Practice Final Exam SP16

# Practice Final Exam SP16 - Name Student MICROECONOMICS 1014...

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Name:_____________________________ Student #___________________ MICROECONOMICS 1014 FINAL EXAM VERSION: Practice Please do not begin the exam until you are told to. You have 120 minutes to finish the exam. When the time is up do not write anything more on the scantron. On the scantron sheet, fill in NAME, STUDENT# and VERSION# Only pencil, erasers, both sides of one 8.5 x 11 cheat sheet, and a standard function calculator may be used on this exam. No other devices are allowed. You may not use the calculator on your cell phone. Fill all answers on your scantron. No answers will be accepted unless they have been filled into the scantron.

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1 Version: Practice TWAG!! 1. Joe runs a landscape business. He knows that providing landscaping services costs him \$100 per hour on average, while the cost of providing such services is \$150 per hour after 5 PM (due to overtime pay, reduced productivity, and the added wear and tear on his equipment). A potential client offers Joe \$130 per hour to provide services but needs him to provide the services after 5 PM due to circumstances at the property. 1) Joe should take the job, since \$130 exceeds his average cost of production. 2) Joe should take the job, since he is making a \$30 profit per hour. 3) Joe should decline the job, since he would lose \$150 per hour worked on the job. 4) Joe should decline the job, since he would lose \$20 per hour worked. 2. Suppose a customer at a restaurant is deciding whether or not to order dessert. Marginal thinking means that the customer should compare: 1) the total benefit from the entire meal and dessert with the additional cost of the dessert. 2) the total benefit from the entire meal and dessert with the total cost of the meal and dessert. 3) the additional benefit from the dessert with the additional cost of the dessert. 4) the marginal benefit from the meal with the marginal cost of the dessert. 3. Which of the following is an example of a positive economic statement? I. Jeremy should buy Apple stock because the price is going to go up. II. If consumers buy more beef, the price of pork will fall. III. If consumers buy more beef, the price of pork will rise. IV. Betty should listen to Martha's stock advice, because Martha is an economist. 1) II only 2) II and III only 3) I, II, and III. 4) None of them.
2 4. Which statement is an example of normative economics? 1) The Americans with Disabilities Act reduced employment opportunities for the disabled. 2) Rent controls reduce the housing stock. 3) Workers pay the majority of corporate taxes in the form of lower wages. 4) The government should not have bailed out the domestic automobile market. Use the following to answer question 5. Figure: PPF Nickel & Textiles 5. (Figure: PPF Nickel & Textiles) Refer to the figure. How many tons of textiles does Australia give up to produce one ton of nickel? 1) 1/3 2) 1/2 3) 2 4) 3

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3 6. The current demand for parking in a city's downtown district is such that all the parking garages are full. If there is an increase in the city's population, there will be: 1) an increase in the willingness to pay for parking.

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