econ002springexam1ansi

econ002springexam1ansi - Name _ ECON 002 Exam #1 Please...

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Name ____________________________________________ ECON 002 Exam #1 Please answer the multiple choice questions on the multiple choice answer sheet provided. Answer the problems in the space provided on the exam. Turn in the exam and the multiple choice answer sheet when you are finished. Feel free to write on the exam. Good Luck! Multiple Choice (Each Worth 3.6 points) 1. Which of the following is a positive (rather than a normative) statement? A) The government should increase the number of welfare programs to lessen the number of families living in poverty. B) The tallest player on a basketball team should play every minute of the game, since he or she can get the most blocks and rebounds. C) On average, people with more years of education have a higher income. D) Every student should take courses in economics. Students should know the concepts of marginal analysis, opportunity costs, and tradeoffs in order to make good decisions and understand society. 2. Which of the following topics typifies microeconomics as opposed to macroeconomics? A) An individual's decision on which goods to buy with his or her income. B) The effect of changes in household saving rates on the growth rate of national income. C) The impact of faster money growth on the rate of inflation. D) A comparison of alternative tax policies and their respective impacts on the rate of the nation’s economic growth 3. Points inside the PPF are all A) unattainable and use fully employed resources. B) attainable and use fully employed resources. C) unattainable and have some unemployed resources. D) attainable and have some unemployed resources. 4. Production is efficient if the economy is producing at a point A) on the production possibilities frontier. B) inside or outside the production possibilities frontier. C) on or inside the production possibilities frontier. D) inside the production possibilities frontier.
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Refer to the following diagram to answer questions #5 and #6. 5. Suppose this economy is currently producing 10 million pounds of food and 7 million computers (point A). In this case, the opportunity cost of producing 1 million additional computers (that is, shifting production to point B) is: A) 1 million pounds of food. B) 2 million pounds of food. C) 3 million pounds of food. D) 5 million pounds of food. 6. As the quantity of computers produced increases, the opportunity cost of producing additional computers A) stays the same. B) decreases. C) increases. D) first increases, then decreases. 7. If an economy is producing efficiently, then A) there is no way to produce more of one good without producing less of another good. B) it is possible to produce more of both goods without increasing the quantities of resources that
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This note was uploaded on 04/02/2008 for the course ECON 002 taught by Professor Mcleod,markpehlivan,ayseozg during the Spring '08 term at Penn State.

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econ002springexam1ansi - Name _ ECON 002 Exam #1 Please...

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