Econ 251 Page 1 of 8 Spring 2010 Exam 1 Pink ECON 251 Exam #1 Spring 2010 (Practice Exam #1B for Spring 2011) Suppose you have to decide how to spend your day. You can only choose one activity to do for the entire day. Your three options are as follows: Activity Value Studying $100 Playing Guitar Hero $75 Watching an NCIS marathon on TV $50 1.What is the opportunity cost for you of spending the day studying? a.$75 b.$100 c.$125 d.$0 2.The computer that Melinda Gates uses in her foundation work is an example of what kind of economic resource? 3.Why are production possibility frontiers negatively sloped?
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Econ 251 Page 2 of 8 Spring 2010 Exam 1 Pink 4.Bob can make either pizzas or pasta. He just bought a new oven that allows him to produce more pizza than before. The change in his PPF is illustrated in the figure above. As a result of the change in productivity from having a new oven, the marginal cost of producing pizzas and the marginal cost of producing pasta _______. 5.Jeff and Angela make two goods, coats and scarves. In one day, Jeff can make either 80 coats or 200 scarves. Angela can make either 100 coats or 220 scarves. Jeff’s marginal cost of producing coats is . a.80 coats b.200 scarves c.2.5 scarves d.1.8 scarves 6.Based on the information above for Jeff and Angela, ________ has comparative advantage in producing coats, and __________ has absolute advantage in producing scarves. 7.Based on the same information, if the quantity of coats is measured on the x axis, what is the slope of Angela’s production possibility frontier? Pasta Pizza