Ag Econ 1042 Name _______________________________
First Exam, 130 points 11 a.m. Section
February 18, 2010
True/False – one point each
1. Economic growth tends to make people worse off.
2. An increase in output per person is the same as an increase in productivity.
3. A production possibilities curve or frontier represents the combination of goods
that could be produced.
4. Opportunity cost is what we pay for a good minus any coupons or rebates.
5. Demand is a schedule of quantities the consumers will choose at various prices.
6. An increase in technology will shift out the production possibilities curve by
increasing the productivity of resources.
7. Ben Bernanke holds a powerful economic position but Dauve likely possesses a
comparative advantage in the teaching of Ag Econ 1042.
8. The key to possessing a comparative advantage is a higher opportunity cost.
9. Productivity gains can help prevent inflation.
10. Consumer prices rose approximately 7.0% in 2009.
11. Unemployment tends to fall in the U.S. when profits and income are rising.
12. An increase in the demand for fast food will shift the supply curve to the left.
13. Regions trade products to save resources, gain income and make the traders
better off.
14. Regulations affecting the construction or operation of oil refining facilities will
reduce domestic supply.
15. An increase in the demand for the output of the computer industry will cause an
increase in their demand for labor.
16. Net job losses continue a year long decline.
17. The government currently pays about 50% of U.S. health care costs.
18. The U.S. debt has increased annually for 30 years with only a few exceptions at
the end of the 20th century.
19. Improvements in agricultural technology, which lead to increased agricultural
production, result in lower cash receipts for farmers if demand is inelastic.
20. An increase in the demand for soybeans in the European Union would likely
result in increases in exports of U.S. produced soybeans.
21. The U.S. deficit is expected to hit an all time high before it drops.
22. The FED is mildly optimistic about U.S. economic growth.
23. Excess supply is potential output that is realized at higher prices.
24. Trade, while good for sellers, is rarely beneficial for buyers.
25. An equilibrium price is also called a market-clearing price because that is the
one price where buyers and sellers agree on the quantity to exchange.
26. The goal of a business is to produce a good at the lowest cost possible.
27. A flood that removes land from production would reduce the demand for grain.
28. Opportunity cost refers to the monetary cost of an activity.
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