Econ1 S09 1st Midterm (Stein) - Econ 001 Midterm 1...

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Econ 001: Midterm 1 February 17, 2009 Instructions: This is a 60-minute examination. Write all answers in the blue books provided. Show all work. Use diagrams where appropriate and label all diagrams carefully. Write your name and your Recitation Instructor's name in every blue book that you use. This exam is given under the rules of Penn's Honor system. All blue books, blank or filled, must be handed in at the end of this exam. No blue books may be taken from the room. The use of Programmable Calculators is in violation of Departmental rule. It is strictly forbidden! The Midterm has 2 parts. Part 1 consists of 8 multiple-choice questions. Please use the first page of a blue book to record your answers. Part 2 consists of 2 short answer questions. Please use a separate blue book for each. Part I: Multiple Choice Questions (4 points each/32 points total): 1. Steve already bought a non refundable plane ticket to Florida for Spring Break, which cost him $150. A week before Spring Break, Steve’s roommate Harry invites Steve to come stay with him in New York over break. Train tickets to New York cost $50, and Steve knows that he will get $250 worth of benefit if he goes to New York. What is Steve’s opportunity cost of going to Florida? a) $150 b) $350 c) $200 d) $250
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investment projects in infrastructure (e.g., roads, railways, bridges). The goals of this package are: a) To shift the economy from inside the PPF to onto the current PPF curve. b) To shift out the economy’s PPF curve for future years. c) Both a & b are correct. d) Neither is correct. 3. The United States and Japan produce Movies and Cars as follows: USA Japan Movies (per worker) 20 70 Cars (per worker) 60 20 Workers 30 7 a) Japan has an absolute and comparative advantage in producing movies. b) The USA has an absolute and comparative advantage in producing movies. c) Japan has an absolute advantage and the USA has a comparative advantage in producing movies. d) The USA has an absolute advantage and Japan has a comparative advantage in producing movies. 4. The exceptionally cold January has reduced the supply of roses. On Valentine’s Day more boxes of chocolates were sold than in past years. Theses two statements are consistent with Roses and Chocolate being, for most boyfriends, a) Complements, as the cross price elasticity is positive. b) Substitutes, as the cross price elasticity is positive. c) Complements, as the cross price elasticity is negative. b) Substitutes, as the cross price elasticity is negative. 5. A recent salmonella scare has linked 9 deaths to contaminated peanut butter. As a result we should expect: a) Lower demand for peanut butter. b)
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This note was uploaded on 01/14/2012 for the course ECON 101 taught by Professor Profeessor during the Spring '11 term at Aachen University of Applied Sciences.

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Econ1 S09 1st Midterm (Stein) - Econ 001 Midterm 1...

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