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Unformatted text preview: Version 1 ner y Exam Score L S LD Midterm Exam 1, Econ 102 Feb 8, 2010 This exam has two parts: a multiple choice section consisting of 20 questions, and a short answer/graphing section, also worth 20 points. You will submit all exam materials (scantron, question booklet and completed short answers) at the end of the exam. 1. Which of the following statements is correct? a. Resource scarcity is not a major economic concern in the rich countries of the world b. When the economy is producing efficiently, opportunity costs usually exist but sometimes opportunity costs are zero c. An economic situation is in equilibrium when no individual would be better off taking a different action d. Some very talented, skilled individuals who can do everything better than most people should not specialize in doing any one thing. Suppose Private Bailey can choose to workout to improve his physical fitness test score or study to improve his gunnery table exam score. Using the PPF table to the right, what is the opportunity cost of increasing his time spent on physical fitness from 5 hours/week to 6 hours/week? a. 10 points on the gunnery table exam b. 8 points on the physical fitness test c. 70 points on the gunnery table exam d. 95 points on the physical fitness test 2. Consider the plot of an economy’s production possibilities frontier and community indifference curves to the right. Which of the following statements is false? a. If the economy is at point 1, then it cannot produce more of good X without producing less of good Y, and vice versa b. Point 4 is preferable to points 1 and 3 c. Point 3 is preferable to point 1 d. Point 1 is preferable to point 2 3. Under Armoire, Inc. produces dressers and wardrobes. They face competition from other furniture suppliers, mainly IKEA. When the price of Norwegian wood, which IKEA uses in its production, rises, what happens to the equilibrium price and quantity of wardrobes sold by Under Armoire? a. Price falls, quantity is indeterminate b. Price rises, quantity falls c. Price is indeterminate, quantity rises d. Price rises, quantity rises 4. Locusts have descended on your family wheat farm; meanwhile new FDA studies have suggested that whole-wheat bread is significantly healthier than white bread. What has most likely just happened?...
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This note was uploaded on 01/24/2011 for the course ECON 102 taught by Professor Rossana during the Winter '08 term at University of Michigan.
- Winter '08