ECON 203 test1

ECON 203 test1 - ID A Econ 203(Spring 2007 Exam 1 Multiple...

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ID: A 1 Econ 203 (Spring 2007) Exam 1 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 1. Suppose that in 1996, 12 million cars were purchased at $15,000 each, while in 1997, 14 million cars were purchased at $12,000 each. What might have caused this change? a. The price of airplane tickets (a substitute for cars) fell c. The price of airplane tickets (a substitute for cars) rose b. Automobile manufacturing technology increased (cheaper production) d. Automobile manufacturing technology decreased (more expensive production) Exhibit 13-6 2. Refer to Exhibit 13-6. The opportunity cost of one unit of cheese for country A is _______. a. 1/2 units of wine. b. 2 units of wine. c. 10 units of wine. d. 2 units of cheese. e. None of the above 3. Refer to Exhibit 13-6. The opportunity cost of one unit of cheese for country B is _____. a. 1 unit of wine b. 5 units of cheese c. 10 units of cheese d. 30 units of wine e. 30 units of cheese
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ID: A 2 4. Refer to Exhibit 13-6. Which of the following is true? a. A has an absolute advantage in both cheese and wine. b. B has an absolute advantage in both cheese and wine. c. A has an absolute advantage in cheese, and B has a comparative advantage in cheese. d. A has an absolute advantage in wine, and A has a comparative advantage in wine. e. More than one of the above is correct. 5. Refer to Exhibit 13-6. Which of the following is true? a. A has a comparative advantage in both cheese and wine. b. B has a comparative advantage in both cheese and wine. c. A has a comparative advantage in cheese, and B has a comparative advantage in wine. d. B has a comparative advantage in cheese, and A has a comparative advantage in wine. e. None of the above 6. Consider two straight-line PPFs. They have the same vertical intercept, but curve I is flatter than curve II. The opportunity cost of producing the good on the horizontal axis a. is greater along curve I. b. is greater along curve II. c. is the same along both curves. d. cannot be compared for the two curves without more information. Exhibit 3-1 7. Refer to Exhibit 3-1. At a price of $6 there is a a. shortage of 100 units. b. surplus of 100 units. c. surplus of 200 units. d. shortage of 150 units. e. shortage of 200 units. 8. In the “factors of production” market (in the circular-flow diagram), households a. are sellers and firms are buyers. b. are buyers and firms are sellers. c. and firms are both buyers. d. and firms are both sellers.
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ID: A 3 Exhibit 3-2 9. Refer to Exhibit 3-2. Which of the following would result in a movement from point A on D 1 to point B on D 2 ? a. a decrease in the price of a substitute b. an increase in the price of a complement c. an improvement in production technology d. an increase in the number of buyers e. More than one of the above is correct. 10.
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ECON 203 test1 - ID A Econ 203(Spring 2007 Exam 1 Multiple...

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