Ec1101E Introduction to Ecnomic Analysis Mid Term Paper

National University of Singapore

EC1101E: Introduction To Economic Analysis

Mid-Term Test
Semester 1 (2009/2010)

Answer all questions.

|Production Possibilities of Motorcycles and Cars |
|Combination |Motorcycles |Cars |
|A |0 |6 |
|B |15 |5 |
|C |25 |4 |
|D |33 |3 |
|E |39 |2 |
|F |42 |1 |
|G |43 |0 |

1. Refer to the table above. The opportunity cost of producing the first car is

a. 15 motorcycles. b. 43 motorcycles. c. 42 motorcycles. d. 1 motorcycle.
(d)

2. Refer to the same table in question 1. A combination of 20 motorcycles and 2 cars

a. requires an infusion of technological know-how. b. illustrates underemployment of resources. c. is possible only with full and efficient use of all resources. d. is unattainable because it requires resources that are not available. (b)

3. You are thinking about going to the movies tonight to watch Fame. A ticket costs $9 and you will have to cancel your job that pays $30. The economic cost of watching the movie is

a. $9 b. $30 c. $39 d. $39 minus the benefit of watching the movie. (c) 4. Your