practicequestions1fall2004

practicequestions1fall2004 - Econ 102 Fall 2004 Practice...

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Econ 102 Fall 2004 Practice Questions 1 Readings: Chapter 1, Mathematical Appendix at end of Chapter 1, Chapter 2 Concepts: Opportunity cost Production Possibilities Frontiers (PPF) Absolute advantage Comparative advantage I. Multiple Choices: The country of Myland can use its resources to produce either Oil or Fish according to the PPF in the picture below (numbers represent pounds): 1) Assume that Myland is producing at point A. What is the opportunity cost, measured in pounds of fish, of moving to point B? a. 200 pounds of fish. b. 0 pounds of fish. c. 100 pound of fish. d. 2 pounds of fish. 2) Now assume that Myland is producing at point C. In this case, what is the opportunity cost, measured in pounds of fish, of moving to point B? a. 200 pounds of fish. 100 200 300 B Fish Oil 300 A C
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b. 0 pounds of fish. c. 100 pounds of fish. d. 2 pounds of fish. 3) Which of the following statements is NOT TRUE about the employment of resources in the country of Myland?: a. Producing at point C is inefficient. b. Producing at either point A or B is efficient. c. At point A, Myland is employing all of its available resources. d.
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practicequestions1fall2004 - Econ 102 Fall 2004 Practice...

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