midterm1practiceanswer

midterm1practiceanswer - Midterm 1 Key Version #1 Moe...

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Midterm 1 Key Version #1 Moe divides his time between studying Physics and studying Economics. He has discovered that he can earn grades as shown on this production possibilities curve. Frank - Chapter 002 1. According to Moe's PPF, moving from a grade of 80 in economics to a grade of 90 in economics A. comes at a higher opportunity cost than moving from a 90 to a 100 in economics. B. is inefficient. C. comes at a lower opportunity cost than moving from a 90 to a 100 in economics. D. is not feasible. AACSB: Analytical Skills Bloom's: Application Frank - Chapter 002 #117 Learning Objective: 2-2 Section: Comparative Advantage and Production Possibilities Frank - Chapter 003
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2. Refer to the figure above. Assume that column A and column B are the initial demand and supply curves. At a price of $50, the market would experience A. excess supply of 5 units. B. excess demand of 5 units. C. excess supply of 70 units. D. an equilibrium. AACSB: Analytical Skills Bloom's: Application Frank - Chapter 003 #101 Learning Objective: 3-4 Section: Predicting and Explaining Changes in Prices and Quantities 3. The quantity of Revlon nail polish demanded by Jen decreased after the price of Revlon nail polish increased because Jen decided to find a cheaper brand of nail polish. This is called a(n) A. income effect of a price change. B. decrease in buyer's reservation price. C. increase in buyer's reservation price. D. substitution effect of a price change. AACSB: Analytical Skills Bloom's: Application Frank - Chapter 003 #13 Learning Objective: 3-1 Section: Buyers and Sellers in Markets 4. If a point on a production possibility curve is attainable, A. it might or might not be efficient. B. it is efficient only if it does not exhaust all currently available resources. C. it must be efficient. D. it must completely exhaust all currently available resources. AACSB: Analytical Skills Bloom's: Understanding Frank - Chapter 002 #52 Learning Objective: 2-2 Section: Comparative Advantage and Production Possibilities
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5. If Leslie can produce two pairs of pants in an hour while Eva can make one pair an hour, then it must be the case that A. Eva has a comparative advantage. B. Leslie has a comparative advantage. C. Leslie has both comparative and absolute advantage. D. Leslie has an absolute advantage. AACSB: Analytical Skills Bloom's: Knowledge Frank - Chapter 002 #3 Learning Objective: 2-1 Section: Exchange and Opportunity Cost 6. If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent, then demand for textbooks is A. price inelastic. B.
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This note was uploaded on 08/02/2011 for the course ECON 1 taught by Professor Tang during the Spring '08 term at UCSD.

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midterm1practiceanswer - Midterm 1 Key Version #1 Moe...

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