Fall2005_Midterm

Fall2005_Midterm - Name: _ Class: _ Date: _ ID: A Midterm...

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Name: ________________________ Class: ___________________ Date: __________ ID: A 1 Midterm Exam Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Henry decides to spend two hours playing golf rather than working at his job which pays $8 per hour. Henry's tradeoff is a. the $16 he could have earned working for two hours. b. nothing, because he enjoys playing golf more than working. c. the increase in skill he obtains from playing golf for those two hours. d. nothing, because he spent $16 for green fees to play golf. ____ 2. A tradeoff exists between a clean environment and a higher level of income in that a. studies show that individuals with higher levels of income actually pollute less than low-income individuals. b. to pay for pollution clean-up, the government must increase taxes which lowers income. c. laws that reduce pollution raise costs of production and reduce incomes. d. by employing individuals to clean up pollution, employment and income both rise. ____ 3. Economists use the word equity to describe a situation in which a. each member of society has the same income. b. society is getting the most it can from its scarce resources. c. those in society who have the least will receive the most. d. the benefits of society's resources are distributed fairly among society's members. ____ 4. When the government implements programs such as progressive income tax rates, which of the following is likely to occur? a. Equity is increased and efficiency is increased. b. Equity is increased and efficiency is decreased. c. Equity is decreased and efficiency is increased. d. Equity is decreased and efficiency is decreased. ____ 5. What you give up to obtain an item is called your a. opportunity cost. b. explicit cost. c. true cost. d. direct cost. ____ 6. A rational decision maker takes an action only if the a. marginal benefit is less than the marginal cost. b. marginal benefit is greater than the marginal cost. c. average benefit is greater than the average cost. d. marginal benefit is greater than both the average cost and the marginal cost. ____ 7. A typical worker in Italy can produce 24 units of product in an 8 hour day, where a typical worker in Poland produces 25 units of product in a 10 hour day. We can conclude that a. worker productivity in Poland is higher than in Italy. b. the standard of living will be higher in Italy than in Poland. c. productivity for the Polish worker is 3 units per hour and 2 1/2 units per hour for the Italian worker. d. there will be no difference between the standard of living in Italy and Poland.
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Name: ________________________ ID: A 2 ____ 8. In the short run, the Phillips curve illustrates a. the tradeoff between inflation and unemployment. b.
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This note was uploaded on 07/08/2011 for the course ECON 1102 taught by Professor N/a during the Spring '11 term at Dallas.

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Fall2005_Midterm - Name: _ Class: _ Date: _ ID: A Midterm...

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