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EC 201 Fall 2009 Q2 - Principles of Economics EC 201 Cal...

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Principles of Economics EC 201 Cal Poly Pomona Dr. Bresnock Fall, 2009 Quiz 2 (15 points) Choose the best answer to each question and mark it on your answer form. Use Scantron 815-E for this purpose. You must also write in explanations for each answer choice and provide a brief reason as to why the answer is correct or incorrect. Spaces have been allocated on the quiz for the purpose of either writing in or typing in your explanations. You must turn in your quiz with the explanations and your scantron to this quiz on Weds., Oct. 14th at class lecture. A) B) C) D) 2. Which of the following is real capital? A) a pair of stockings B) a construction crane C) a savings account D) a share of IBM stock A) B) C) D) Page 1 1. Suppose that Zualia, which has full employment and full production, can obtain 1 unit of capital goods by sacrificing 2 units of consumer goods domestically, but can obtain 1 unit of capital goods from another country by trading 1 unit of consumer goods for it. This reality illustrates:
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Use the following to answer question 3: C o n s u m e r G o o d s E C A G 0 H B D F C a p i t a l g o o d s 3. Technological advance that is useful in producing capital goods but not in producing consumer goods is shown by the shift of the production possibilities curve from AB to: A) CD. B) BE. C) AF. D) GH. A) B) C) D) Use the following to answer question 4: M a r g i n a l b e n e f i t a n d m a r g i n a l c o s t ( d o l l a r s ) M a r g i n a l C o s t M a r g i n a l B e n e f i t 0 Q u a n
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