ECO 201 Practice Exam I

ECO 201 Practice Exam I - Economics 201 Spring 2007 First...

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Economics 201 Spring 2007 Your Name__________________________________ First Exam this is FORM 1 so indicate on scan sheet This examination consists of 22 multiple choice questions worth 4 points each and 3 essay/graphing questions worth a total of 20 points. Answer the multiple choice questions on the attached scan sheet. You have from 7:40 a.m. to 8:50 a.m. to complete the exam. If you have a question, raise your hand; I will come to you. 1. Economic systems answer three fundamental questions for their members: a. How to Eliminate Scarcity, Who is to Benefit, and When to Produce b. How to Eliminate Scarcity, What to Produce, For whom to Produce c. When to Produce, Why Produce, How to Produce d. What to Produce, How to produce, For whom to Produce e. How High Should Taxes Be, How Long Should the Work Week Be, What to Produce 2. In a market system a higher price will a. force some consumers out of the market b. force some producers out of the market c. result in the quantity bought being less than the quantity sold d. result in an increase of Supply e. result in an increase in Quantity Demanded 3. A Production Possibility Frontier will shift outwards if a. unemployment is eliminated b. technology improves in one industry only c. inefficient production methods are eliminated d. international trade occurs e. government planners decide that more of “Good X” should be produced 4. “Ceteris Paribus” is an expression that a. means that what holds true for a small group may not hold true for a larger group: for instance, a few people can see a ball game better by standing, if everyone stands, however, no one is better off. b. means other things are presumed to be held fixed; it asks the reader to imagine a laboratory-like experiment being conducted c. causality between two events cannot simply be inferred by the sequence in which the events occur d. means “one out of many,” and it is the motto of the United States e. means “buyer beware”
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The next TWO questions are based on the following diagram: Greec e Phoenicia Barrels Barrels of Wine of Wine 200 120 100 Tons of Grain 600 Tons of Grain 5. According to the above diagram, the opportunity cost of producing one more ton of grain in Greece is a. 120 barrels of wine b. 5/6 barrel of wine a. 1.5 barrels of wine b. 1.2 barrels of wine c. impossible to determine given the information in the diagram 6. According to the above diagram, when trade occurs a. Phoenicia will export Wine b. Phoenicia will export Grain c. Phoenicia will export both Wine and Grain d. Greece will export both Wine and Grain e. the pattern of trade can not be determined from the diagram 7. The term “Opportunity Cost” suggests that a. in any exchange situation, what one person gains must be at the expense of the other person b. not all individuals will make the most of life’s opportunities—some will fail to achieve their goals
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ECO 201 Practice Exam I - Economics 201 Spring 2007 First...

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