sample final exam

sample final exam - ARE 201 Spring 2009 Sample Final Exam...

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1 ARE 201 Spring 2009 Sample Final Exam Topics: Chapters 1—11, 19-20 MULTIPLE CHOICE (2 points each) 1. When the government redistributes income from the rich to the poor, a. efficiency is improved, but equity is not. b. both rich people and poor people benefit directly. c. people work less and produce fewer goods and services. d. rich people consume fewer goods , but poor people consume more goods, resulting in no real change. 2. Suppose that the average income of a Kenyan is higher than the average income of a South African. You might conclude that a. South African firms are faced with stricter government regulations than Kenyan firms. b. total income is divided among fewer workers in Kenya since it has a smaller labor force than South Africa. c. Kenya’s climate allows for longer growing seasons and therefore Kenya can produce large quantities of grain. d. productivity in Kenya is higher than in South Africa. 3. The art of scientific thinking includes a. knowing how the major organs of the human body work. b. understanding every scientific field—physics, biology and economics. c. deciding which assumptions to make. d. being able to mathematically express natural forces. 4. You know an economist has crossed the line from scientist to policy adviser when he a. explains just the facts. b. makes positive statements. c. makes normative statements. d. can’t reach a conclusion. Labor Hours Needed to Make 1 Pound of: Pounds produced in 40 hours: Meat Potatoes Meat Potatoes Farmer 8 2 5 20 Rancher 4 5 10 8 5. According to the table, the opportunity cost of 1 pound of meat for the farmer is a. 1/4 hour of labor. b. 4 hours of labor. c. 4 pounds of potatoes. d. 1/4 pound of potatoes. 6. Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in cars. If these two countries specialize and trade according to their comparative advantage
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2 a. all individuals in both countries will benefit. b. Greece will specialize in and export cars. c. Germany will produce more cars than in the absence of trade. d. Germany will produce more fish than in the absence of trade. 7. A market is a a. group of demanders and suppliers of a particular good or service. b. group of people with common desires. c. place where only sellers meet. d. place where only buyers come together. 8. An example of complementary goods would be a. hamburgers and hot dogs. b. lawnmowers and automobiles. c. hamburgers and fries. d. Coke and Pepsi. 9. When the price of kittens was $25 each, the pet shop sold 20 per month. When they raised the price to $35 each, they sold 14 per month. The elasticity of demand for kittens would be a. 1.66. b.
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This note was uploaded on 10/22/2009 for the course ARE 201 taught by Professor Eryuruk during the Fall '08 term at N.C. State.

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sample final exam - ARE 201 Spring 2009 Sample Final Exam...

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