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KSU ECON 1100 - Exam 1 ECON 1100

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ECON 1100 – Global Economics (Section 09) Exam #1 – Spring 2008 (Version C) Multiple Choice Questions (212 points each): 1. A “Rational Decision Maker” should a. consider both the benefits and costs of different courses of action. b. consider the costs, but not benefits, of different courses of action. c. consider the benefits, but not costs, of different courses of action. d. None of the above answers are correct. 2. Mike can assemble 10 bicycles in a single day, while Heidi can assemble 8 bicycles in a single day. Based upon this information alone, we know that a. Heidi possesses an Absolute Advantage in assembling bicycles. b. Heidi posses a Comparative Advantage in assembling bicycles. c. Mike possesses an Absolute Advantage in assembling bicycles. d. More than one of the above answers is correct. 3. In 2002 College graduates earned $18,750 per year more than High School graduates. If this difference had instead been $15,000 per year, then we would expect a. that nobody would change their decision regarding whether or not to attend college. b. fewer people to pursue a college education. c. more people to pursue a college education. d. that nobody would find it beneficial to pursue a college education. 4. Company Unions a. consist of members who perform similar jobs or tasks, regardless of what enterprise they are employed by. b. consist of members who are employed by a single enterprise, irrespective of the task they perform within the enterprise. c. are the most common union structure in Japan. d. More than one of the above answers is correct. 5. John attended the Atlanta Hawks-Los Angeles Lakers basketball game at Philips Arena on Wednesday, February 6, 2008. His Total Benefits from doing so were $150, while his Total Costs from doing so were $130. It follows that his Economic Surplus a. from attending the game was $20. b. from attending the game was $130. c. from attending the game was $150. d. would have been greater if he had instead stayed home and watched the game on TV.6. Most modern economies are most accurately described as a. Mixed Economies b. Pure Capitalist Economies c. Pure Socialist Economies d. Pure Communist Economies 7. Privately owned enterprises in a free market economy have a primary goal of a. making working conditions as good as possible for employees. b. providing maximum benefits to the consumers of their products. c. earning as large a profit as possible. d. damaging the environment. 8. The restriction that all workers in Georgia must be paid at least $5.85 per hour is an example of a. a custom or tradition which has a substantial impact on the labor market. b. a law which restricts the behavior of market participants. c. a procedure which restricts the behavior of firms. d. coercion. 9. In which of the following countries do individuals enjoy the greatest amount of Economic Freedom? a. Cuba. b. Singapore. c. Libya. d. India. 10. Last weekend a series of earthquakes in central Africa killed 43 people and the New York Giants beat the New England Patriots in Super Bowl XLII by a score of 17 to 14. If Patriots quarterback Tom Brady is more upset about the outcome of the Super Bowl than about the loss of life in central Africa, then a. it suggests that he is a horrible individual. b. it suggests he is a better quarterback than Eli Manning. c. it suggests that he is a self-interested individual. d. it suggests that he is an irrational individual. 11. Under “Command Planning” a. the government relies upon the voluntary response of the private sector to a set of guidelines jointly formulated by government, industry, and labor. b. the government directly controls all economic activity, and nearly all production takes place in government owned enterprises. c. rational, “utility maximizing” consumers freely decide which goods to purchase and in what quantities. d. rational, “profit maximizing” firms decide which goods to produce and in what quantities.12. The “Environmental Sustainability Index” discussed in the textbook a. attempts to quantify the “impact of an economy on the environment” and the “long-term environmental sustainability of an economic system.” b. is a “Structure Based Classification” of different economic systems. c. suggests that countries such as France and The United States are doing a horrible job of dealing with environmental issues, while countries such as India and North Korea are doing a very good job of dealing with environmental issues. d. More than one of the above answers is correct. For questions 13 and 14 refer to the graph below, which illustrates the Lorenz Curves for Canada and Jamaica in 2006. 13. Based upon this graph, we can tell that in 2006 a. incomes in Canada were distributed more equally than were incomes in Jamaica. b. incomes in Jamaica were distributed more equally than were incomes in Canada. c. average incomes were higher in Canada than in Jamaica. d. more people were unemployed in Jamaica than in Canada. 14. Based upon the Lorenz Curves illustrated above, we can tell that a. the value of the Gini-Coefficient in Canada in 2006 was less than the value of the Gini-Coefficient in Canada in 1996. b. the value of the Gini-Coefficient in Canada in 2006 was greater than the value of the Gini-Coefficient in Canada in 1996. c. the value of the Gini-Coefficient in Canada in 2006 was less than the value of the Gini-Coefficient in Jamaica in 2006. d. the value of the Gini-Coefficient in Canada in 2006 was greater than the value of the Gini-Coefficient in Jamaica in 2006. Cumulative share of total income Cumulative share of total population Lorenz Curve for Jamaica 0 1 1 0 Lorenz Curve for Canada15. _________ is an economic system in which the means of production are privately owned and operated for a profit. a. Communism b. Socialism c. Capitalism d. Fascism 16. _____________ is/are “the skills, education, and training which individuals in the labor force possess.” a. Moral Persuasion b. Produced Assets c. Natural Assets d. Human Capital 17. Paula enjoys going to the movies. In January she saw 5 movies in the theatre. Her Marginal Benefit of the 5th movie was $15, while her Marginal Cost of the 5th movie was $12. Based upon this information, we know that a. her Economic Surplus was clearly maximized by going


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KSU ECON 1100 - Exam 1 ECON 1100

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