Versiona - Introduction to Microeconomics Spring 2011 Exam 1 Multiple Choice Identify the choice that best completes the statement or answers the

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Introduction to Microeconomics Spring 2011 Exam 1 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. The following diagram shows a budget constraint for a particular consumer. 10 20 30 40 50 60 70 80 90 x 10 20 30 40 y If the price of X is $10, what is the price of Y? a. $70 b. $25 c. $15 d. $35 Table 3-3 Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate. Machine Minutes Needed to Make 1 Toothbrush Hairbrush Zimbabwe 3 10 Portugal 5 6 ____ 2. Refer to Table 3-3. Zimbabwe has an absolute advantage in the production of a. hairbrushes and a comparative advantage in the production of toothbrushes. b. toothbrushes and a comparative advantage in the production of toothbrushes. c. hairbrushes and a comparative advantage in the production of hairbrushes. d. toothbrushes and a comparative advantage in the production of hairbrushes. ____ 3. Mallory decides to spend three hours working overtime rather than watching a video with her friends. She earns $8 an hour. Her opportunity cost of working is a. nothing, since she would have received less than $24 of enjoyment from the video. b. the enjoyment she would have received had she watched the video. c. the $24 she earns working. d. the $24 minus the enjoyment she would have received from watching the video. ____ 4. The law of demand states that, other things equal, a. when the price of a good rises, the quantity demanded of the good rises. b. when the price of a good falls, the demand for the good rises. c. when the price of a good falls, the quantity demanded of the good rises. d. when the price of a good rises, the demand for the good falls. ____ 5. The demand curve for hot dogs
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a. does not shift when the price of hot dogs changes because the quantity demanded of hot dogs is measured on the horizontal axis of the graph. b. shifts when the price of hot dogs changes because the price of hot dogs is measured on the vertical axis of the graph. c. shifts when the price of hot dogs changes because the quantity demanded of hot dogs is measured on the horizontal axis of the graph. d. does not shift when the price of hot dogs changes because the price of hot dogs is measured on the vertical axis of the graph. Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. Labor Hours Needed to Make 1 Pound of Pounds Produced in 40 Hours Meat Potatoes Meat Potatoes Farmer 10 2 4 20 Rancher 4 8 10 5 ____ 6. Refer to Table 3-4. Assume that the farmer and the rancher each has 40 labor hours available. If each person spends all his time producing the good in which he has a comparative advantage, then total production is a. 14 pounds of meat and 25 pounds of potatoes. b.
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This document was uploaded on 10/26/2011 for the course ECON 123 at Rutgers.

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Versiona - Introduction to Microeconomics Spring 2011 Exam 1 Multiple Choice Identify the choice that best completes the statement or answers the

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