ECO_201_1st_practice_exam - ECO-201 Dr. Cathy Gao Please...

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ECO-201 Dr. Cathy Gao Please work out all the problems before you check the answers on the last page. 25 multiple choice questions – choose the best answer. 1. Which of the following statements is true about scarcity? A. Scarcity refers to the situation in which unlimited wants exceed limited resources. B. Scarcity is not a problem for the wealthy. C. Scarcity is only a problem when a country has too large a population. D. Scarcity arises when there is a wide disparity in income distribution. 2. Which of the following is a microeconomics question? A. How much will be saved and how much will be produced in the entire economy? B. What will the level of economic growth be in the entire economy? C. What factors determine the price of carrots? D. What determines the average price level and inflation? 3. During the summer you have made the decision to attend summer school, which prevents you from working your usual summer job in which you normally earn $6,000 for the summer. Your tuition cost is $3,000 and books and supplies cost $1,300. The opportunity cost of attending summer school is A. $10,300 B. $6,000 C. $4,300 D. $1,700 Production possibilities Possibility Pizza (per hour) Soda (cases per hour) A 0 100 B 1 95 C 2 80 D 3 60 E 4 35 F 5 0 4. In the above table, the production of 3 pizzas and 80 cases of soda is A. possible only if there is inflation. B. impossible unless more resources become available or technology improves. C. feasible but would involve unemployed or misallocated resources. D. possible only if the economy produces with maximum efficiency. 5. Economic growth can be pictured in a PPF diagram by A. making the PPF more bowed out. B. making the PPF less bowed out. C. making the PPF a straight line.
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D. shifting the PPF outward. 6. Using the production possibilities frontier model, unemployment is described as producing at a point A. on the exact middle of the PPF curve. B. on either end of the PPF curve. C. inside the PPF curve. D. outside the PPF curve. 7. The bowed-out shape of the production possibilities frontier in the above figure indicates that A. some resources are better suited for producing computers. B. the opportunity cost of producing more computers decreases as more computers are
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This note was uploaded on 02/13/2012 for the course ECO 201 taught by Professor Dunlevy during the Fall '08 term at Miami University.

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ECO_201_1st_practice_exam - ECO-201 Dr. Cathy Gao Please...

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