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1b03fall2006test1version1

1b03fall2006test1version1 - Page 1 of 11 McMaster...

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Page 1 of 11 McMaster University Department of Economics ECON 1B03 VERSION 1 Midterm Test #1 Tuesday September 26, 2006 Instructor: H Holmes Duration: 45 minutes Total Number of Pages: 10 INSTRUCTIONS : Answer all questions on the scan sheets. USE AN HB PENCIL ONLY. Make sure you carefully fill in the bubbles. YOU MUST FILL IN YOUR STUDENT NUMBER AND THE TEST VERSION NUMBER ON THE SCAN SHEET OR YOUR GRADE WILL NOT BE RECORDED. You may use a non-programmable calculator. Hand in both the scan sheet and this test copy. TOTAL MARKS AVAILABLE : 30 NAME:____________________________________________________ STUDENT #: _______________________________________________
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Page 2 of 11 MULTIPLE CHOICE: Choose the best answer for each question. 1. A retired individual decides to spend the day golfing. The opportunity cost of this decision a. is zero, since the individual is retired and is not forgoing any income to spend the day golfing. b. is equal to cost of the golf outing. c. equals the cost of the golf outing plus the value of the individual's alternative use of time. d. is best measured by using the wage rate this individual earned prior to retirement. 2. Positive economics is an approach to economics that a. seeks to understand behaviour and the operation of systems without making judgments. b. analyzes outcomes of economic behaviour, evaluates them as good or bad, and may prescribe preferred courses of action. c. applies statistical techniques and data to economic problems. d. examines the role of government in the economy. 3. If the unemployment rate increases from 10% to 12%, the 4. Production inefficiency can occur 5. An economy that is producing at the wrong point on its production possibility frontier is
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