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# practicefinalexam - ECON 251 PRACTICE FINAL EXAM Fall 2006...

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ECON 251 PRACTICE FINAL EXAM Fall 2006 1. Sam’s production possibilities frontier has good A on the horizontal axis and good B on the vertical axis. If Sam is producing at a point inside his frontier, then he a. can increase production of both goods with no increase in resources. b. is fully using all his resources. c. values good A more than good B . d. s values good B more than good A . 2. Which of the following is NOT an economic factor of production? 3. Ron can cook 3 dozen waffles in an hour, while Beth can cook only 2 dozen waffles in an hour. Ron can cook 4 dozen pancakes in an hour, while Beth can cook 3 dozen pancakes in an hour. Based on this information, which of the following statements is true? 4. Ron is thinking of opening up a restaurant. He currently has a job as a postal carrier that pays \$45,000 a year. He anticipates earning \$80,000 a year as a restaurant owner. Based on this information, what is Ron’s opportunity cost of running the restaurant?

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5. The price of a gallon of milk falls. Which of the following is a possible cause? a. A decrease in the price of oatmeal, a complement to milk. b. A scientific discovery that milk cause diabetes. c. An increase in the income of the average household, with milk being a normal good. d. A drought that reduces supplies of feed grains fed to cows that produce milk. 6. In 2004 there were 200,000 gas grills demanded at a price of \$500. In 2005 there were more than 220,000 gas grills demanded at a price of \$550. This increase could be the result of any of the following EXCEPT 7. Consumers and producers are expecting the price of computers to increase within the next two months. Which of the following would you expect to see as a result?

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practicefinalexam - ECON 251 PRACTICE FINAL EXAM Fall 2006...

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