midterm1

midterm1 - 1 Multiple Choice (40 points) Write down on your...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Multiple Choice (40 points) Write down on your answer sheet your answer for each question. There is only one correct answer for each question. Each question is worth two points. 1. The production possibilities curve shows: A. the relationship between inputs and output B. the minimum amount of one good that can be produced for every possible production level of the other good. C. a positive relationship D. the maximum production of one good for every possible production level of the other good. E. how increasing the production of one good allows pro- duction of the other good to also increase. 2. If P is the price of a good and Q is the quantity demanded of a good at that price, then the correct mathematical statement of the price elasticity of demand is: A. Δ P P Δ Q Q B. Δ Q Q Δ P P C. Δ P Δ Q D. Δ Q Δ P E. Δ P P Δ Q 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
3. If the price of shoes decreases and, as a result, the demand for shirts increases, then: A. shoes and shirts are complements. B. shoes are a normal good, shirts are inferior. C. shoes and shirts are substitutes. D. shirts are a normal good, shoes are inferior. E. both are normal goods. 4. To say that an individual possesses an absolute advantage in the pro- duction of software means that: A. he has a lower opportunity cost of producing software. B. he can produce more, and/or higher quality, software in a given amount of time. C. he was the first to create the software. D. he charges the lowest price for software. E. he has the most capital. 2
Background image of page 2
5. The short-run price elasticity of demand for electricity is likely to be (blank) the long-run price elasticity of demand because (blank). A. more elastic than; in the long run the price goes back to normal. B. just as elastic; it’s still the same product. C.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 08/02/2011 for the course ECON 1 taught by Professor Tang during the Spring '08 term at UCSD.

Page1 / 10

midterm1 - 1 Multiple Choice (40 points) Write down on your...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online