Practice Exam 1 Key F10

Practice Exam 1 Key F10 - ECO369 International Economic...

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GVSU, Wei Sun PRACTICE EXAM 1 Answer Key NAME: I. Multiple Choice Questions. Write your answers clearly in the boxes below. Only answers in the boxes will be graded. 1B 2C 3A 4C 5A 6B 7D 8D 9B 10B 11B 12C 1. If the relative price of Nike shoes in terms of Fubu shoes is 3, Nike shoes are $120 per pair, how much is each pair of Fubu shoes? a) $360 b) $40 c) $120 d) $60 2. A country’s PPF shows constant opportunity cost, its downward sloping PPF must be a) concave (bowed outward) from the origin. b) convex (bowed inward) to the origin. c) a straight line. d) a horizontal line. 3. Assuming that the opportunity cost of soybean (in terms of textile forgone) at some point along a country’s PPF is 2, and given the relative price is 3, which of the following is true? a) The country is producing too little soybean. b) The country is producing too much soybean. c) The country should produce less soybean. d) The country should produce more textile. 4. Suppose that a farmer has an endowment of 20 bushels of barley. The relative price of barley (in terms of wheat) is 4. Draw the farmer’s budget line and place barley along the horizontal axis. Which of the following is False? a) The farmer’s budget line has a slope of 4. b) The farmer can exchange a maximum of 80 bushels of wheat given his barley endowment and the relative price. c) The farmer’s budget line has a slope of ¼. d) The farmer can afford to consume a bundle that has 15 bushels of barley and 15
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This note was uploaded on 12/14/2010 for the course ECO 369 taught by Professor Sun during the Fall '10 term at Grand Valley State University.

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Practice Exam 1 Key F10 - ECO369 International Economic...

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