Solutions forTest 1 Version 1 Day

Solutions forTest 1 Version 1 Day - Page 1 of 17 McMaster...

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Page 1 of 17 McMaster University Department of Economics ECON 1B03 DAY SECTIONS Midterm Test #1 Saturday October 13, 2007 VERSION 1 Instructor: Professor H Holmes Duration: 2 hours; 2:00 – 4:00pm Total Number of Pages: 15 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, VERSION NUMBER AND SECTION NUMBER ON THE SCAN SHEET OR YOUR GRADE WILL NOT BE RECORDED. You may use the Casio FX calculator. Hand in the scan sheet, your rough work paper and this test copy. TOTAL MARKS AVAILABLE : 60 NAME:____________________________________________________ STUDENT #: _______________________________________________ MUGSI ID: ________________________________________________ SECTION : Circle One: C01 (9:30-10:20) C02 (12:30-1:20) EC01 (Wednesday night)
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Page 2 of 17 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Any point on a country's production possibilities frontier represents a combination of two goods that an economy a. will never be able to produce. b . can produce using all available resources and technology. c. can produce using some of its resources and technology. d. may be able to produce sometime in the future with additional resources and technology. ____ 2. Which of the following is the most accurate statement about production possibilities? a. An economy can produce only on the production possibilities frontier. b. An economy can produce at any point inside or outside a production possibilities frontier. c . An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier. d. An economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier. ____ 3. If an economy is producing efficiently a . there is no way to produce more of one good without producing less of the other. On the PPF b. it is possible to produce more of both goods. c. it is possible to produce more of one good without producing less of the other. d. it is not possible to produce more of one good at any cost. Figure 1 ____ 4. Refer to Figure 1 . The economy can produce at which point or points? a . B, D, E b. A, B, D, E c. D, C d. D
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Page 3 of 17 ____ 5. Refer to Figure 1 . The economy CANNOT produce at which point or points? a. A b. C c . A, C outside the PPF d. A, C, D, Figure 2 ____ 6. Refer to Figure 2. The shift of the frontier from A to B was most likely caused by which of the following? a . technological improvement in the production of batteries b. more labour available in the economy c. a general technological breakthrough d. more capital available in the economy Figure 3
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Page 4 of 17 ____ 7. Refer to Figure 3. An efficient combination of bathtubs and barrels would be a . 30 barrels and 6 bathtubs. On the PPF b. 20 barrels and 8 bathtubs. c.
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Solutions forTest 1 Version 1 Day - Page 1 of 17 McMaster...

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