozen chocolate chip cookies Dan can bake 300 rum

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