midterm1 review questions

Principles of Macroeconomics

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Review Questions for Midterm 1 Econ 101, Lecture 4, Spring 2007 Professor Korinna K. Hansen TAs: Jonathan Thornhill, Kyoung Jin Choi, Woo Jin Choi and Jim Lin Use the graph below to answer the following question. 1) In the above Figure, which of the following is true? a) Point A is the most efficient b)Point B is the most efficient. c) Point C is unattainable. d) b) and c) are true Use this graph for the next question.
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2) If an economy operates at point A on the production possibilities curve shown in Figure above. a) it cannot increase its output of food without having to give up some clothing. b) it cannot increase its output of clothing without having to give up some food. c) it is using its resources efficiently. d) all of the above are true. Haircuts T-shirts 3. The picture above gives you the production possibility frontier (PPF) for t-shirts and haircuts in an economy. What is the explanation for the over time shift in the PPF? a). Higher demand for t-shirts in the economy. b). Technological advances in the t-shirt industry. c). Technological advances in the haircut industry. d). Unemployment and Inefficiencies in the haircut industry. Use the following information to answer the next two questions:
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A carpenter and an electrician live next door to each other. Each has a house that is in the same need of repairs. In each house some carpentry work needs to be done and some electrical work. The amount of repairs needed is identical. The carpenter can complete the carpentry work in either house in 1 day and the electrical work in 2 days. The electrician can complete the carpentry work in either house in 3 days and the electrical work in 4 days. (Hint: Note that in this example large numbers imply less productivity. That is the reverse of what we have seen in other similar problems and makes it a harder problem). 4) For the carpenter, the opportunity cost for carpentry is ____________ of electrical work and the opportunity cost for electrical work is ___________ of carpentry a) 2; 1/2 b) 1/2; 2 c) 1/2; 1/2 d) 2; 2 5) For the electrician, the opportunity cost for carpentry is ____________ of electrical work and the opportunity cost for electrical work is ______________ of carpentry. a) 3/4; 4/3 b) 4/3; 3/4 c) 3/4; 3/4 d) 4/3; 4/3
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Use the following information to answer the next three questions: Wheat A C B E F D Rice 6) In this economy that produces wheat and rice production is most efficient in points: a) C b) F and E c) D d) A and B and D 7) As the economy moves from point D to B to A the opportunity cost of wheat is: a) increasing. b) decreasing.
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This homework help was uploaded on 02/01/2008 for the course ECON 101 taught by Professor Hansen during the Spring '07 term at Wisconsin.

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midterm1 review questions - Review Questions for Midterm 1...

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