test1fall2005 - Dr. Cliff Lipscomb Principles of...

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Dr. Cliff Lipscomb Version ____ Principles of Microeconomics Fall 2005 Exam 1 1. “According to the Bureau of Economic Analysis, the U.S. economy grew 3.3% in the second quarter of 2005” is an example of a _____________ economic statement. a. normative b. accurate c. positive d. illogical 2. Scarcity a. is the inability to satisfy all our wants b. is the concept that establishes the field of economics c. applies only to people living in poverty d. Both A and B 3. Which of the following is not a factor of production? a. an engineer working at Microsoft b. a factory in which automobile tires are manufactured c. a hundred dollar bill in the cash register of Kohl’s d. an irrigation system on a farm in Alabama 4. What type of factor of production is a union autoworker? a. land b. labor c. capital d. entrepreneurship 5. If the President of Colombia commented that "inflation in Colombia is too high," this would be an example of: a. a normative statement. b. a positive statement. c. either a normative or a positive statement. d. neither a positive nor a normative statement. 6. The meaning of ceteris paribus is that a. we should omit irrelevant facts from our analysis b. we assume all variables except the one under study is held constant c. we should use inductive rather than deductive reasoning d. economic models should be as realistic as possible 7. Decision making on the margin involves a. comparing the total benefits and total costs when making a decision b. measuring the additional costs involved when making a decision c. determining the total benefits of a decision d. comparing the marginal costs and marginal benefits when making a decision
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Dr. Cliff Lipscomb Version ____ 8. Opportunity cost a. is based on the idea of trade-offs b. is, by definition, only concerned with implicit economic costs c. can be illustrated by the production possibilities frontier d. all of the above 9. Recently, voters in Atlanta, GA passed a $180 million bond issue to help fund an estimated $500 million entertainment complex in the downtown part of the city. The mayor of Atlanta, Shirley Franklin, was quoted as saying that the building of this entertainment complex would significantly improve the local economy and would therefore benefit all of the citizens of Georgia. Her statement best exemplifies a. the fallacy of composition b. the post hoc ergo propter hoc fallacy c. bias d. a violation of the law of ceteris paribus 10. Going skiing will cost Amelia $80 a day. She also loses $40 a day in wages because she has to take time off of work. Amelia still decides to go skiing, so a. her decision shows impulsive behavior. b. Amelia’s decision is rational if her marginal benefits from skiing are greater than $120. c.
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test1fall2005 - Dr. Cliff Lipscomb Principles of...

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