BSNS 113 FINAL EXAM WITH CORRECT 60+
QUESTIONS WITH CORRECTRY ANALYZED
ANSWERS (ACTUAL EXAM) ALREADY
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In New Zealand, the government agency charged with ensuring market
competitiveness is the - ANSWERS-Commerce Commission.
Refering to the above figure, which arrow represents the flow of factors of
production? - ANSWERS-C
Refering to the above figure, which arrow represents the flow of household
expenditures? - ANSWERS-A
Suppose that to sit an exam you had to take three hours off from your tele-
marketing job that you do from home. The job pays $30 per hour. As well,
because you live on the other side of town, you had to pay $10 in total for buses
,to get to the exam and back. You had to bring a pencil, which you already owned.
What is the opportunity cost to you of sitting this exam? - ANSWERS-$100 plus a
few cents for the 'wear-and-tear' to your pencil.
After leaving high school, Sandra considered three options for what to do next,
listed in order of preference:
(1) attend Otago University,
(2) work at Speights brewery in Dunedin, or
(3) attend Auckland University.
Sandra's opportunity cost of attending Otago Uni is the - ANSWERS-direct cost of
attending Otago Uni (fees, books, etc.) plus the income and work experience she
could have earned at the brewery.
Which of the following is most likely a macroeconomic topic? - ANSWERS-The role
of the Reserve Bank in controlling inflation.
Consider the following two statements:
Humans tend to have effectively unlimited wants for goods and services.
Humans should limit their consumption for the sake of the environment.
Which of the following is true? - ANSWERS-(i) is a positive statement and (ii) a
normative statement.
You paid $100 for a ticket (which is non-refundable) to go to a concert on
Saturday night. Your boss calls Saturday afternoon to see if you're willing to work
,for three hours that night. She'll pay you $20 per hour instead of your usual $10.
What is your opportunity cost if you choose to go to the concert? - ANSWERS-$60
Imagine a country where it is not yet compulsory to wear seat belts in cars. If
wearing seat belts was made compulsory, this is likely to - ANSWERS-lead to more
injuries to cyclists
The slope of the production possibilities frontier (PPF) - ANSWERS-should be
interpreted as the opportunity cost of a one unit increase in production of the
good measured on the horizontal axis.
What effect did the destructive earthquake that hit Christchurch in 2011 likely
have on New Zealand's PPF? - ANSWERS-It shifted the PPF inward.
Refer to Figure 1. Which of the points on the diagram represent technically
feasible combinations of goods and services producible in New Zealand? -
ANSWERS-A, B and C only
Refer to Figure 1 in the previous question. Which of the points on the diagram
represent combinations of goods and services that require technically efficient
production methods? - ANSWERS-A and B
There are 'gains from trade' because the productivity of resources varies -
ANSWERS-due to all of the types of variation in answers (1), (2), and (3) above.
- geographically, with the scale of production, across resources units of the same
type (e.g. labour).
, Economies of scale refers to - ANSWERS-the decrease in minimum average
production cost as the firm expands capacity to increase output per time period.
Consider a production process that benefits from economies of scale. Suppose
that the price of labour (the wage rate) increases. In that case, the long-run
average production cost curve will - ANSWERS-shift up, but possibly by less than
the change in the wage rate times the number of labour hours because the firm
will have time to substitute other inputs, e.g., automation, for higher-cost labour.
Refer to Figure 1. The opportunity cost of producing each tonne of beef in Peru is
- ANSWERS-3 tonnes of fruit.
Refer to Figure 1. Argentina has an absolute advantage in production of -
ANSWERS-both fruit and beef.
Refer to Figure 1. Assuming trade between the countries, Peru is likely to export -
ANSWERS-fruit
Refer to Figure 1. Suppose the cattle breeders in Argentina selectively breed
cattle that process grass more efficiently; these new cattle put on more muscle
(i.e. beef) while eating the same amount of grass. As a result, Argentina's PPF -
ANSWERS-pivots outward so that it gets flatter (i.e. the slope decreases).
Refer to Table 1. Note that the numbers in the table refer to the number of hours
to produce one unit of food or clothes.
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