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ECON 1010 Study Guide - Midterm Guide: Comparative Advantage, Normal Good, Business CycleExam


Department
Economics
Course Code
ECON 1010
Professor
All
Study Guide
Midterm

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ECON 1O1OA: INTRODUCTION TO MACROECONOMICS
DEPARTMENT OF ECONOMICS
FACULTY OF LIBERAL ARTS AND PROFESSIONAL STUDIES
YORK UNIVERSITY
MIDTERM EXAM
FALL 2011
Version 3
Course Director: Dr. Sadia Mariam Malik
TOTAL POINTS: 100
TOTAL WORTH:30o/o
STUDENT NAME , tl ll',
STUDENT I.D.: 1r' ;:E ti ,i,, i:; Qi;! b
INSTTTUCTIONS:
1. This exam consists of lmultiple choice questions. There is only one correct
answer.
Z. Circle your final answer for every question on each page of the exam and
carefuily mark the selected letter on the computefized Answer Sheet.
3. Use HB pencils onlY.
4. Or1ly non-programmable catrculators and your student I.D is allowed to be with
you on your desk.
5. Time Allowed: 90 minutes
GOOD LUCK!

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Midterm Exam/Econ 1010A/Fall 201 1
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) If Sam is producing at a point inside his production possibilities frontier, then he
A) is unaffected by costs and technology.
7 B) must be doing the best he can with limited resources.
' C) is fully using all his resources and allocating his resources to their best use.
D) can increase production of both goods with zero opportunity cost.
E) has a high opportunity cost of moving from this point.
2) Which of the following newspaper headlines concerns a macroeconomic issue? 2)
A) \ fhy do grain producers purchase less pesticides?
@Wtty are people buying more SUVs and fewer minivans? .--
C) How would an unexpected freeze in Oxford, Nova Scotia change the price of blueberries in
the Maritimes?
D) How would a tax on e-commerce affect chapters.indigo.ca?
E) Ia/hy is Japan's economy stagnant? ",
3) When a farmer decides to harvest tomatoes using machines instead of migrant workers, the
farmer is answerins the ouestion.
A) "how" B) "who" C) "wherel' D) "when" E) "what"
4) Which of the following is an example of a positive statement?
A) Increasing the minimum wage results in more unemployment.
B) Canada should have lower taxrates for wealthier Canadians.
C) The Bank of Cinada ought to cut the interest rate.
D) Canada should cut back on its use of carbon-based fuels such as coal and oil.
E) Every Canadian should have equal access to health care.
5) For the aggregate economy, income equals
A) expenditure equals GDP only if there is no depreciation.
B) expenditure equals GDP.
C) GDB but expenditure is generally less than these.
D) expenditure equals GDP only if there is no govemment or foreign sectors.
E) expenditurg but these are not generally equal to GDP.
6) A production possibilities frontier will shift outward FOR ALL OF THE FOLLOWING
REASONS EXCEPT
A) an increase in the stock of capital.
B) a technological improvement.,
70 oppot*nity cost is increasing'**
D) an increase in the labour force.-.
2 E; none of the above.
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tlse the table below to answet the following questions'
Table20.2.6
There are only two goods in this economy.
Price Quantity
Computer Dsks 1'00 1.80 25,000 18,000
7) Refer to Table 20.2.6.Consider the data in this table. What is current real GDP in terms of base'
year prices?
A) $192,000.
B) $95,000.
@$sa,ooo'
D) $189,900.
E) None of the above
8) Refer to Table 20.2.6. Consider the data in this table. What is current nominal G*D-"-P?
A) $192,000.
f,y'$tsr,ooo'
c) $95,000.
D) $93,000.
E) None of the above.
9) Unemployment caused by permanently decreased demand-fol horse-drawn carriages is a4
example of
A) cyclical unemPloYment.
B) discouraged unemPloYment.
Stmctural unemPloYment.
D) seasonal unemPloYment.
E) frictional unemPloYment.
L0) Individuals A and B can both produce good X. We say thatA has a comparati-v.g a-dyantage in
the production of good X if
A) A can produce more units of X in a given time period than B'
B) A can produce X using newer technology than B'
C) A has a higher opportunity cost of producing X than B'
@enasa lower opportunity cost of producing X than B'
E) A can produce less units of X in a given time period than B'
11) Suppose the economy of Econoworld produces only two goods, kayaks and birdseed. In one
y"ii ZOkayaks are produced and sold for $1,000 each and 10 bags of birdseed are produced and
sold for $30 each. The value of nominal GDP for this year is d;**C'it
l----
nL
8'3-
e)
1//
.b
10)
11) P
A) $23,000.
B)$20,000.
c) $300.
ff$zo,aoo.
E) 20 kayaks plus L0 bags of birdseed.
ka yae g Qa
4w$ t0
3
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