ECON 252 Midterm 1 - Maymester 2010

ECON 252 Midterm 1 - Maymester 2010 - ECON 252-002 Midterm...

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ECON 252-002 Midterm I Name: Student ID: (Please write down your name and student ID. You have one hour. Good luck~!) 1. A tradeoff exists between a clean environment and a higher level of income in that a) studies show that individuals with higher levels of income pollute less than low-income individuals. b) efforts to reduce pollution typically are not completely successful. c) laws that reduce pollution raise costs of production and reduce incomes. d) employing individuals to clean up pollution causes increases in employment and income. 2. Which of the following statements about trade is false? a) Trade increases competition. b) With trade, one country wins and one country loses. c) Bulgaria can benefit, potentially, from trade with any other country. d) Trade allows people to buy a greater variety of goods and services at lower cost. 3. The term "market failure" a) means the same thing as "market power." b) refers to the dissolution of a market when firms decide to quit producing a certain product. c) refers to the failure of a market to produce an efficient allocation of resources. d) refers to government's failure to enforce the property rights of households or firms that participate in a certain market. 4. Most economists believe that an increase in the quantity of money results in a) an increase in the demand for goods and services. b) lower unemployment in the short run. c) higher inflation in the long run. d) All of the above are correct. 5. The circular-flow diagram is an example of a) a laboratory experiment. b) an economic model. c) a mathematical model. d) All of the above are correct.
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6. The following table contains some production possibilities for an economy for a given month. Sweaters Gloves 4 300 6 ? 8 100 If the production possibilities frontier is bowed outward, then “?” could be a) 100. b) 150. c) 200. d) 250. Figure 1 goods goods A B consumer capital 7. Refer to Figure 1 . Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B? a) a decrease in unemployment
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This note was uploaded on 12/06/2011 for the course ECON 252 taught by Professor Robertholand during the Fall '08 term at Purdue University-West Lafayette.

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ECON 252 Midterm 1 - Maymester 2010 - ECON 252-002 Midterm...

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