makeupexam1-251

makeupexam1-251 - ECON 251 Makeup Exam #1 Fall 2007...

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ECON 251 Makeup Exam #1 Fall 2007 Fireland's PPF 0 10 20 30 40 50 0 2 4 6 8 10 12 Wheat Cotton Redland's PPF 0 5 10 15 20 25 30 35 0 1 2 3 4 5 6 Wheat 1. Based on the graphs above, Redland has the absolute advantage in the production of ___________ a. wheat b. cotton c. neither wheat nor cotton d. both wheat and cotton 2. Based on the same graphs, the marginal cost of cotton production for Redland is equal to a. 4 bushels of wheat b. 6 bushels of wheat c. ¼ of a bushel of wheat d. 1/6 of a bushel of wheat 3. People earn their incomes by selling the services of the factors of production they own. Those factors of production are a. land, labor, capital, and entrepreneurship b. labor, education, housing, and money c. education, training, skills, and technology d. demand, supply, equilibrium, and efficiency
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4. When people sell the services of the factors of production they own, they earn I. Rent II. Salary III. Wages IV. Interest V. Profit VI. Earnings VII. Benefits a. I, II, III, IV, V b. I, III, IV, V c. II, III, IV, VII d. I, II, III, IV, V, VI, VII 5. The above graph shows Jack’s production possibilities from 3 hours of cooking. What is his opportunity cost of making one burger? a. 7 pizzas b. 3 pizzas c. 1/3 of a pizza d. 14 pizzas 6. Now Jack has a roommate, Phil. If Phil makes only pizza, he can make 5 pizzas in 3 hours. If he makes only burgers, then he can make 20 in 3 hours. If Jack and Phil decide to produce pizzas and burgers according to comparative advantage, which of the following will be true? a. Jack makes burger and Phil makes pizza. b. Jack makes pizza and Phil makes burger. c. Jack should make both pizza and burgers because he is better in making both. d. None of the above is correct. pizza burger 7 21
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7. Opportunity cost is a. the highest valued alternative given up. b. the marginal benefit of an additional unit of a good. c. what it costs you to get one more unit of the good. d. both a. and b. 8. In one hour Jim can clean 3 rooms and Susan can cook 2 dishes. If Jim cooks then he can cook 5 dishes and if Susan cleans then she can clean 1 room. If the number of dishes cooked is graphed on the x axis, the slope of Jim’s PPF is _______, and the slope of Susan’s PPF is ________. a. -3; -1 b. -3/5; -1/2 c. -5/3; -1/2 d. -2/3; -5 9. Which of the following can shift the PPF outwards? a. taxes b. capital depreciation c. corruption d. none of the above 10. The marginal benefit of a good or service is a. the benefit received from consuming one more unit of it. b. the total benefit we receive from consuming the entire quantity. c. the benefit we receive from consuming a good we only like marginally. d.
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makeupexam1-251 - ECON 251 Makeup Exam #1 Fall 2007...

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