# FinalSpring06aAnswers - Econ 001 Final May 5th 2006...

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3. Amy and Ben are married. Their production possibilities are given in the next table: Potatoes (per day) Tomatoes (per day) Amy 10 20 Ben 3 15 Which of the following is true? a. Amy has an absolute advantage in both goods. b. Amy has a comparative advantage in Tomatoes. c. Ben has a comparative advantage in Potatoes. d. All of the above are correct. 4. Suppose Amy and Ben choose to produce 11 potatoes. What must be the marginal benefit of the last potato in this case? a. 2 tomatoes b. 5 tomatoes c. 3 tomatoes d. 0 tomatoes 5. A decrease in the price of a good and a resulting increase in total expenditure on this good are associated with: a. Inferior goods b. Substitute goods c. Elastic demand d. Normal goods 6. Consider the following cost function: TC(Q)=25+15Q The fixed cost and marginal cost of the second unit are (respectively): a. 25, 30 b. 25, 15 c. 15, 25 d. 30, 25 e. Not enough information to decide
Mr. Potato is a small farmer in Idaho. The graph below depicts his marginal cost and average total cost curves (per ton) of growing potatoes. Use this graph to answer questions 7 & 8. 7.

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FinalSpring06aAnswers - Econ 001 Final May 5th 2006...

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