1-) Which is the most accurate definition of the study of ...
|Izmir University of Economics | |
|Summer 2006 | |
|ECON 101 | |
PROBLEM SET 1
1-) Which is the most accurate definition of the study of economics? Economics is the study of …….
a. The distribution of surplus goods to those in need.
b. Affluence in a morally bankrupt world.
c. The choices we make because of scarcity.
d. Ways to reduce wants to eliminate the problem of scarcity.
2-) What are the three basic economic problems that every economy faces?
3-) Consider a constant-slope production possibilities frontier with a vertical intercept of 40 potatoes and a horizontal intercept of 20 tomatoes. The opportunity cost of increasing tomato output from 10 to 11 is
a. ½ potato
b. 2 potatoes
c. 1 potato
d. 4 potatoes
e. can not be determined from the information given.
4-) Indicate whether each of the following statements applies to microeconomics or macroeconomics:
a. The unemployment rate in France was 4.2 percent in January 2001.
b. Arçelik laid off 15 workers last month.
c. An unexpected freeze in Antalya reduced the citrus crop and caused the price of oranges to rise.
d. U.S. output, adjusted for inflation, grew by 5 percent in 2000.
e. Sudden shift in interest from skiing to skating increased the price of skateboards.
f. As a profit-maximizing firm, Alpha Food is producing 2000 cans of food per month.
5-) Which of the following is a normative statement?
a. Galatasaray has won its 8th games this year after the match against Trabzonspor.
b. The Consumer Price Index rose three-tenths of one percent in May
c. In January, the average temperature in Çeşme exceeds the average temperature in Bodrum
d. Fenerbahçe needs a better manager even they scored 6 goals in the last match.
e. Turkey’s trade deficit reached an all-time high last year
7) Agricultural goods
.E
.C
.A
.D
.B
Industrial goods
The diagram above shows the production possibility boundary for the country with full employment of a given size force. According to the diagram, if the country is currently producing at point A, it can produce more industrial goods by moving to point
a) E b) D c) B d) C
Which point above shows an impossible combination of the two goods.
a) E b) D c) B d) C
Which point above shows an inefficient combination of the two goods.
a) E b) D c) B d) C
8) Case & Fair page 41 questions 6 and 8.
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