Econ101FinalRed-F06

Econ101FinalRed-F06 - Econ 101 section 3 F06 Schroeter...

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Econ 101, section 3, F06 Schroeter Final Exam, Red Choose the single best answer for each question. 1. Market economies are distinguished from other types of economies on the basis of a. the political affiliation of government officials. b. the electoral processes used to pick government officials. *. the ways in which scarce resources are allocated. d. the ability to produce things of cultural importance. 2. A bowed outward shape for a production possibility frontier reflects the fact that a. the opportunity cost of producing a good decreases as more of the good is produced. b. technological change is occurring rapidly. c. starting from an efficient output combination, the economy could produce more of one good without sacrificing some of the other. *. resources are specialized; that is, particular resources are better-suited to producing some goods than others. Questions 3, 4, and 5 are based on the following information. Two small countries, Tama and Grundy, use their labor resources to produce goods of two types: manufactured goods and agricultural goods. The table below gives the number of hours of labor needed to produce one unit of each type of good in each country. Hours needed to produce one unit of manufactured goods agricultural goods Tama 3 1/2 Grundy 2 1 3. The opportunity cost of 1 unit of manufactured goods in Tama is a. 2 units of agricultural goods per unit of manufactured goods. b. 3 units of agricultural goods per unit of manufactured goods. c. 4 units of agricultural goods per unit of manufactured goods. *. 6 units of agricultural goods per unit of manufactured goods. 4. Which of the following is true? a. Grundy has the absolute advantage in the production of manufactured goods. b. Tama has the absolute advantage in the production of agricultural goods. c. Grundy has the comparative advantage in the production of manufactured goods. *. All of the above are true.
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2 5. Suppose that there are international markets in manufactured goods and agricultural goods. Tama and Grundy would be able to engage in a mutually beneficial trade with each other if the trade price of one unit of manufactured goods were a. 1 unit of agricultural goods. *. 3 units of agricultural goods. c. 7 units of agricultural goods. d. either a or b . 6. Which of the following is NOT a determinant of quantity demanded of a good? a. the good's own price. b. the price of substitute or complement goods. c. consumer income. *. the technology of production. 7. A government-funded study of automotive safety produces the recommendation that motorists replace their automobile tires more frequently. At the same time, the price of rubber goes up. As a result, in the competitive market for tires, the equilibrium price will *. increase and the equilibrium quantity will either increase, decrease, or stay the same.
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Econ101FinalRed-F06 - Econ 101 section 3 F06 Schroeter...

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