Midterm_May22_-Answers-A

Midterm_May22_-Answers-A - ECO1104 1X MID-TERM EXAM...

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ECO1104 1X MID-TERM EXAM Tuesday, May. 22 nd 17:40- 19:30 Location: MCD 146 Instructor: Young Cheol Jung Duration: 110 Min. INSTRUCTIONS: 1. The exam consists of 70 multiple choice questions. 2. This exam is printed double sided. 3. Put your all stuffs below your chair and remove all head gear. 4. Keep your student ID visible at all times. 5. Programmable calculators, pocket computers and portable music devices are prohibited during the exam. 6. Please look at the blackboard from time to time for possible corrections to the exam. 7. If you need more space to write answers, a signed blank sheet will be provided. 8. Make sure you have signed the attendance sheet before leaving. GOOD LUCK
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1. The adage, "There is no such thing as a free lunch," is used to illustrate the concept of a. tradeoffs. b. scarcity. c. productivity. d. efficiency. (A ) 2. Economists consider normative statements to be a. descriptive, making a claim about how the world is. b. statements about the normal condition of the world. c. prescriptive, making a claim about how the world ought to be. d. statements which establish production goals for the economy. (C ) 3. If an economist develops a theory about international trade based on the assumption that there are only two countries and two goods, a. the theory can be useful only in situations involving two countries and two goods. b. it is a total waste of time, since the actual world has many countries trading many goods. c. the theory can be useful in helping economists understand the complex world of international trade involving many countries and many goods. d. the theory can be useful in the classroom, but has no use in the real world. (C ) 4. Which of the following definitions is not correct? a. Tax incidence is who bears the burden of a tax. b. Willingness to pay is the maximum amount that a buyer will pay for a good. c. A binding price floor is when the price floor is below the equilibrium price. d. Producer surplus= Amount sellers receive – Cost to sellers (C ) Figure 1 5. Refer to Figure 1 . The economy can produce at which point or points? a. A, B, D, E b. B, D, E c. D, C d. D (B )
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6. Which of the following is the best statement about markets? a. Markets are usually a good way to organize economic activity. b. Markets are usually inferior to central planning as a way to organize economic activity. c. Markets fail and are therefore not an acceptable way to organize economic activity. d. Markets are a good way to organize economic activity in developed nations, but not in less developed nations. (A ) 7. Suppose that a worker in Radioland can produce either 4 radios or 1 television per year, and a worker in Teeveeland can produce either 2 radios or 4 televisions per year. Each nation has 100 workers. Also suppose that each country completely specializes in producing the good for which it has a comparative advantage. If Radioland trades 100 radios to Teeveeland in exchange for 100 televisions each year, then each country's maximum consumption of new radios and televisions
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This note was uploaded on 01/07/2010 for the course ECO eco1104 taught by Professor Davidgray during the Fall '09 term at University of Ottawa.

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Midterm_May22_-Answers-A - ECO1104 1X MID-TERM EXAM...

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