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FS11_HW1_Solutions - Econ1015 Fall 2011 Homework 1 Due At...

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Econ1015 Homework 1 Dr. Myoung Lee Fall, 2011 Due: At 11am on Tuesday (9/13) University of Missouri Name: ________________________________________ TA: ___________________________ Student Number: _______________________________ Section: _______________________ 1. (1pt)What are the main goals in macroeconomics? Economic growth, full employment, stable prices. Use the PPF below to answer questions 2-5. 2. (1pt)The negative slope of PPF indicates: (1) There is a tradeoff between guns and butter. (2) The opportunity cost of an additional gun is butter. (3) The resources in the economy is not fully used (4) Both (1) and (2). (5) All of the above. 3. (1pt)The change in the slope of the PPF from A to B means: (1) the opportunity cost of guns in terms of butter is increasing. (2) The economy experiences diminishing marginal returns. (3) The economy specializes in the production of butter. (4) The economy has an increase in the factors of production. (5) The opportunity cost of guns in terms of butter is decreasing. 4. (1pt)At point C: (1) More guns can be produced without reducing the number of butter.
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