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practicefinalexamB

# practicefinalexamB - ECON 251 Practice Final Exam B(Based...

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ECON 251 Practice Final Exam B (Based on Fall 2008 final exam) Fall 2009 In a particular country, there are 2 people – Jimmy and Anna. They produce only bowling balls and shoelaces. Jimmy can produce 10 bowling balls a day or 30 shoelaces a day. Anna can produce 10 bowling balls or 5 shoelaces a day. 1. Using the information above, ________________ has the absolute advantage in the production of shoelaces, and _____________ has the comparative advantage in the production of shoelaces. a. Sally, Sally b. Jimmy, Bob c. Jimmy, Jimmy d. Bob, Anna 2. Based on the same information in the problem above, what is the slope of Anna’s production possibility curve if bowling ball production is measured on the x axis? a. 3 b. 2 c. -1/2 d. -3 3. If Jimmy and Anna are the only two individuals in the economy, which of the following production combinations would be efficient and attainable based on the same information above? a. 20 bowling balls and 40 shoelaces b. 10 bowling balls and 5 shoelaces c. 10 bowling balls and 30 shoelaces d. 30 shoelaces and 9 bowling balls 4. According to the definition of economics, which of the following resources is (are) scarce? a. Labor b. Machinery

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c. Entrepreneurship d. All of the above 5. Milk and cereal are complements in consumption. If the price of cereal increases, then: a. The demand for milk will decrease. b. The equilibrium price of milk will increase. c. The equilibrium quantity of milk purchased will increase. d. All of the above will occur. 6. When the supply of gasoline increases, a. the demand for gasoline shifts to the right. b. the equilibrium price of gasoline falls. c. the quantity of gasoline demanded decreases. d. all of the above occur. 7. If both demand and supply for pickles decreased at the same time, we would expect the equilibrium price for pickles to ___________________, and the equilibrium quantity of pickles to ________________________. a. be indeterminate; increase b. decrease; be indeterminate c. be indeterminate; decrease d. increase; decrease 8. Wool and lamb chops are complements in production , while lamb chops and pork chops are substitutes in consumption . The price of wool decreases AND the price of pork increases. What happens to the demand and supply of lamb chops as a result? a. The demand for lamb chops rises, and the supply of lamb chops rises. b. The demand for lamb chops rises, and the supply of lamb chops falls. c. The demand for lamb chops falls, and the supply of lamb chops rises. d. The demand for lamb chops falls, and the supply of lamb chops falls.
9. Referring to the figure above, the price elasticity of demand when the price increases from \$6 to \$8 is a. 2.2 b. 3 c. 2 d. 4 10. When the price increases from \$6 to \$8 in the previous problem, revenue _____________, indicating that demand is ________ in that range. a.

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practicefinalexamB - ECON 251 Practice Final Exam B(Based...

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