ECON 2002.01 Study Guide - Midterm Guide: Scantron Corporation, Macroeconomics, Microeconomics
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Midterm 1 AU17 Econ 2002.01
Version 2 Name _________________
1. Write your name on the exam.
2. Write “2” under “IDENTIFICATION NUMBER” on the scantron and fill out the bubble “2”.
3. Write your name on the scantron, last name first and first name next. Write the recitation number
under the “SPECIAL CODES” on the scantron. You should fill out the bubbles for both name and the
4. After you answer all the questions, put the exam and the scantron on the table in the front of the room
and leave the room quietly, no talking and no questions. You cannot keep the exam.
Lee, Hyung Koo
Lee, Hyung Koo
Lee, Hyung Koo
1. Every society faces economic trade-offs. This means
A) some people live better than others do.
B) not everyone can have enough goods to survive.
C) producing more of one good means less of another good can be produced.
D) society's output cannot be made available to all.
2. Which of the following is a positive economic statement?
A) The inflation rate in the United States is too high.
B) Unemployment insurance payments increase when the unemployment rate rises.
C) The government should defund Obamacare.
D) States should be able to enact their own marijuana legalization laws.
3. The branch of economics which studies how households and firms make choices, and interact in
markets is called
C) positive economics.
D) normative economics.
4. Refer to the graph above: ________ is (are) inefficient in that not all resources are being used.
A) Point A
B) Point B
C) Point C
D) Points A and C
5. An inward shift of the production possibilities frontier represents
A) positive economic growth.
B) negative economic growth.
C) a rise in the unemployment rate.
D) technological improvement.
6. Which of the following is an example of spending on factors of production in the circular flow
A) Tuan purchases a cappuccino at the student union.
B) Laurence rents a car to drive to a wedding in San Diego.
C) Yvette pays $50 to join a softball league.
D) The "Lucky Ducky" casino buys a new craps table for the casino floor.
7. Domestically produced goods and services sold to other countries are referred to as
C) transfer payments.
D) capital outflow.
The above trade matrix indicates the maximum quantities of the two goods that can be produced by each
country if all factors of production are used to produce that one good.
8. Select the statement that accurately interprets the data in the table.
A) Mexico has a comparative advantage in making empanadas.
B) Colombia has a comparative advantage in making tacos.
C) Mexico has a comparative advantage in making empanadas and making tacos.
D) Mexico has a comparative advantage in making tacos.
9. If Brazil has a comparative advantage relative to Cuba in the production of sugar cane, then
A) the average cost of production for sugar cane is lower in Brazil than in Cuba.
B) the implicit costs of production for sugar cane are lower in Brazil than in Cuba.
C) the opportunity cost of production for sugar cane is lower in Brazil than in Cuba.
D) the explicit cost of production for sugar cane is lower in Brazil than in Cuba.
Instructions: write your name on the exam, write 2 under identification number on the scantron and fill out the bubble 2 , write your name on the scantron, last name first and first name next. Write the recitation number under the special codes on the scantron. Version 2: every society faces economic trade-offs. 10. examples of comparative advantage show how trade between two countries can make each better off. At the same time, more and more americans prefer microbrew beer over wine. Which of the following best explains the effect of these events in the microbrew beer market: the supply curve has shifted to the right and the demand curve has shifted to the left. As a result there has been a decrease in the equilibrium quantity and an uncertain effect on the equilibrium price: both the supply and demand curves have shifted to the right.