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The questions and answers for the first exam of ag econ 1042, an introductory economics course. The exam covers topics such as economic growth, productivity, opportunity cost, demand, supply, and international trade. Students are expected to answer true/false and multiple choice questions, as well as provide short answers for some questions.
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Ag Econ 1042 Name _______________________________ First Exam, 130 points 11 a.m. Section February 18, 2010 True/False – one point each
Multiple choice – two points each _____ 29. The inevitable cost of protecting domestic industries from foreign competition is a) lower prices for foreign consumers b) higher prices for domestic consumers c) higher prices for domestic sellers d) all of the above _____ 30. According to the principle of comparative advantage, worldwide output and consumption levels are highest when goods are produced where a) opportunity costs are lowest b) inflation rates are low c) wages are lowest d) GDP is falling _____ 31. The Chairman of the Board of the Federal Reserve System is currently a) Joe Biden b) John Maynard Keynes c) Paul Volcker d) Alan Greenspan e) Ben Bernanke _____ 32. Ceteris paribus means a) to each according to his need b) something for something in return; payback c) production is the source of wealth d) others things being equal _____ 33. A recession results in a sharp decrease in consumers’ disposable income. Automobiles are a normal good. Other things being equal, it is likely that a) the quantity of automobiles demanded will stay the same b) the demand for automobiles will increase c) the quantity of automobiles demanded will increase d) the demand for automobiles will decrease e) all of the above _____ 34. The demand is said to be ____________________ when the quantity is very responsive to changes in price. a) independent b) inelastic c) elastic d) flexible