UA EC 110 - QUIZ 1 SAMPLE MATERIALS (7 pages)

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QUIZ 1 SAMPLE MATERIALS



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QUIZ 1 SAMPLE MATERIALS

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Pages:
7
School:
University of Alabama
Course:
Ec 110 - Prin of Microeconomics
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QUIZ 1 MATERIALS ANSWERS TO MULTIPLE CHOICE QUESTIONS APPEAR AT THE END OF THIS SAMPLE QUIZ NO ANSWERS ARE PROVIDED FOR THE PROBLEMS PART A 1 For Italy the opportunity cost incurred when 6 cheeses are produced is 8 watches For Switzerland the opportunity cost incurred when 10 cheeses are produced is 50 watches Which country has a comparative advantage in the production of cheese A Switzerland B Italy C Both have the comparative advantage in the production of cheese D Neither have the comparative advantage in the production of cheese 2 Having an absolute advantage A means specializing in the production of only one good B means having higher opportunity costs than the trading partner C means being able to produce more of a product with same amount of resources than another producer D means having lower opportunity costs than the trading partner 3 Justin decides to spend an additional hour working overtime rather than playing football with his friends He earns 6 an hour for his hour s work His opportunity cost is A the 6 he earns B the enjoyment he would have received playing football with his friends C the 6 minus the enjoyment he would have received from playing football with his friends D nothing since he would have received less than 6 worth of enjoyment from playing football 4 When a production possibilities frontier is bowed outward as more of one good is produced its opportunity cost A increases B decreases C remains constant D cannot be predicted 5 For a society a good is not scarce if A all members of society can have all they want of it B at least one individual in society can obtain all he or she wants of the good C firms are producing at full capacity D those who have enough income can buy all they want of the good 6 Which of the following is true of households in the circular flow model A They own the factors of production B They choose the quantity of goods and services to buy C They interact in the factor markets and the goods market D All of the above are true 7 Comparative advantage is found by A comparing relative opportunity costs B calculating the total cost of production C comparing the productivity of one to that of another D none of the above is correct 8 A point that lies outside the production possibility frontier A is possible to attain if unemployment decreases B will never be attained C shows that no tradeoff is involved D is not attainable with the nation s current resources and technology 9 Which of the following increases the quantity supplied of compact discs but does NOT increase the supply of compact discs A a decrease in the price of a compact disc B an increase in the price of a compact disc C a decrease in the number of suppliers of compact discs D an increase in the price of resources used to produce compact discs 10 A production possibilities frontier will be linear and not bowed out if A unemployment is zero B resources are not allocated efficiently C no tradeoffs exist D the tradeoff between the two goods is always at a constant rate 11 An increase in the number of fast food restaurants A raises the price of fast food meals B increases the demand for fast food meals C increases the supply of fast food meals D increases the demand for substitutes for fast food meals 12 A movement along the supply curve as the price of the product changes is called a A change in quantity supplied B change in supply C demand shift D substitution effect 13 If a decrease in income increases the demand for a good then the good is a A normal good B inferior good C luxury good D substitute good 14 Which of the following is NOT illustrated by the production possibilities frontier A efficiency B opportunity costs C equity D tradeoffs 15 Ceteris paribus is a Latin phrase that literally means A other things being equal B because of this C to respond slowly to a change in price D There s no such thing as a free lunch PART B 1 The principle of increasing opportunity cost is consistent with a production possibilities frontier that is A a straight line B bowed inward C upward sloping D bowed outward 2 On a production possibilities graph production is inefficient if A the production point is inside the frontier B the production point is outside the frontier C the production point is on the frontier D the production point is on or inside the frontier 3 A person has a comparative advantage in an activity whenever she A can do the activity in less time than anyone else B has an absolute advantage in the activity C can perform the activity at a lower opportunity cost than can another person D can do everything better than anyone else 4 A category 5 hurricane hits Louisiana and causes widespread destruction to the state s sugarcane crop The devastation causes the A supply curve for sugar to shift to the left causing the price of sugar to fall B supply curve for sugar to shift to the left causing the price of sugar to rise C supply curve for sugar to shift to the right causing the price of sugar to rise D supply curve for sugar to shift to the right causing the price of sugar to fall 5 The part of economics that is limited to making statements about facts and the relationships among them is A positive economics B normative economics C macroeconomics D microeconomics 6 Suppose that in one week Mickey can produce 10 pairs of shoes or 5 bookshelves while Donald can produce 15 pairs of shoes or 7 bookshelves Then Mickey has a n advantage in producing A absolute bookshelves B comparative shoes C absolute shoes D comparative bookshelves 7 Which of the following would change the quantity supplied for a good or service A a change in the technology used to produce the good or service B a change in the price of inputs used to produce the good or service C a change in expectations about the price of the good or service D a change in the price of the good or service 8 Which of the following will NOT cause a shift of the demand curve A A change in income B A change in the price of a substitute C A change in the price of an input D A change in the price of a complement 9 The most significant determinant of quantity supplied is A the number of days good weather B the amount of skilled labor available C the price of the good itself D the numbers of producers in the market 10 In production of goods and services tradeoffs exist because A buyers and sellers often negotiate prices B society has only a limited amount of productive resources C not all production is efficient D human wants and needs


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