Economics Exam Worksheet With Answers - Second Midterm (Version B) Page 7
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1713. (variation on old question) Fabian wants to get exactly 70% on the final. Fabian produces
the exam score using two inputs: hours of study time and milligrams of a drug that helps
him to concentrate. Which of the following statements is both necessarily correct and
most informative
A) His isoquant for producing the 70% score identifies all the different ways he would
like to achieve a 70% score.
B) His isoquant for producing a 70% result is the rate at which he can substitute study
hours for milligrams of drugs in the production of the 70% score
C) His isoquant for producing a 70% result identifies all those combinations of study
hours and milligrams of drugs that will just get him a score of 70%.
D) His indifference curve for producing the 70% result identifies all those combinations
of study hours and milligrams of drugs that will just get him a score of 70%.
14. (Zach) Cutty takes 8 hours to train an employee and 3 hours to sell a package. Avon takes
5 hours to train an employee and 2 hours to sell a package. Which of the following is true?
A) Cutty has an absolute advantage in selling packages
B) Cutty has an absolute advantage in training employees
C) Avon has a comparative advantage in training employees
D) Avon has a comparative advantage in selling packages.
15. (new question from Edward) A production function is a mathematical function that
identifies the maximum output associated with any combination of inputs.
A) The statement is correct and is the definition of a production function.
B) This statement is incorrect.
16. (variation on old question.) Jim is a stalwart Republican; he works a steady job, has a wife
and two kids, and lives in the suburbs. He hates Obamacare so much that he ranks every
state-of-the-world without Obamacare over every state of the world with Obamacare.
Given this, Jim would prefer that the wife and kids starve in a world without Obamacare
rather than he live in a world with Obamacare and plenty to eat.
A) No
B) Maybe he would, maybe he would not.
C) Yes
Version B
Page 7
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