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practiceexam1ans - ECON 002 Practice Exam #1 1. Which of...

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ECON 002 Practice Exam #1 1. Which of the following is a positive statement? A) Papa John’s should lower the price of their pizza to encourage more students to purchase it. B) The United States should fight inflation at the expense of unemployment. C) Given their positive impact on wages, labor unions ought to be encouraged. D) A 5% decrease in income leads to a 3% decrease in the consumption of orange juice. 2. The production possibilities frontier will shift outward as A) a result of a technological advancement. B) the economy employs more of its unemployed labor. C) a result of an increase in the economy's demand for output. D) a result of efficient utilization of productive resources. 3. If there are unused resources in an economy, for example, unemployed labor, A) the production possibilities frontier will shift inward. B) the economy is operating at a point on its production possibilities frontier. C) the production possibilities frontier will shift outward. D) the economy is producing at a point inside the production possibilities frontier. Refer to the following diagram to answer question #4. 4. The PPF shift shown in the above graph would best be explained by A) the discovery of a low cost energy source. B) the development of new car factory assembly line technology. C) the development of a new, and more effective, fertilizer for pear trees. D) an increase in oil prices. 5. A bowed out production possibilities frontier shows that the A) opportunity cost of a good is constant as more of it is produced. B) opportunity cost of a good decreases as more of it is produced. C) opportunity cost of a good increases as more of it is produced. D) opportunity cost relationship is linear.
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A) efficient but not attainable. B) efficient and attainable. C) inefficient but not attainable. D) inefficient and attainable. Refer to the following diagram to answer question #7. 7. The figure above shows the production possibilities frontier for a country. The opportunity cost of one additional gallon of milk when moving from point A to point B is A) 4 gallons of ice cream for a gallon of milk. B) 3 gallons of ice cream for a gallon of milk. C) 1 gallon of ice cream for a gallon of milk.
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practiceexam1ans - ECON 002 Practice Exam #1 1. Which of...

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