ECON Exam #1

ECON Exam #1 - ECON 2100 Section 10 TR 8 pm Exam 1 Fall...

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ECON 2100 Section 10 TR 8 pm Exam 1 Fall 2010 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. The opportunity cost of an item is a. the number of hours needed to earn money to buy the item. b. what you give up to get that item. c. usually less than the dollar value of the item. d. the dollar value of the item. e. the sunk cost of an item. ____ 2. Making rational decisions "at the margin" means that people a. make those decisions that do not impose a marginal cost. b. evaluate how easily a decision can be reversed if problems arise. c. compare the marginal costs and marginal benefits of each decision. d. always calculate the marginal dollar costs for each decision. e. always calculate the marginal utility for each decision. ____ 3. The business cycle is the a. relationship between unemployment and inflation. b. irregular fluctuations in economic activity. c. positive relationship between the quantity of money in an economy and inflation. d. predictable changes in economic activity due to changes in government spending and taxes. e. the regular occurance of budget deficits. ____ 4. To improve living standards, policymakers should a. impose restrictions on foreign competition. b. formulate policies designed to increase productivity. c. impose tougher immigration policies. d. provide tax breaks for the middle class. e. strengthen labor unions. ____ 5. To raise productivity, policymakers could a. increase spending on education. b. provide tax credits to firms for capital improvements. c. fund research and development. d. provide low interest rates to encourage investment. e. All of the above are correct. ____ 6. A worker in Thailand can earn $2 per day making cotton cloth on a hand loom. A worker in the United States can earn $80 per day making cotton cloth with a mechanical loom. What accounts for the difference in wages? a. U.S. textile workers belong to a union. b. There is little demand for cotton cloth in Thailand and great demand in the U.S. c. Labor is more productive making cotton cloth with a mechanical loom than with a hand loom. d. Thailand has a low-wage policy to make its textile industry more competitive in world markets. e. Worker expectations are lower in Thailand than in the U.S. 1
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____ 7. In a particular country in 2000, the average worker needed to work 40 hours to produce 55 units of output. In that same country in 2008, the average worker needed to work 30 hours to produce 45 units of output. In that country, the productivity of the average worker a. decreased by about 6 percent between 2000 and 2008. b. remained unchanged between 2000 and 2008. c. increased by about 9 percent between 2000 and 2008.
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ECON Exam #1 - ECON 2100 Section 10 TR 8 pm Exam 1 Fall...

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