Exam1A-key - Version A Page 1 Checklist: Did you enter your...

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Version A Page 1 Checklist: Did you enter your NAME, NETID, SECTION and TEST FORM in SCANTRON? (Yes/No) Did you fill out the BOX on the cover page of this EXAM BOOKLET ? (Yes/No) 1. The basic concern of economics is: A) to find the best way to distribute scarce resources B) to keep business firms from losing money. C) to make sure everyone has enough resources. D) to prove that capitalism is better than socialism. 2. You can either spend $100 on a new economics textbook or a new CD player. If you choose to buy the new economics textbook, the opportunity cost is: A) impossible to determine. B) both the $100 and the new CD player. C) $100. D) the new CD player. 3. Khalil is offered a free ticket to the opera. His opportunity cost of going to the opera is: A) whatever Khalil would have done had he not gone to the opera. B) zero—the tickets were free. C) the price listed on the ticket or whatever Khalil would have done had he not gone to the opera. D) the price listed on the ticket. 4. Every time a seller and a buyer engage in a market transaction: A) the buyer gains more than the seller B) both the seller and the buyer gain some value C) the seller or the buyer may loose something. D) the seller always gain more than the buyer Version A Page 1
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Page 2 5. Say your parents give you a car for your birthday. It is not the new model you wanted, but it's in very good condition. They bought it used for $15,000 (market value). The cost of keeping the car to you is (not counting maintenance and operation cost) is: A) $15,000 B) We can't really answer with the information given. C) 0 D) $20,000, since that is the cost of the car you wanted. 6. Say you have a ticket to see the next Cubs game at Wrigley Field. You bought the ticket at face value, which was $50, but since the Cubs are in the playoff you could scalp it for at least $400. The cost of attending the game is (count the amount you paid for the ticket as part of the cost): A) $400 B) $50 C) $450. D) $350. 7. In one hour, the United States can produce 25 tons of steel or 250 automobiles. In one hour, Japan can produce 30 tons of steel or 275 automobiles. This information implies that: A) Japan has a comparative advantage in the production of both goods. B) Japan has a comparative advantage in the production of automobiles. C) the United States has a comparative advantage in the production of automobiles. D) the United States has an absolute advantage in the production of steel. 8. In one day, Kessy can bake 10 cookies or mix 15 glasses of lemonade. His friend, Ava, can make 10 cookies or 10 glasses of lemonade. His other friend, Ian, can make 10 cookies or 20 glasses of lemonade. Who has the lowest opportunity cost in cookie production? A)
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This note was uploaded on 02/26/2010 for the course ECON 102 taught by Professor Kim during the Spring '08 term at University of Illinois, Urbana Champaign.

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Exam1A-key - Version A Page 1 Checklist: Did you enter your...

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