Mid1a_201_W02

Mid1a_201_W02 - Cal Poly Pomona, EC 201 - Bruce Brown NAME_...

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Cal Poly Pomona, EC 201 - Bruce Brown NAME_______________________________ Exam 1, February 4, 2002 (please clearly print your family name with all capital letters) - You may write on the exam; it will be returned. - You may use an ordinary language dictionary (not electronic or economics dictionary). Use of a calculator is also allowed, but can not be shared by students. You may leave when finished. - You may ask clarifying questions about definitions or wording of the questions. If the question regards definition of a term presented in this course, it will not be answered. - This exam has 50 questions, all of equal weight. Clearly fill in the bubble on your scantron form which corresponds to the best answer. No points are deducted for incorrect answers, so each of 50 questions should be marked with one answer. - You may leave when finished. Hand in both this exam and your scantron form. I. Multiple Choice – mark the best answer on your scantron form Use the above diagram for the following five questions: 1. The above PPF shows this economy can: a. produce both 25 guns and 40 butter in the same period. b. produce either 25 guns or 40 butter, but not 25 guns and 40 butter in the same period of time. c. produce 30 guns and 70 butter in the same period, if resources are used efficiently d. none of the above 2. What is the opportunity cost of an additional unit of butter on segment AB? a. 40 guns b. 25 guns c. 5 guns d. 8 guns e. 1/8 or .125 of a gun 3. What is the opportunity cost of an additional unit of butter on segment BC? a. 2 guns b. 1/2 (=.5) of a gun c. 60 guns d. 25 guns e. 40 guns 4 What is the opportunity cost of an additional gun on segment AB? a. 40 butter b. 25 butter c. 5 butter d. 8 butter e. 1/8 or .125 butter Butter Guns 40 60 70 30 25 15 A B C D
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5. As more butter is produced (moving from A to D), the opportunity cost of an additional unit of butter: a. decreases from 40 guns; to 25 guns; to 5 guns. b. decreases from 1.5 guns; to .5 gun; to .125 of a gun. c. increases from 5 guns; to 25 guns; to 40 guns d. increases from .125 of a gun; to .5 gun to 1.5 guns 6. Price of a plane ticket from New York to L.A. is $400 and the flight takes 5 hours. A bus ticket between the same two cities costs $100 and the ride takes 105 hours. Assuming non-monetary considerations are equal for the two alternatives, the opportunity cost of flying will exactly equal that of taking the bus if the individual’s time is worth. a) $ 20 per hour b) $ 4 per hour c) $ 3 per hour d) $ 1 per hour 7. When there are unemployed resources: a) the production possibilities curve shifts inward. b) the production possibilities curve shifts outward. c) the economy is operating at a point inside its production possibilities curve. d) the economy is operating at a point outside its production possibilities curve.
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This note was uploaded on 03/11/2008 for the course EC 201 taught by Professor Brown during the Winter '07 term at Cal Poly Pomona.

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Mid1a_201_W02 - Cal Poly Pomona, EC 201 - Bruce Brown NAME_...

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