Fall_2007_-_Exam_I_M1

Fall_2007_-_Exam_I_M1 - rance D pain A "Cheese" C...

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Butter Guns C: A: Butter Guns D: B: Butter Guns Butter Guns D A C Guns Butter B France Spain Pounds of “Cheese” Loaves of "Bread" X "Cheese" (Pounds) QUESTIONS 1 - 4 REFER TO THE SHIFTS IN PRODUCTION POSSIBILITIES SHOWN BELOW: 1. The impact of a decrease in the stock of capital on the production possibilities frontier is best represented by graph: a) A b) B * c) C d) D 2. The impact of an economy entering a recession, with rising unemployment of labor, on the production possibilities frontier is best represented by graph: a) A * b) B c) C d) D 3. The impact of an increase in the labor force on the production possibilities frontier is best represented by graph: * a) A b) B c) C d) D 4. The impact of shift in consumer preferences away from guns to butter on the production possibilities frontier is best represented by graph: a) A * b) B c) C d) D 5. Given the production possibilities frontier shown here we can conclude that the opportunity cost in production of Guns is greatest at basket: a) A * b) B c) C d) D 6. This economy is experiencing unemployment, or is using its resources inefficiently at basket: * a) A b) B c) C d) D 7. The opportunity cost in production of Guns for this society is smallest at basket: * a) A b) B c) C d) D 8. The existence of scarcity confronting this society is best represented by basket: a) A b) B * c) C d) D
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9. The word “economy” comes from the Greek work oikonomos , which means a) “environment” b) “production” * c) “one who manages a household” d) “one who makes decisions” 10. Which of the following words or phrases best captures the notion of equity ? a) minimum waste c) sameness b) maximum benefit * d) fairness 11. When the government redistributes income from the wealthy to the poor, a) efficiency is increased, but equity is not. b)
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Fall_2007_-_Exam_I_M1 - rance D pain A "Cheese" C...

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