final - ECON 210 Final Exam Spring 2010 (Practice Final...

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Econ 210 Spring 2010 Final Exam Pink Page 1 of 12 ECON 210 Final Exam Spring 2010 (Practice Final Exam A for Fall 2010) 1. Why is it that expenses for room and board are not generally considered part of the opportunity cost of college education? a. Expenses for room and board are considered sunk costs because living expenses are paid whether someone attends college or not. b. Expenses for room and board are explicit costs, and only implicit costs are included in measures of opportunity cost. c. Expenses for room and board are generally less than tuition costs, and opportunity costs include only the higher tuition expenses. d. Room and board always cost more for college students than for people who are not in college. 2. Donald and Rupert wash cars and vans at their job. The graph below depicts the production possibilities frontier for each of them. Who has the absolute advantage in washing cars and who has the comparative advantage in washing cars? a. Neither has an absolute advantage in washing cars and Rupert has a comparative advantage in washing cars b. Neither has an absolute advantage in washing cars and Donald has a comparative advantage in washing cars c. Rupert has an absolute advantage in washing cars and neither has a comparative advantage in washing cars d. Donald has an absolute advantage in washing cars and neither has a comparative advantage in washing cars 0 5 10 15 20 25 30 02468 1 0 1 2 Number of Cars Washed Number of Vans Washed Donald Rupert
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Econ 210 Spring 2010 Final Exam Pink Page 2 of 12 China can produce 10 microphones or 20 guitars in an hour. The US can produce 5 microphones or 15 guitars in an hour. Use this information to answer the following questions. 3. Who has the comparative advantage in guitar production? a. China b. US c. Both China and US d. Neither China nor US 4. What is the opportunity cost for the US of producing 1 microphone? a. 1/3 a guitar b. 1 a guitar c. 2 guitars d. 3 guitars 5. If China and US work together to produce guitars and microphones which of the following points would be on their joint PPF? a. 15 microphones and 35 guitars b. 15 microphones and 0 guitars c. 10 microphones and 20 guitars d. None of the above 6. Which of the following would NOT cause an increase in demand? a. Increase in the price of a substitute good b. Increase in the number of buyers c. Decrease in the price of a complementary good d. Decrease in the expected future price 7. The law of diminishing returns allows us to know which of the following? a. The marginal product of inputs is always decreasing b. The marginal product of inputs eventually decreases c. The marginal cost of inputs is always decreasing d. The marginal cost of inputs is decreasing for additional units of inputs used, beyond a certain level
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Econ 210 Spring 2010 Final Exam Pink Page 3 of 12 8. According to the above graph, what is the current consumer surplus in the market?
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This note was uploaded on 02/26/2012 for the course ECON 210 taught by Professor Staff during the Fall '08 term at Purdue University-West Lafayette.

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final - ECON 210 Final Exam Spring 2010 (Practice Final...

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