Download ECON 160, Trial Exam

ECON 160: The following is an example of the kinds of questions asked on exams.
The exam will be longer.
Copy # _____
Spring 2009
Prof. Tontz
ECONOMICS
Trial Exam
Name: ______________________
Signature: ______________________
Please write your name on both the exam, and your scantron form and sign your exam.
Also, write your examination copy number on your scantron form, directly after your
name.
The examination is divided into four sections. Record answers to Sections I and II on
your scantron form and answers to Section III and IV on your examination. Answer all
questions in accordance with economic theory.
SECTION I: True or False. (10 points) On your scantron form indicate if each of
the following statements is either (a) True or (b) False.
1.
The existence of scarcity is caused by the inefficient use of resources.
2.
In Economics, we assume that households base their decisions on attempting to
maximize income.
3.
If the price of a good rises, the demand for a substitute good shifts to the right.
4.
Market Demand determines price, and the price determines the individual amount
demanded.
5.
As the demand for a good increases, the suppliers are able to use more costly
resources, and are therefore willing to increase the quantity supplied.
SECTION II: Multiple Choice (9 points). For each of the following statements, indicate
the BEST answer on your scantron form.
6.
If a good is scarce,
a. it must be rationed in some way.
b. more of it must be produced.
c. there cannot be too much of it produced.
d. it can be a free good by lowering its money price to zero.
e. none of the above.
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(questions continue on the reverse side)
7.
The opportunity cost concept in economics implies that:
a. the cost of any action will always depend upon the available alternatives.
b. costs can change simply because people's preferences change.
c. the cost of obtaining any good is the highest value of the alternatives
sacrificed in order to obtain it.
d. all of the above are true.
8.
As a person acquires more of a good for consumption in a given time period, the
person's personal marginal valuation of that good,
a.
b.
c.
d.
e.
falls relative to other goods.
increases because he or she has a larger total amount of the good.
is unaffected.
is a concept of no use.
none of the above.
SECTION III: Short Answer.(xx points) Answer each of the following questions in the
space provided on the exam.
1.
(6) List three assumptions that form the basis of the production possibilities
function.
a. _____________________________________________________________
b. _____________________________________________________________
c. _____________________________________________________________
2.
(6) Draw a production possibilities function. label the axes. What does the slope
represent? Why is it shaped the way it is?
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3.
(8) Using the market model, (Demand & Supply) explain why and how the
following problems are eliminated.
a. Surplus: ________________________________________________________
_________________________________________________________________
b. Shortage: _______________________________________________________
_________________________________________________________________
SECTION IV: Computational. (xx points) Answer the following questions on the exam.
1. Opportunity cost in production; specialization : The following four separate
resources can produce either of the listed alternative outputs per day.
Resource
A.
B.
C.
D.
X output or Y output
20
100
50
100
50
200
25
150
a. Calculate the economic cost of one X for each.
b. Calculate the economic cost of one Y for each.
c. If X sells for $3.00 and Y sells for $ 1.00, decide what you would have each produce
and calculate the total output of X and Y.
2. The following is the demand for a good.
Price Quantity
Total Revenue
$ 20
4
________
$ 18
6
________
$ 16
8
________
$ 14
10
________
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a. Calculate exchange value ( total revenue) for each price above.
b. If the price is $16.00, what amount will be sold ? ________
c. What is the marginal value of the 10th unit? __________
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