Practice Mid-term

Practice Mid-term - Instructor Ari Belasen Economics 160...

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Instructor Ari Belasen Economics 160 Spring 2005 Midterm #1 Answer all of the following questions. The weight of each section is listed below, with a total score of 40. You have 1 hour to complete the exam. Manage your time well. Good luck! I. Multiple Choice: (10) Circle the correct response. 1. Which of the following will shift the demand of Toyotas to the left? (a) (a) An increase in the population (b) (b) An increase in the price of Hondas (c) (c) A decrease in the price of umbrellas (d) (d) None of the above 2. If the price elasticity of a good is 1.50, that means: (a) (a) Demand will increase 1.50% when price increases by 1.50% (b) (b) Demand will decrease 1.50% when price increases by 1.50% (c) (c) Demand will increase 1.50% when price increases by 1.00% (d) (d) Demand will decrease 1.50% when price increases by 1.00% 3. Given a demand curve: Q D = 10 – P; and a supply curve: Q S = 2 + 3P; P * = (a) (a) 1 (b) (b) 2 (c) (c) 3 (d) (d) 4 4. Given those same curves in 3. Q * = (a) (a) 6 (b) (b) 7 (c) (c) 8 (d) (d) 9
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5. A perfectly competitive firm will go out of business if prices are lower than: (a) (a) Marginal costs (b) (b) Average variable costs (c) (c) Average total costs
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Practice Mid-term - Instructor Ari Belasen Economics 160...

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