Econ200N - Second Exam - Student Version B
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Econ200N - Second Exam - Student Version B

Course Number: ECON 200, Spring 2011

College/University: Washington

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University of Washington - Department of Economics Econ200N - Introduction to Microeconomics (Winter 2010) Second Exam Questions - Test Version B (February 17, Wednesday, 7-8:30pm) 1. In the absence of externalities, the ''invisible hand'' leads a market to maximize A) producer profit from that market. B) total benefit to society from that market. C) both equality and efficiency in that market. D) output of goods...

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of University Washington - Department of Economics Econ200N - Introduction to Microeconomics (Winter 2010) Second Exam Questions - Test Version B (February 17, Wednesday, 7-8:30pm) 1. In the absence of externalities, the ''invisible hand'' leads a market to maximize A) producer profit from that market. B) total benefit to society from that market. C) both equality and efficiency in that market. D) output of goods or services in that market. 2. When externalities are present in a market, the well-being of a market participants A) and market bystanders are both directly affected. B) and market bystanders are both indirectly affected. C) is directly affected, and market bystanders are indirectly affected. D) is indirectly affected, and market bystanders are directly affected. 3. Private markets fail to account for externalities because A) externalities don't occur in private markets. B) sellers include costs associated with externalities in the price of their product. C) decisionmakers in the market fail to include the costs of their behavior to third parties. D) the government cannot easily estimate the optimal quantity of pollution. 4. Which of the following is NOT an example of a negative externality? A) air pollution from a manufacturing plant. B) disrupted sleep from a neighbor's loud music. C) an illness caused by secondhand cigarette smoke. D) a decrease in your property value from neglecting your lawn and garden. 5. A paper plant produces water pollution during the production process. If the government forces the plant to internalize the negative externality, then the A) supply curve for paper would shift to the right. B) supply curve for paper would shift to the left. C) demand curve for paper would shift to the right. D) demand curve for paper would shift to the left. 6. Which of the following is true of markets characterized by positive externalities? A) Social value exceeds private value, and market quantity exceeds the socially optimal quantity. B) Social value is less than private value, and market quantity exceeds the socially optimal quantity. C) Social value exceeds private value, and market quantity is less than the socially optimal quantity. D) social value seldom exceeds private value; therefore, social quantity is less than private quantity. 7. Suppose that an MBA degree creates no externality because the benefits of an MBA are internalized by the student in the form of higher wages. If there are no government subsidies for MBAs, then which of the following statements is correct? A) The equilibrium quantity of MBAs will equal the socially optimal quantity of MBAs. B) The equilibrium quantity of MBAs will be greater than the socially optimal quantity of MBAs. C) The equilibrium quantity of MBAs will be less than the socially optimal quantity of MBAs. D) There is not enough information to answer the question. 8. Suppose that electricity producers create a negative externality equal to $5 per unit. Further suppose that the government gives a $5 per-unit subsidy to producers. What is the relationship between the equilibrium quantity and the socially optimal quantity of electricity to be produced? A) They are equal. B) The equilibrium quantity is greater than the socially optimal quantity. C) The equilibrium quantity is less than the socially optimal quantity. D) There is not enough information to answer the question. 9. The Coase theorem states that A) taxes are an efficient way for governments to remedy negative externalities. B) subsidies are an efficient way for governments to remedy positive externalities. C) industrial policies encourage technology spillovers. D) in the absence of transaction costs, private parties can solve the problem of externalities on their own. 10. A dentist shares an office building with a radio station. The electrical current from the dentist's drill causes static in the radio broadcast, causing the radio station to lose $10,000 in profits. The radio station could put up a shield at a cost of $30,000; the dentist could buy a new drill that causes less interference for $6,000. Either would restore the radio station's lost profits. What is the economically efficient outcome? A) The radio station puts up a shield, which it pays for. B) The radio station puts up a shield, which the dentist pays for. C) Neither the radio station nor the dentist purchase additional equipment. D) The dentist gets a new drill; it does not matter who pays for it. 11. Dick owns a dog whose barking annoys Dick's neighbor Jane. Suppose that the benefit of owning the dog is worth $700 to Dick and that Jane bears a cost of $500 from the barking. Assuming Dick has the legal right to keep the dog, a possible private solution to this problem is that A) Dick pays Jane $600 for her inconvenience. B) Jane pays Dick $650 to give the dog to his parents who live on an isolated farm. C) Jane pays Dick $800 to give the dog to his parents who live on an isolated farm. D) The current situation is efficient. 12. A corrective tax is also known as: A) a command-and-control regulation. B) a Coase tax C) a Pigouvian tax D) a Turnovsky tax 13. The old lyric ''the best things in life are free'' A) is not true for any goods. B) is even true for some goods that have a price. C) refers to goods provided by nature or the government. D) refers to goods provided by the market. 14. When goods do not have a price, which of the following primarily ensures that the good is produced? A) buyers B) sellers C) government D) the market 15. Goods that are excludable include both A) natural monopolies and public goods. B) public goods and common resources. C) common resources and private goods. D) private goods and natural monopolies. 16. Goods that are not rival in consumption include both A) private goods and common resources. B) natural monopolies and public goods. C) common resources and public goods. D) private goods and natural monopolies. 17. Which of the following goods is rival in consumption and excludable? A) a tornado siren. B) an uncongested toll road. C) a home. D) the environment. 18. Which of the following is a disadvantage of government provision of a public good such as national defense? (i) The government does not know the exact willingness of consumers to pay for the public good. (ii) The free-rider problem is more likely to occur when the government provides a public good than when the private sector provides a public good. (iii) Taxpayers do not agree on the optimal quantity of the public good that the government should provide. A) (i) only. B) (i) and (ii) only. C) (i) and (iii) only. D) (i), (ii), and (iii). 19. The local fire department wants to buy some new equipment at a cost of $1 million. If a human life is worth $10 million, the equipment is worth buying if it reduces the risk of someone dying in a fire over the life of the equipment by at least A) 1 percentage point. B) 5 percentage point. C) 7 percentage point. D) 10 percentage point. 20. Suppose that you want to put on a fireworks display in your hometown of 1,000 people this July. The cost of the display is $6,000, and each person values the display at $5. After a month, you have only sold 50 tickets at $5 each. The result is that A) the local government should put on the display, but you should not. B) you should still put on the display, but the local government should not. C) neither you nor the local government should put on the display. D) either you or the local government should put on the display. 21. When the value of a human life is calculated according to the economic contribution a person makes to society (as reflected in her income-earning potential), the troubling implication is that A) it is possible for a retired or disabled person to have no value to society. B) economists are more valuable than entrepreneurs. C) retired people who volunteer in their communities are more valuable than physicians. D) all workers have equal value. 22. Which of the following statements is not correct? A) Environmental degradation is an example of the Tragedy of the Commons. B) Cost-benefit analysis is an important tool that economists use to evaluate the benefits of providing a public good. C) Some goods, such as lighthouses, may be either private or public goods. D) The free-rider problem prevents governments from supplying public goods. 23. What causes the Tragedy of the Commons? (i) Social and private incentives differ. (ii) Common resources are not rival in consumption and are not excludable. (iii) Common resources are not excludable but are rival in consumption. A) (i) only. B) (ii) only. C) (i) and (ii) only. D) (i) and (iii) only. 24. On hot summer days, electricity-generating capacity is sometimes stretched to the limit. At these times, electric companies may ask people to voluntarily cut back on their use of electricity. On these days, electricity is A) excludable, but nonrival in consumption. B) not excludable, but rival in consumption. C) excludable and rival in consumption. D) not excludable and nonrival in consumption. 25. Industrial organization is the study of how A) labor unions organize workers in industries. B) profitable firms are in organized industries. C) industries organize for political advantage. D) firms' decisions regarding prices and quantities depend on the market conditions they face. 26. Economists normally assume that the goal of a firm is to (i) sell as much of their product as possible. (ii) set the price of the product as high as possible. (iii) maximize profit. A) (i) and (ii) are true. B) (ii) and (iii) are true. C) (iii) is true. D) (i) and (iii) are true. 27. Gordon is a senior majoring in computer network development at Smart State University. While he has been attending college, Gordon started a computer consulting business to help senior citizens set up their network connections and teach them how to use e-mail. Gordon charges $25 per hour for his consulting services. Gordon also works 5 hours a week for the Economics Department to maintain that department's Web page. The Economics Department pays Gordon $20 per hour. From this information we can conclude: A) Gordon should increase the number of hours he works for the Economics Department to make it comparable to his consulting business income. B) Gordon is obviously not maximizing his well-being if he continues to work for the Economics Department. C) If Gordon chooses one hour at the beach with his friends rather than spend one more hour with a consulting client, the forgone income of $25 is considered a cost of the choice to go to the beach. D) Both B) and C) are correct. 28. Janet used to work as a high school teacher for $40,000 per year but quit in order to start her own catering business. To invest in her factory, she withdrew $20,000 from her savings, which paid 3 percent interest, and borrowed $30,000 from her uncle, whom she pays 3 percent interest per year. Last year she paid $25,000 for ingredients and had revenue of $60,000. She asked Chris the accountant and Paul the economist to calculate her profit for her. A) Chris says her profit is $25,900, and Paul says her profit is $66,500. B) Chris says her profit is $35,000, and Paul says she lost $5,900. C) Chris says her profit is $34,100, and Paul says she lost $6,500. D) Chris says her profit is $34,100, and Paul says her profit is $34,100. 29. Lisa's firm experiences diminishing marginal product for all ranges of The inputs. total cost curve associated with Lisa's firm A) gets flatter as output increases. B) gets steeper as output increases. C) is constant for all ranges of output. D) is unrelated to the production function. 30. Which of the following statements about a production function is correct for a firm that uses labor to produce output? A) The production function depicts the relationship between the quantity of labor and the quantity of output. B) The slope of the production function measures marginal product. C) The slopes of the production function and the total cost curves are inversely related; if one is increasing, the other is decreasing. D) All of the above are correct. 31. Suppose that for a particular firm, the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that when the firms hires 2 workers, the total cost of production is $100. when the firm hires 3 workers, the total cost of production is $120. In addition, assume that the variable cost per unit of labor is the same regardless of the number of units of labor that are hired. What is the firm's fixed cost? A) $40 B) $60 C) $80 D) $100 32. Suppose Jay started up a small lemonade stand business last month. Variable costs for Jay's lemonade stand now include the cost of A) lemons and sugar. B) paper cups. C) the wages paid to his hourly workers. D) All of the above are correct. 33. Suppose that for a particular firm, the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that when the firm hires 4 workers, the firm produces 50 units of output. If the fixed cost of production is $4, the variable cost per unit of labor is $20, and the marginal product of labor for the fifth unit of labor is 2. What is the average total cost of production when the firm hires 5 workers? A) $2.00 B) $20.00 C) $20.80 D) $22.80 34. Alex is a minor-league baseball player. His current cumulative batting average is 0.270. Alex believes that if he can raise his cumulative battling average to 0.300, he will have a chance to play in the major leagues. Which of the following statements is correct? A) If Alex gets between 27 and 30 hits out of his next 100 at bats, he will be able to raise his cumulative batting average to 0.300. B) If Alex gets 30 hits out of his next 100 at bats, he will be able to raise his cumulative battling average to 0.300. C) Alex must get more than 30 hits out of his next 100 at bats in order to raise his cumulative batting average to 0.300. D) Either B) or C) could be correct. 35. Which of the following statements is correct? A) If marginal cost is rising, then average total cost is rising. B) If marginal cost is rising, then average variable cost is rising. C) If average variable cost is rising, then marginal cost is minimized. D) If average total cost is rising, then marginal cost is greater than average total cost. 36. When a firm is experiencing diseconomies of scale, A) long-run average total cost is minimized. B) long-run average total cost is greater than long-run marginal cost. C) long-run average total cost is less than long-run marginal cost. D) long-run marginal cost is minimized. 37. The study of how the allocation of resources affects economic well-being is called A) consumer economics. B) macroeconomics. C) willingness-to-pay economics. D) welfare economics. 38. A consumer's willingness to pay directly measures A) the extent to which advertising and other external forces have influenced the consumer's preferences. B) the cost of a good to the buyer. C) how much a buyer values a good. D) consumer surplus. 39. In which of the following circumstances would a buyer be indifferent about buying a good? A) The amount of consumer surplus the buyer would experience as a result of buying the good is zero. B) The price of the good is equal to the buyer's willingness to pay for the good. C) The price of the good is equal to the value the buyer places on the good. D) All of the above are correct. 40. A demand curve reflects each of the following except the A) willingness to pay of all buyers in the market. B) value each buyer in the market places on the good. C) highest price buyers are willing to pay for each quantity. D) ability of buyers to obtain the quantity they desire. 41. Consumer surplus A) is the amount of a good that a consumer can buy at a price below equilibrium price. B) is the amount a consumer is willing to pay minus the amount the consumer actually pays. C) is the number of consumers who are excluded from a market because of scarcity. D) measures how much a seller values a good. 42. On a graph, consumer surplus is represented by the area A) between the demand and supply curves. B) below the demand curve and above price. C) below the price and above the supply curve. D) below the demand curve and to the right of equilibrium price. 43. In a market, the marginal buyer is the buyer A) whose willingness to pay is higher than that of all other buyers and potential buyers. B) whose willingness to pay is lower than that of all other buyers and potential buyers. C) who is willing to buy exactly one unit of the good. D) who would be the first to leave the market if the price were any higher. 44. A drought in California destroys many red grapes. As a result of the drought, the consumer surplus in the market for red grapes A) increases, and the consumer surplus in the market for red wine increases. B) increases, and the consumer surplus in the market for red wine decreases. C) decreases, and the consumer surplus in the market for red wine increases. D) decreases, and the consumer surplus in the market for red wine decreases. 45. Which of the following will cause a decrease in consumer surplus? A) an increase in the number of sellers of the good. B) a decrease in the production cost of the good. C) sellers expect the price of the good to be lower next month. D) the imposition of a binding price floor in the market. 46. A supply curve can be used to measure producer surplus because it reflects A) the actions of sellers. B) quantity supplied. C) sellers' costs. D) the amount that will be purchased by consumers in the market. 47. A seller's willingness to sell is A) measured by the seller's cost of production. B) related to her supply curve, just as a buyer's willingness to buy is related to his demand curve. C) less than the price received if producer surplus is a positive number. D) None of the above is correct. E) All of the above are correct. 48. Which of the following will cause a decrease in producer surplus? A) the imposition of a binding price ceiling in the market. B) an increase in the number of buyers of the good. C) income increases and buyers consider the good to be normal. D) the price of a complement decreases. 49. Total surplus in a market will increase when the government A) imposes a tax on that market. B) imposes a binding price floor on that market. C) removes a binding price ceiling from that market. D) None of the above is correct. 50. To fully understand how taxes affect economic well-being, we must compare the A) benefit to buyers with the loss to sellers. B) price paid by buyers to the price received by consumers. C) profits earned by firms to the losses incurred by consumers. D) decrease in total surplus to the increase in revenue raised by the government. 51. A tax affects A) buyers only. B) sellers only. C) buyers and sellers only. D) buyers, sellers, and the government. 52. When a good is taxed, A) both buyers and sellers of the good are made worse off. B) only buyers are made worse off, because they ultimately bear the burden of the tax. C) only sellers are made worse off, because they ultimately bear the burden of the tax. D) neither buyers nor sellers are made worse off, since tax revenue is used to provide goods and services that would otherwise not be provided in a market economy. 53. If T represents the size of the tax on a good and Q represents the quantity of the good that is sold, total tax revenue received by government can be expressed as A) T/Q B) T+Q C) TxQ D) (TxQ)Q 54. When the price of a good is measured in dollars, then the size of the deadweight loss that results from taxing that good is measured in A) units of the good that is is being taxed. B) units of a related good that is not being taxed. C) dollars. D) percentage change. 55. Which of the following quantities decrease in response to a tax on a good? A) the equilibrium quantity in the market for the good, the effective price of the good paid by buyers, and consumer surplus. B) the equilibrium quantity in the market for the good, producer surplus, and the well-being of buyers of the good. C) the effective price received by sellers of the good, the wedge between the effective price paid by buyers and the effective price received by sellers, and consumer surplus. D) None of the above is necessarily correct unless we know whether the tax is levied on buyers or on sellers. 56. For a good that is taxed, the area on the relevant supply-and-demand graph that represents government's tax revenue is A) smaller than the area that represents the loss of consumer surplus and producer surplus caused by the tax. B) bounded by the supply curve, the demand curve, the effective price paid by buyers, and the effective price received by sellers. C) a right triangle. D) a triangle, but not necessarily a right triangle. 57. Suppose a tax of $3 per unit is imposed on a good. The supply curve is a typical upward-sloping straight line, and the demand curve is a typical downward-sloping straight line. The tax decreases consumer surplus by $3900 and decreases producer surplus by $3000. The tax generates tax revenue of $6000. The tax decreased the equilibrium quantity of the good from A) 2000 to 1500. B) 2400 to 2000. C) 2600 to 2000. D) 3000 to 2400. 58. Which of the following statements is correct regarding the imposition of a tax on gasoline? A) The incidence of the tax depends upon whether the buyers or the sellers are required to remit the tax payments to the government. B) The incidence of the tax depends upon the price elasticities of demand and supply. C) The amount of tax revenue raised by the tax depends upon whether the buyers or the sellers are required to remit tax payments to the government. D) The amount of tax revenue raised by the tax does not depend upon the amount of the tax per unit. 59. Other things equal, the deadweight loss of a tax A) decreases as the size of the tax increases. B) increases as the size of the tax increases, but the increase in the deadweight loss is less rapid than the increase in the size of the tax. C) increases as the size of the tax increases, and the increase in the deadweight loss is more rapid than the increase in the size of the tax. D) increases as the price elasticities of demand and/or supply increase, but the deadweight loss does not change as the size of the tax increases. 60. Which of the following ideas is the most plausible? A) Reducing a high tax rate is less likely to increase tax revenue than is reducing a low tax rate. B) Reducing a high tax rate is more likely to increase tax revenue than is reducing a low tax rate. C) Reducing a high tax rate will have the same effect on tax revenue as reducing a low tax rate. D) Reducing a tax rate can never increase tax revenue.

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Software Architecture & Design Course Project 1 KWIC SOFTWARE ARCHITECTURE FOR WEB-BASED SERACH ENGINEInstructor : Dr. Lawrence ChungChangcheng Li Zhijun Zou Jian Zhu 02/28/2002CS6362 Architecture Design Project ISpring 20021. INTRODUCTION 2. TEAM OR
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Programming TechniquesR. Morris EditorOn the Criteria To Be Used in Decomposing Systems into ModulesD.L. Parnas Carnegie-Mellon UniversityThis paper discusses modularization as a mechanism for improving the flexibility and comprehensibility of a syste
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3. Decomposition Into ModulesJan Bredereke: SCS4: Engineering of Embedded Software Systems, WS 2002/03Overview of Chapter 3163Overview of Chapter 3: Decomposition Into Modules3.1 the criteria to be used in decomposing systems into modules 3.2 structu
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Running head: STORY OF MY PEOPLE1StoryofmyPeople SusanLovejoy ETH/125 10/24/2010 ElizabethKazsukSTORY OF MY PEOPLE2My name is Mary Whitecloud, and I am a Cherokee which comes from the word Muskogee which means, Speakers of another language. The Chero
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Super Sonic Smoothie: A Partnership with Innocent DrinksSuper Sonic Smoothie: A Partnership with Innocent Drinks Carmen Lozada Kaplan University MT-330-01 January 18, 2011Abstract Sonic Smoothie has enjoyed success in the United States due to its unique
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at at PRE positionsWhatisaPREPOSITION? WhatisaPREPOSITION?Aprepositionlinksnouns,pronounsandphrasestootherwordsina sentence.Thewordorphrasethattheprepositionintroducesiscalledthe objectofthepreposition.nou nIforgotmybookat ion Object home. sitphrase
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General Physics 2 HW 4 Due Wednesday, February 23 1. NASA has asked your team of rocket scientists about the feasibility of a new satellite launcher that will save rocket fuel. NASA's idea is basically an electric slingshot that consists of 4 electrodes a
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Practice for Lab, chapter 261. You have a summer job with the telephone company investigating the vulnerability of underground telephone lines to natural disasters. Your task is to write a computer program that will be used determine the possible harm to
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In lab Circuits HW1. While trying to find the power ratings of your appliances you find their circuit diagrams. Looking them over, your friend believes there must be a typo in the circuit diagram of your toaster. The heating element that toasts the bread
University of Phoenix - HCR - 240
Running head: PERSONALIZED NUTRITION AND EXERCISE PLAN1Personalized Nutrition and Exercise Plan Angel Reed SCI/241 March 20, 2011 Dr. DiegelPERSONALIZED NUTRITION AND EXERCISE PLAN Personalized Nutrition and Exercise Plan2Nutrition is not something t
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- On the pairing energy term in the semi-empirical mass formula2010. 11. - On the pairing energy term in the semi-empirical mass formula2010. 11. :() . .2010 ( ) ( ) ( ) ( )1935 - .
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Empirical predictions of yrast energies in even-even nucleiGuanghao Jina , Dooyoung Kimb , Byeongnoh Kimb , Jin-Hee Yoonb, Dongwoo Chab,a Departmentof Fundamental Subject, Tianjin Institute of Urban Construction, Tianjin 300384, Peoples Republic of Chi
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Three-dimensional quantum electrodynamics as an eective interactionE. Abdalla CERN, Theory Division, CH-1211 Geneva 23, SwitzerlandarXiv:hep-th/9511132v1 17 Nov 1995International Centre for Theoretical Physics - ICTP 34100 Trieste, Italy and F. M. de C
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New Physics: Sae Mulli (The Korean Physical Society), Volume 61, Number 2, 2011 2, pp. 157164 4 ZDOI: 10.3938/NPSM.61.157_[ SW 7T$-T~z 670-nm Nd:GdVO4 /LBO 7[ c R Xt _T$8 X V l @; 8 6? 8 _)] # ] T ; KB/< < F/@ , p 730-701 N (2010 11 5cfw_ ~6, 2011
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HH 7 Sae Mulli (The Korean Physical Society), Volume 50, Number 5, 2005 5, pp. 323328 4 ZELTB UX TA 4 BEC V?8 R ;U s Nkp 0 X m s 0 m c. s ' c c c > * +* *.H < < /< < @ o, 402-751 t ; (2004 12 9cfw_ ~6, 2005 4 26cfw_ 7 ~6) 4 Z 9 4 xr Z 9 j: 1995 JILA
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Journal of the Korean Physical Society, Vol. 46, No. 6, June 2005, pp. 13361341Energy per Particle in BEC for87Rb and 7 LiDooyoung Kim, Guanghao Jin and Jin-Hee YoonDepartment of Physics, Inha University, Incheon 402-751 (Received 4 January 2005, in
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Journal of the Korean Physical Society, Vol. 56, No. 1, January 2010, pp. 2833Empirical Formula Extended to the Yrast Excitation Energies of the Unnatural Parity States in Even-Even NucleiDooyoung Kim, Jin-Hee Yoon and Dongwoo ChaDepartment of Physics,
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New Physics: Sae Mulli (The Korean Physical Society), Volume 60, Number 2, 2010 2, pp. 113118 4 ZDOI: 10.3938/NPSM.60.113ll? c c ce R n 0 b-b cfw_;" V V?8 Yrast ;U; 6 m m ; s p c.c X 8X OMk ] c 6 > * *.H B < /< < @ o, 402-751 t ; (2010 1 13cfw_ ~6
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() / : ( ) : : : 1027* 20101119 0 400,000 0 400,000 *() 0 * .2010 12 17* .
Seoul National - PHYSICS - 116
3.7 The Kepler Problem: Inverse-Square Law Force The equation of the orbit becomesInverse square law force:F(r) = -k/r2; V(r) = -k/rNewtons Universal Law of Gravitation F = Gm1m2/r2; Coulombs Law: F = keq1q2/r2;' 1 mk $ 2 El 2 &1 + 1 + = cos(" # " ' )