ECON 102 MIDTERM (A)

ECON 102 MIDTERM (A) - TYPE A[ECON 102 Answer Key for...

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[ECON 102] Answer Key for Midterm Thursday, March 17, 2005 QUESTION ANSWER 1 D 2 E 3 A or E 4 B 5 C 6 D 7 B 8 B 9 E 10 A 11 D 12 D 13 C 14 C 15 A 16 E 17 D 18 B 19 A 20 A 21 B 22 B 23 A 24 A 25 B TYPE A
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[1-17] PART 1: MULTIPLE CHOICE QUESTIONS 1. The demand for the Nike shoes is given in the table below. We assume income and the prices of substitute and complement goods do not change. Which of the following statements is false ? (Note: use arc formula for calculating elasticity) 2. Suppose the labor market is in the equilibrium and the labor supply is perfectly inelastic and fixed while demand for labor is downward sloping. If a severe recession occurs, which of the following statements is correct? A. The labor demand curve will shift to the right. B. The equilibrium wage will increase. C. The equilibrium level of labor will decrease. D. Due to the wage contract binding, the wage cannot adjust rapidly, so there is a shortage of labor, which creates unemployment. E. Due to the wage contract binding, the wage cannot adjust rapidly, so there is an excess labor supply, which creates unemployment. 3. Under Pareto optimality, which of the following statements is false ? A. Producers enjoy the same amount of surplus as consumers. B. Any reallocation of resources can not make somebody better off without making someone else worse off. C. Producer surplus plus consumer surplus is at its maximum. D. All possible gains from trade have been realized. E. The market is in competitive equilibrium. 4. The following statements explain GDP in the U.S. Which one is correct? A. GDP is the market value of all final and intermediate goods and services produced within a given period of time by factors of production located within a country. B. GDP is not the market value of total final sales during a period, but the market value of total production. Therefore, GDP equals final sales plus change in business inventories. C. If Delta airlines, the U.S. company, were located in Tokyo, the profits from the Company would be counted in the U.S. GDP. D. If a U.S. citizen works for the Honda Corporation, a Japanese firm located in
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This note was uploaded on 02/19/2008 for the course ECON 1120 taught by Professor Wissink during the Spring '05 term at Cornell.

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ECON 102 MIDTERM (A) - TYPE A[ECON 102 Answer Key for...

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