252_Exam_I_BLUE

# 252_Exam_I_BLUE - 1 In the simple circular-flow diagram...

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In the simple circular-flow diagram, households a. are the only decision makers. b. own the factors of production. c. are buyers of inputs. d. consume only some of the goods and services that firms produce. 2. The two loops in the circular-flow diagram represent a. the flow of goods and the flow of services. b. the flow of dollars and the flow of financial assets. c. the flow of inputs into production processes and the flow of outputs from production processes. d. the flows of inputs and outputs and the flow of dollars. 3. The production possibilities frontier is a graph that shows the various combinations of output that an economy a. should produce. b. wants to produce. c. can produce. d. demands. 4. When computing the opportunity cost of attending a concert you should include a. the price you pay for the ticket and the value of your time. b. the price you pay for the ticket, but not the value of your time. c. the value of your time, but not the price you pay for the ticket. d. neither the price of the ticket nor the value of your time. 5. A rational decision maker takes an action if and only if a. the marginal cost of the action is zero. b. the opportunity cost of the action is zero. c. the total benefit of the action exceeds the total cost of the action. d. the marginal benefit of the action exceeds the marginal cost of the action. In the table below opening weekend box office receipts for four movies are listed with the CPI for the year in which the movie was released. The box office receipts are reported as dollars in the year of release. For example, Jaws brought in 13,211,513 1975 dollars during its opening weekend. Year Movie Opening Weekend CPI 2009 The Hangover \$44,979,319 215.6 1982 E.T.: The Extra-Terrestrial \$11,835,389 94.3 1997 Titanic \$28,638,131 154.4 1975 Jaws \$13,211,513 52.1 6. The opening weekend box office receipts for Titanic in 2009 dollars equals: a. \$31,476,834 b. \$36,529,773 c. \$39,989,515 d. \$45,800,245 7. Based upon this data, the movie with the highest inflation adjusted opening weekend receipts was: a. The Hangover c. Titanic b. E.T.: The Extra-Terrestrial d. Jaws 8. One bag of flour is sold for \$1.00 to a bakery, which uses the flour to bake bread that is sold for \$3.00 to consumers. A second bag of flour is sold to a consumer in a grocery store for \$2.00. Taking these three transactions into account, GDP increases by: a. \$2.00. b. \$3.00. c. \$5.00. d. \$6.00. ECONOMICS 252

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## This note was uploaded on 03/29/2011 for the course ECON 252 taught by Professor Robertholand during the Spring '08 term at Purdue.

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252_Exam_I_BLUE - 1 In the simple circular-flow diagram...

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