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# practiceexam1A - ECON 251 Exam 1 Fall 2010 (Practice Exam...

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Econ 251 Page 2 of 9 Fall 2010 Exam 1 Pink 5. Teagan is trying to decide how to spend her day. She can travel to Chicago which she values at \$75. Or she can stay in West Lafayette and study economics which she values at \$25. Teagan could also attend the Purdue football game with friends which she values at \$50. She can only do one activity for the day. What is the opportunity cost for Teagan of studying economics? a. \$25, the value to her of studying economics b. \$50, the difference between the value to studying economics and the value of traveling to Chicago c. \$75, the value of going to Chicago d. \$125, the sum of the value of going to Chicago and the value of going to the football game 6. Micah bought a new car last week for \$22,000. The sticker price on the car was \$25,000. Today, he could sell the car for \$20,000. Based on this information, what is his opportunity cost of owning the car today? a. \$20,000 b. \$22,000 c. \$42,000 d. \$45, 000 7. The table below represents the production possibilities for a small country that produces only books and chocolate. What is the marginal cost of producing the 8 th pound of chocolate? Books 18 15 9 0 Chocolate 3 6 9 12 a. 1 book b. 2 books c. 3 books d. 9 books
Econ 251 Page 3 of 9 Fall 2010 Exam 1 Pink 8. The table below shows Miles’ marginal benefit for tuna sandwiches. Using this information, how many tuna sandwiches would Miles buy if the price of a tuna sandwich is \$4? Quantity Marginal Benefit 1 10 2 6 3 3 4 2 5 0 a. 2 b. 3 c. 4 d. 5 9. An Iowa egg producer is recalling 380 million eggs linked to an outbreak of salmonella poisoning. How does this widely publicized news affect the demand for eggs? a.

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## This note was uploaded on 07/15/2011 for the course ECON 251 taught by Professor Blanchard during the Spring '08 term at Purdue University-West Lafayette.

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practiceexam1A - ECON 251 Exam 1 Fall 2010 (Practice Exam...

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