Practice Midterm 1

Practice Midterm 1 - Midterm 1 Tuesday Econ 1 NAME Student...

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Midterm 1 NAME: __________________________________ Tuesday, October 18, 2005 Econ 1 Student ID: ______________________________ TA: _____________________________________ SIGNATURE: ____________________________ DO NOT OPEN YOUR EXAM UNTIL INSTRUCTED TO DO SO!!! INSTRUCTIONS 1. Make sure you have all pages (40 multiple choice, 2 short answer). 2. Answer all multiple choice questions in the space provided below. 3. For the short answer, show all work. We reserve the right to deduct points from answers that are hard to read. 4. You may NOT use a calculator. 5. There are a total of 100 points. MULTIPLE CHOICE ANSWERS (2 points each) 1. ______ 2. ______ 3. ______ 4. ______ 5. ______ 6. ______ 7. ______ 8. ______ 9. ______ 10. ______ 11. ______ 12. ______ 13. ______ 14. ______ 15. ______ 16. ______ 17. ______ 18. ______ 19. ______ 20. ______ 21. ______ 22. ______ 23. ______ 24. ______ 25. ______ 26. ______ 27. ______ 28. ______ 29. ______ 30. ______ 31. ______ 32. ______ 33. ______ 34. ______ 35. ______ 36. ______ 37. ______ 38. ______ 39. ______ 40. ______
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1. Suppose that both the equilibrium price and quantity of mustard rise. The most consistent explanation for these observations is A) a decrease in demand for mustard with no change in supply. B) a decrease in the supply of mustard with no change in demand. C) a decrease in demand for mustard and a decrease in the supply of mustard. D) an increase in demand for mustard with no change in supply. E) an increase in the supply of mustard with no change in demand. 2. A university observes that when it raises the price of football tickets, total revenue from football games increases and when they lower ticket prices, total revenue falls. This suggests A) football fans act irrationally. B) the demand for tickets to football games must be elastic. C) there are many good substitutes for college football games. D) the demand for tickets to football games must be inelastic. E) the demand for tickets to football games is unit elastic. Price/ Unit Column A Units/year Column B Units/ year $20 100 50 $30 85 60 $40 70 70 $50 55 80 $60 40 90 3. Assume that column A and column B are demand and supply curves. At a price of $50, the market would experience A) an equilibrium. B) excess demand of 25 units C) excess supply of 25 units D) excess demand of 10 units E) excess supply of 10 units 4. One observes that the equilibrium price of rice falls and the equilibrium quantity falls. Which of the following best fits the observed data? A) An increase in demand with supply constant. B) An increase in demand coupled with a decrease in supply. C) An increase in demand coupled with an increase in supply. D) A decrease in demand with supply constant. E) Demand constant and an increase in supply. Page 1
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5. A cross price elasticity of 0.83 indicates the two goods are A) substitutes. B) inelastic. C) complements. D) normal. E) elastic. 6. If the slope of the demand curve is zero, the price elasticity of demand will be A) perfectly inelastic. B) inelastic. C) unit elastic. D) elastic. E) perfectly elastic. 7. A decrease in the demand for bananas with no concurrent change in the supply of bananas will result in a ________ equilibrium price and a(n) ________ equilibrium quantity. A) higher; lower B) lower; lower C) higher; unchanged D) higher; higher E) lower; higher 8. For OutBack Steakhouse, seating capacity is limited in the short run. In the long run they can add as many seats as they want. Therefore, the price elasticity of supply for the meals in OutBack would be_____ in the short run than in the long run.
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This note was uploaded on 05/02/2008 for the course ECON 1 taught by Professor Tang during the Fall '08 term at UCSD.

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Practice Midterm 1 - Midterm 1 Tuesday Econ 1 NAME Student...

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