examIa - ECON 2306 Principles of Microeconomics Exam I...

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ECON 2306 – Principles of Microeconomics Exam I -- Spring 2001 – Version A - KEY 1. In a market-based economy, a. there are reduced opportunity costs. 2. Fred and Ann are both given free tickets to see a movie. Both decide to see the same movie. We know that b. both bear an opportunity cost of seeing the movie because they could have done other things instead of see the movie. 3. Bill Bonecrusher graduates from college with a choice of playing professional football at $2 million a year or coaching for $50,000 a year. He decides to play football, but eight years later, though he could continue to play football at $2 million a year, he quits football to make movies for $3 million a year. His opportunity cost of playing football at graduation was __________ and eight years later the opportunity cost of making movies was __________. d. $50,000; $2 million 4. "As interest rates fall, people spend more." A graph showing the relationship between interest rates and spending would have d. Both answers A and C are correct. 5. The simple circular flow model shows that c. households are on the supply side of the resource market and on the demand side of the product market. 6. A person removes themselves from the labor force and goes to college to become an engineer. This is an example of d. an investment in human capital. 7. In the above table, the production of 3 pizzas and 80 cases of soda is a. impossible unless more resources become available or technology improves. 8. As a student of economics, when you speak of scarcity, you are referring to b. the inability of society to satisfy all human wants because of limited resources. 9. The production possibility frontier represents b. the maximum levels of production that can be attained. 10. In the production of goods and services, tradeoffs exist because d. society has only a limited amount of productive resources.
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11. The above table shows data on two variables. If these data were graphed, the slope of the line would be
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examIa - ECON 2306 Principles of Microeconomics Exam I...

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