Final Exam ECON 203 OL4_US2 Fall 2013
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Name___________________________________
I. MULTIPLE CHOICE (40 questions, 2 points each). Choose the one alternative that best completes the
statement or answers the question.
1) An example of people acting in their own self-interest would include: 1) _______
A) a teenager earns an A grade average in school in order to use his or her parent’s car.
B) individuals joining a car pool to work when tolls are imposed on congested highways.
C) an adult, returning to college to pursue a degree to qualify for a promotion at work.
D) All of the above are examples of people acting in their own self-interest.
2) Microeconomics is best described as the study of: 2) _______
A) inflation, unemployment, gross national product, and the nation’s economy as a whole.
B) the choices made by individual households, firms, and governments.
C) marginal changes in the economy.
D) how markets interact in the aggregate economy.
3) The saying that “There is no such thing as a free lunch” refers to: 3) _______
A) the principle of reality in a modern world.
B) the principle of diminishing returns.
C) the price of fast food in today’s economy.
D) the principle of opportunity cost.
Figure 2.3
4) In Figure 2.3, the move from production possibility curve YZ to production possibility curve XV, could be caused by:
4) _______
A) more land, labor or capital. B) increased unemployment.
C) a decline in technology. D) all of the above. Recall Application 4, “Fertilizer and Crop Yields,” to answer the following questions:
5) As bags of nitrogen applied went from 0 to 1 to 2 to 3 to 4, crop yield went from 85 to 120 to 135 to 144 to 147 bushels
per acre. The results show that as more bags of nitrogen was added, holding all other inputs constant, output: 5)
_______
A) stayed the same. B) rose but at an increasing rate.
C) fell. D) rose but at a declining rate.
6) One of the most obvious clues to the relative scarcity of a product in a market economy is: 6) _______
A) the limited selection of colors. B) the variations in available sizes.
C) its current market price. D) none of the above
7) Suppose Bob can produce more jeans than Joe in a day. Bob has ________ advantage over Joe in sewing jeans. 7)
_______
A) an absolute and a comparative B) an absolute
C) a comparative D) neither an absolute nor a comparative
