Test 1 Practice

Test 1 Practice - Page 1 of 17 McMaster University...

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Page 1 of 17 McMaster University Department of Economics ECON 1B03 Midterm Test #1 Saturday February 9, 2008 VERSION 1 Instructor: Professor H Holmes Duration: 2 hours; 2:00 – 4:00pm Total Number of Pages: 17 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 and this test copy. TOTAL MARKS AVAILABLE : 60 NAME:____________________________________________________ STUDENT #: _______________________________________________ MUGSI ID: ________________________________________________ SECTION : Circle One: 9:30-10:20 12:30-1:20

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Page 2 of 17 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Factors of production are a. the mathematical calculations firms make to determine production. b. weather and social and political conditions that affect production. c. the physical relationships between economic inputs and outputs. d . inputs into the production process. ____ 2. The production possibilities frontier is a a. map which shows the frontier beyond which agriculture is unprofitable. b. map which shows areas of the world in which capitalist production is now possible. c. graph which shows the various combinations of resources that can be used to produce a given level of output. d . graph that shows the various combinations of output the economy can possibly produce given the available resources and technology. Figure 1 ____ 3. Refer to Figure 1 . The economy CANNOT produce at which point or points? a. A b. C c . A, C d. A, C, D,
Page 3 of 17 Figure 2 ____ 4. Refer to Figure 2 . The opportunity cost of moving from point D to point C is a. 10 toothbrushes. b. 20 toothbrushes. c. 30 toothbrushes. d . It is impossible for the economy to move from point D to point C. Figure 3 ____ 5. Refer to Figure 3. 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

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Page 4 of 17 Figure 4 ____ 6. Refer to Figure 4 . What is the opportunity cost to society of the movement from point A to point C? a. 50 baseballs b . 1/3 baseball to get 300 bananas, give up 100 baseballs so to get 1 banana give up 100/300=1/3 baseball c. 3 bananas d. 300 bananas Figure 5 ____ 7. Refer to Figure 5. Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B? a.
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Test 1 Practice - Page 1 of 17 McMaster University...

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