practicefinalexam251

practicefinalexam251 - ECON 251 Final Exam Spring 2007 1....

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ECON 251 Final Exam Spring 2007 1. Which of the following is NOT an economic resource? a. Labor b. Land c. Money d. Entrepreneurship 2. Sea-Doo and Yamaha manufacture speed boats and wave runners. Sea-Doo can produce 1,200 wave runners or 200 speed boats per year. Yamaha can produce 1,400 wave runners or 400 speed boats per year. Based on this information, which of the following is true? a. Sea-Doo has a comparative advantage in producing speed boats, although Yamaha has an absolute advantage in producing speed boats. b. Yamaha has a comparative advantage and an absolute advantage in producing speed boats. c. Sea-Doo has both comparative and absolute advantage in producing wave runners. d. Yamaha has comparative advantage in producing wave runners, and Sea- Doo has comparative advantage in producing speed boats. 3. Assume Sea-Doo and Yamaha are the only speed boat and wave runner manufacturers in the economy. Based on their production possibilities from the problem above, which of the following production combinations is both feasible and efficient for the economy? a. 700 speed boats and 0 wave runners b. 600 speed boats and 1 wave runner c. 400 speed boats and 1,000 wave runners d. 400 speed boats and 1,200 wave runners 4. Upon graduating from college, Hunter has three job offers. His first choice is working as an accountant, his second choice is working as a personnel manager, and his third choice is working as a lobbyist. What would be the opportunity cost
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to Hunter of working as a lobbyist? a. the value of working as a personnel manager b. the value of working as a lobbyist c. the value of working as an accountant d. the salary Hunter would earn as a personnel manager 5. Which of the following will shift the demand for milk? a. an increase in the price of milk b. a decrease in the price of milk c. a scientific discovery that milk increases your metabolism d. All of the above would shift the demand for milk. 6. A decrease in supply is represented by a. a shift to the left of the supply curve b. a shift to the right of the supply curve c. a shift to the left of the demand curve d. a shift to the right of the demand curve 7. In a market, the equation for demand is: P = 20 – 4Q d , and the equation for supply is P = 8 + 2Q s . What is equilibrium in this market? a. Equilibrium price = $12 ; Equilibrium quantity = 5 b. Equilibrium price = $2 ; Equilibrium quantity = 6 c. Equilibrium price = $4 ; Equilibrium quantity = 4 d. Equilibrium price = $12; Equilibrium quantity = 2 8. Based on the equations for demand and supply in the problem above, what is consumer surplus if the government sets a price ceiling at $14? a. $28 b. $14 c. $8 d. $3 9. In the market for good X, the total number of buyers has decreased, but the total number of sellers has increased. What will happen to the equilibrium price and
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quantity of good X? a.
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This note was uploaded on 04/27/2011 for the course ECON 251 taught by Professor Blanchard during the Spring '08 term at Purdue.

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practicefinalexam251 - ECON 251 Final Exam Spring 2007 1....

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