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Midterm

Practice Midterm, ECO1104.pdf

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Department
Economics
Course
ECO1104
Professor
Gordon Lenjosek
Semester
Fall

Description
University of Ottawa ECO1104 E Name________________________ Midterm # 1 (October 21, 2010) Student number________________ Instructions: Please fill in your name and student number on every page of the exam questionnaire and on the NCS sheet. Use the NCS sheet to answer the Multiple Choice questions. This exam has 11 pages—check that this copy has all of them. Good luck! Multiple-Choice Questions (84 points—2 points per question) Identify the letter of the choice that best completes the statement or answers the question. 1. One definition of equity would be a. equality. b. efficiency. c. fairness. d. similarity. 2. Factors of production are a. the mathematical calculations firms make to determine production. b. weather and social and political conditions that affect production. c. the physical relationships between economic inputs and outputs. d. inputs into the production process. Figure 1 Figure 2 3. Refer to Figure 1. The economy can produce at which point or points? a B, D, E b A, B, D, E c C, d D e E, 4. Refer to Figure 2. Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B? a. an increase in resources necessary to produce capital goods b. an improvement in the technology of producing consumer goods c. an increase in the overall level of technology in the economy d. an increase in unemployment 1 University of Ottawa ECO1104 E Name________________________ Midterm # 1 (October 21, 2010) Student number________________ 5. A production possibilities frontier will be linear and not bowed out if a. no tradeoffs exist. b. the tradeoff between the two goods is always at a constant rate. c. unemployment is zero. d. resources are allocated efficiently. e. the tradeoff between the two goods is always at a decreasing rate. 6. If labour in Mexico is cheaper than labour in Canada in all areas of production, a. neither nation can benefit from trade. b. Mexico can benefit from trade but Canada cannot. c. Mexico will not have a comparative advantage in any good. d. both nations can benefit from trade. 7. Trade is based on a. absolutadvantage. b. comparative advantage. c. productioncosts. d. relative dollar prices. 8. Comparative advantage reflects a. productivity. b. relative opportunity cost. c. efficiency. d. terms of trade advantage. 9. Exports are a. a limit placed on the quantity of goods brought into a country. b. goods produced abroad and sold domestically. c. a country's ability to produce a good. d. goods produced domestically and sold abroad. 10. Canada could benefit by a. restrictiimports and promoting exports. b. promoting imports and restricting exports. c. restricting both imports and exports. d. not restricting trade. 11. The forces that make market economies work are a. price and quantity. b. demand and supply. c. the Senate and House of Commons. d. the Constitution. 12. Two goods are complements if a decrease in the price of one good a. increases the quantity demanded of the other good. b. reduces the demand for the other good. c. reduces the quantity demanded of the other good. d. raises the demand for the other good. 2 University of Ottawa ECO1104 E Name________________________ Midterm # 1 (October 21, 2010) Student number________________ Figure 3 13. Refer to Figure 3. If PPF represents the Production Possibility Frontier of Anorexia, which curve(s) could represent its Consumption Possibility Frontier if it trades. a. Curve A. b. Curve B. c. Curve C. d. Curves A and C. e. Curves B and C. Table 1 Labor Hours needed to make one unit of: Amount produced in 160 hours: Cheese Bread Cheese Bread France 1 2 40 20 Spain 2 8 20 5 14. Refer to Table 1. The opportunity cost of 1 unit of cheese in Spain is a 2reads. b 1read. c 1/2read. d 1/4read. 15. You love peanut butter. You hear on the news that 50 % of the peanut crop in the South has been wiped out, which will cause the price to double by the end of the year. As a result, a. your demand for peanut butter will increase by the end of the year. b. your demand for peanut butter increases today. c. your demand for peanut butter falls as you look for a substitute good. d. you decide to give up peanut butter completely. 3 University of Ottawa ECO1104 E Name________________________ Midterm # 1 (October 21, 2010) Student number________________ Table 2 The table shows individual demand schedules for a market. Price of the Good Aaron Angela Austin Alyssa $0.00 20 16 10 8 0.50 18 12 6 6 1.00 14 10 2 5 1.50 12 8 0 4 2.00 6 6 0 2 2.50 0 4 0 0 16. Refer to Table 2. When the price of the good is $1.00, the quantity demanded in this market would be a. 4units. b. 31units. c. 2units. d. 14units. 17. Refer to Table 2. If the price increases from $1.00 to $1.50, a. the market demand increases by 20 units. b. the quantity demanded in the market decreases by 2 units. c. individual demands will increase. d. the quantity demanded in the market decreases by 7 units. Figure 4 18. Refer to Figure 4. The movement from point A to point B on the graph would be caused by a. an increase in price. b. a decrease in price. c. a decrease in the price of a substitute good. d. an increase in income. 4 University of Ottawa ECO1104 E Name________________________ Midterm # 1 (October 21, 2010) Student number________________ Figure 5 19. Refer to Figure 5. In this market, equilibrium price and quantity would be a. $14 and 70. b. $12 and 40. c. $10 and 50. d. $8 and50. 20. Refer to Figure 5. If price in this market is currently $8, quantity supplied would be a. 40 and quantity demanded would be 60. b. 60 and quantity demanded would be 40. c. 50 and quantity demanded would be 50. d. 70 and quantity demanded would be 30. 21. A weaker demand together with a stronger supply would necessarily result in a. a lower price. b. a higher price. c. an increase in
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