ECON 2303: MicroEconomics Final Exam Set

Normative statements are not

descriptive

A statement describing how the world is

is a positive statement.

The circular-flow diagram

is an economic model. incorporates two types of decision makers: households and firms. represents the flows of inputs, outputs, and dollars. All of the above are correct. Answer: All of the above are correct.

Refer to Figure 2-6. If this economy devotes all of its resources to the production of blankets, then it will produce

0 blankets and 360 pillows. 200 blankets and 240 pillows. 320 blankets and 120 pillows. 360 blankets and 0 pillows. Answer: 360 blankets and 0 pillows.

Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point F is

120 Blankets.

Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900? Hot Dogs Burgers 1800 0 1350 450 900 750 450 975 0 1125

150 burgers 225 burgers 300 burgers 450 burgers Answer: 225 burgers

Suppose US and China are the only two countries in the world. Both countries can produce computer and wheat. The following table describes their maximum output per day. Use this table to answer the following question. Computer Wheat US 2000 1250 China 950 1250 US's opportunity cost of computer is _____ wheat? (hint: enter your answer in 2 decimal places)

Answer: 0.625

Suppose US and China are the only two countries in the world. Both countries can produce computer and wheat. The following table describes their maximum output per day. Use this table to answer the following question. Computer Wheat US 1350 1150 China 850 1300 US's opportunity cost of computer is _____ wheat? (hint: enter your answer in 2 decimal places)

Answer: 0.85

Suppose US and China are the only two countries in the world. Both countries can produce computer and wheat. The following table describes their maximum output per day. Use this table to answer the following question. Computer Wheat US 1550 1110 China 1200 1450 US's opportunity cost of wheat is _____ computer? (hint: enter your answer in 2 decimal places)

Answer: 1.41 How? (computer/wheat for US)

Refer to Figure 2-4. Efficient production is represented by which point(s)?

Q, R, U R, T, U R, U S, T Answer: R, U

Normative statements are

claims about how the world should be

In economics, capital refers to

The finances necessary for firms to produce their products. Buildings and machines used in the production process. The money households use to purchase firms' output. Stocks and bonds. Answer: buildings and machines used in the production process.

Refer to Figure 2-6. If this economy moves from point F to point G, then which of the following statements is correct? *f is on the line, g is off the line on the insufficient outside*

This economy has experienced economic growth.

Positive statements are

claims about how the world is

Where can an economy not produce?

outside its production possibilities frontier

Normative statements are

prescriptive, whereas positive statements are descriptive.

Unemployment would cause an economy to

produce inside its production possibilities frontier. produce on its production possibilities frontier. produce outside its production possibilities frontier. experience an inward shift of its production possibilities frontier. Answer: produce inside its production possibilities frontier.

In the simple circular flow diagram, the flow of money from the markets for goods and services to the firms is called

revenue.

The production possibilities frontier illustrates

the trade-off between efficiency and equality. the combination of output that an economy should produce. the combination of output that each member of society should consume. None of the above is correct. Answer: None of the above is correct.

Suppose US and China are the only two countries in the world. Both countries can produce computer and wheat. The following table describes their maximum output per day. Use this table to answer the following question. Computer Wheat US 1800 1350 China 850 1200 US's opportunity cost of wheat is _____ computer? (hint: enter your answer in 2 decimal places)

Answer: 1.33

Suppose US and China are the only two countries in the world. Both countries can produce computer and wheat. The following table describes their maximum output per day. Use this table to answer the following question. Computer Wheat US 1850 1050 China 1200 1400 US's opportunity cost of computer is _____ wheat? (hint: enter your answer in 2 decimal places)

Answer: .57 How? (wheat/computer for US)

Suppose US and China are the only two countries in the world. Both countries can produce computer and wheat. The following table describes their maximum output per day. Use this table to answer the following question. Computer Wheat US 1150 1150 China 1150 1450 China's opportunity cost of wheat is _____ computer? (hint: enter your answer in 2 decimal places)

Answer: .79

Suppose US and China are the only two countries in the world. Both countries can produce computer and wheat. The following table describes their maximum output per day. Use this table to answer the following question. Computer Wheat US 1800 1050 China 1200 1500 China's opportunity cost of wheat is _____ computer? (hint: enter your answer in 2 decimal places)

Answer: .80 How? (computer/wheat for China)

Suppose US and China are the only two countries in the world. Both countries can produce computer and wheat. The following table describes their maximum output per day. Use this table to answer the following question. Computer Wheat US 1500 1450 China 1100 1300 China's opportunity cost of wheat is _____ computer?

Answer: 0.85

Suppose US and China are the only two countries in the world. Both countries can produce computer and wheat. The following table describes their maximum output per day. Use this table to answer the following question. Computer Wheat US 1450 1350 China 1200 1300 US's opportunity cost of wheat is _____ computer? (hint: enter your answer in 2 decimal places)

Answer: 1.07

Suppose US and China are the only two countries in the world. Both countries can produce computer and wheat. The following table describes their maximum output per day. Use this table to answer the following question. Computer Wheat US 1500 1150 China 1100 1400 China's opportunity cost of computer is _____ wheat? (hint: enter your answer in 2 decimal places)

Answer: 1.27

Suppose US and China are the only two countries in the world. Both countries can produce computer and wheat. The following table describes their maximum output per day. Use this table to answer the following question. Computer Wheat US 1000 1200 China 1000 1300 China's opportunity cost of computer is _____ wheat? (hint: enter your answer in 2 decimal places)

Answer: 1.3

Suppose US and China are the only two countries in the world. Both countries can produce computer and wheat. The following table describes their maximum output per day. Use this table to answer the following question. Computer Wheat US 1000 1300 China 850 1500 China's opportunity cost of computer is _____ wheat? (hint: enter your answer in 2 decimal places)

Answer: 1.76 How? (wheat/computer for China = 1.76, no rounding was done.)

Factors of production are

inputs into the production process