Exam1 Review Test - New (Spring 07) Eco 2023 Review Exam 1:...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
New (Spring 07) Eco 2023 Review Exam 1: Answers at the end of the exam. MULTIPLE CHOICE. Choose the alternative that best completes the statement or answers the question (in my opinion). 1) The ability of one person or nation to produce a good at a lower absolute cost than another is called a(n): A) comparative advantage. B) absolute advantage. C) specialization advantage. D) market advantage. Figure 4.8 2) Refer to Figure 4.8. Which of the following would be most likely to cause the demand for Dr. Pepper to shift from _D 0 to D? A) an increase in the price of Mr-Pipp, assuming Mr-Pipp is a substitute for Dr. Pepper. B) an increase in the price of corn chips, assuming that corn-chips and Dr. Pepper are complements C) a discovery by the FDA that Dr. Pepper has real medicinal value D) a decrease in the price of Dr. Pepper. 3) The price of computer chips used in the manufacture of personal computers has fallen significantly over the past 15 years. Over the same period consumer incomes and taste and preferences for electronic conviences has also increased. The fact that the real price of personal computers has decreased over this time period suggests: A) the government has been subsidizing computer manufacturers over this time period. B) the increase in supply from falling chip prices has been relatively larger than the increase in demand from changes in consumer incomes and tastes and preferences. C) the increase in supply from falling chip prices has been relatively smaller than the increase in demand from changes in consumer incomes and tastes and preferences. D) prices will always fall when supply increases regardless of changes in demand. Apples/hour Carrots/hour Willy 6 4 Blithe 3 1 Table 3.1 4) Based on the data in Table 3.1, if Willy and Blithe choose to specialize and trade, then: A) Blithe will specialize in carrots and trade carrots for apples. B) Willy will specialize in apples and trade apples for carrots. C) Willy will specialize in carrots and trade carrots for apples. D) None of the above; specialization and trade are not beneficial for Willy and Blithe. 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
New (Spring 07) Eco 2023 Review Exam 1: Answers at the end of the exam. 5) Consider two individuals, Willy and Blithe, who produce carrots and apples. Table 3.1 shows how much of each good Willy and Blithe can produce in one hour. Willy's opportunity cost of one apple is: A) 2/3 carrot. B) 4 carrots. C) 1 carrot. D) 6 carrots. 6) Based on the data in Table 3.1: A) Blithe should specialize in both goods. B) Willy should specialize in both goods. C) Willy should specialize in apples and trade for carrots. D) Willy should specialize in carrots and trade for apples. 7) Consider two individuals, Willy and Blithe, who produce carrots and apples. Table 3.1 shows how much of each good Willy and Blithe can produce in one hour. Blithe's opportunity cost of one apple is: A) 6 carrots. B) 1 carrot. C) 1/3 carrot. D) 4 carrots. 4.18
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 14

Exam1 Review Test - New (Spring 07) Eco 2023 Review Exam 1:...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online