Sample Exam: Principles of Microeconomics ECO 2023 Fall 2010

Name___________________________________ Panther ID______________________________

Instructions: 1. Please write in your name and Panther ID on the question paper. 2. Please Bubble in your name and Panther ID on the Scantron Sheet. 3. Use a pencil for Scantron Sheet. 4. There are 20 Multiple Choice Questions, Choose the best option.

Good Luck!! MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The attainable production points on a production possibility curve are: 1) _______ A) the points outside the area enclosed by the production possibilities frontier. B) the horizontal and vertical intercepts. C) the points along and inside the production possibility frontier. D) the points along the production possibilities frontier.

2) Assumed with a production possibilities frontier is that: A) the level of technology is fixed and unchanging. B) only two outputs are produced. C) any level of output is currently possible. D) labor, capital, and natural resources are fixed and unchanging.

2) _______

3) If your tuition for this term is $5,000, room and board this term is $3,000, books this term are $500, and you can only work part-time while in school and earn $4,000 rather than $10,000 during the term, then your opportunity costs of college this term is: A) $8,500. B) $11,500. C) $5,500. D) $14,500.

3) _______

4) If George can mow 10 lawns or cultivate 5 gardens a day while Jack can mow 6 lawns or cultivate 4 gardens a day, then: A) Jack has a comparative advantage in lawn mowing. B) Jack has an absolute advantage in both lawn mowing and garden cultivating. C) Jack has a comparative advantage in garden cultivating. D) All of the above are correct.

4) _______

5) If nation A can produce 20 power plants and 16 ships, while nation B can produce 18 power plants and 12 ships, then A's opportunity cost to produce a unit of power plants is: A) 8 ships.

5) _______

B) 0.8 ships. C) 16 ships. D) impossible to determine without more information.

Refer to Figure 8.1 for the questions below.

Figure 8.1 6) In figure 8.1 without trade the people of the country consume and produce: A) Q1. B) Q2. C) Q3. D) none of the above. 6) _______

7) In figure 8.1 with free trade the people of the country produce: A) Q1. B) Q2. C) Q3. D) none of the above.

7) _______

8) In figure 8.1 with free trade the people of the country: A) export Q3-Q1. B) import Q3-Q1. C) import Q2-Q1.

8) _______ D) export Q2-Q1.

9) A tariff leads to: A) more revenue for the tariff imposing government. B) a higher domestic price. C) a domestic deadweight loss. D) all of the above.

9) _______

10) A characteristic of the long run is: A) there are no fixed inputs. B) plant capacity can be increased or decreased. C) all inputs can be varied. D) all of the above.

10) ______

11) Implicit costs of production are also called: A) variable costs. C) direct costs.

11) ______ B) overhead. D) opportunity costs.

12) If 11 workers can produce a total of 54 units of a product and another worker has a marginal product of six, then the average product of 12 workers is: A) 60. B) 48. C) 5. D) 54.

12) ______

Refer to Figure 10.2 for the questions below.

Figure 10.2 13) In figure 10.2, the difference between average total costs and average variable costs is: A) marginal costs. B) fixed costs. C) sunk costs. D) average fixed costs. 13) ______

14) If the market price is $25, the average revenue of selling five units is: A) $5. B) $12.50. C) $25.

14) ______ D) $125.

15) If the market price is $25 in a competitive market, the marginal revenue from selling the fifth unit is: A) $125. B) $12.50. C) $25. D) $5.

15) ______

16) If a perfectly competitive seller is producing at an output where price is $114 and the marginal cost is $114, what should the seller do to maximize profits? A) Produce a smaller output. B) Continue to produce the current output. C) Not enough information is given to answer the question. D) Produce a larger output.

16) ______

Refer to Figure 11.1 for the questions below.

Figure 11.1 17) At price P1, the firm in figure 11.1 would produce: A) zero. B) Q5. 17) ______ C) Q3. D) Q6.

18) At price P4 in the long run, the industry including the firm in figure 11.1 would: A) remain the same size. B) have exit of some existing firms. C) have entry of new firms. D) cease to exist. Read the following problem for the following questions: Suppose A farner and a racncher each work 8hrs per day and can devot this time to growing potatoes, raising cattle, or a combination of the two. The following table shows the amount of time each person requires 1 unit of each good. Minutes needed to Amount Make 1 unit of: Produced in 8hrs __________________________________________________________________ ________ Meat Potatoes Meat Potatoes __________________________________________________________________ ________ Farmer 60min/unit 15min/unit 8units 32units

18) ______

Rancher 20min/unit 10min/unit 24units 48units __________________________________________________________________ _________ Now answer the following questions: 19) If the firmer does't want to have trade with Rancher and if dedicted 4 hrs for each work , how much quantiy he can he produce meat and potatoes. A) 16,4 B) 4,4 C) 8,8 D) 4,16

14) ______

20) If the Rancher does't want to have a trade with farmer and he decided to work 6 hrs on cattel(for meat production) and 2 hrs on potatoes, how much meat and potatoes can he produce? A) 0,12 B) 18,12 C) 12,18 D) 18,18 1) C 2) C 3) B 4) A 5) B 6) B 7) A 8) B 9) D 10) D 11) D 12) C 13) D 14) C 15) C 16) B 17) A 18) C 19)D 20) B

15) ______