Econ101 f03 test1 Jacobson

Econ101 f03 test1 Jacobson - Testl - I Nan“ ' i A Date l...

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Unformatted text preview: Testl - I Nan“ ' i A Date l i Z I This is the first chance to prove your economic worth to me this semester. If you’re as smart as I am, you’ll have no trouble. If not, well, good luck. Don’t cheat, because that would be no good. Please try and do well and select the correct answers for the following questions. True/False (1 pt. Each) Indicate whether the sentence or statement is true or false. E 1. The producer who has the smaller opportunity cost of producing a good is said to have an absolute advantage in producing that good. H . Two countries can achieve gains from trade even if one country has an absolute advantage in the production of both goods. t 3. Ifthe demand for a good falls when income falls, the good is called an inferior good. I 4. The demand for Rice ' pies is more elastic than the demand for cereal. GUI 6 lo. he. 5. Demand is inelastic ifthe elasticity is greaterthan 1. me i” Multiple Choice (3 pts. Each) Identyjr the letter of the choice that best completes the statement or answers the question. These graphs illustrate the production posSibilities available for dancing shoes to Fred and Ginger with 40 hours oflabor. Figurel c533: Luca Brsi $333 in m I 9' 9 L_UC 6L- T a ‘ as: o 1 T F 5 T a “‘ 1 6 I e 5 s d A a s 2 2 1 1‘ 912‘3453?39107woa’a3456vsgxom aha-n SM” CL 6. Refer to Figure 1. The opportunity cost of 1 pair of ballet slippers for Luca is a. 1/4 pair of tap shoes. . 1/3 pair of tap shoes. 5l3 pair of tap shoes. d. 4/3 pairs of tap shoes. Page 3 Last Nami A 11. at is the law of demand? a When the price of a good falls, buyers respond by purchasing more. . When income levels increase, buyers respond by purchasing more. TR When buyers tastes for the good increase, they purchase more of the good. ‘61. When the price of a good or service rises, buyers respond by purchasing more. 12. A technological advancement will shift the @ supply curve to the right. demand curve to the left. demand curve to the right. supply curve to the left. Q 13. Refer to Figure 3. Equilibrium price and quantity are a. $35,200. b. $35,600. $25,400. $15,200. L2 14. Suppose thatthe number of buyers in a market increases and a technological advan would we expect to happai in the market? a. The equilibrium price would increase, but the impact on the amount sold in the would be ambiguous. The equilibrium price would decrease, but the impact on the amount sold in the would be ambiguous. b. E) d ambiguous. Both equilibrium price and equilibrium quantity would increase. w ‘ .7 A ‘ errt occurs also. What market market Equilibrium quantity would increase, but the impact an equilibrium price would be A 15. When quantity demanded responds substantially to changes in price, demand is said to be elastic. ‘h. inelastic. N‘K Unitelastic. d\ perfectly elastic. A Page 5 Last Nam 2. Layne and Jerry must prepare for a concert. As part of their concert, they must write music and prepare the instmments. It takes Layne lO'h'u'nutes to write music for 1 song and 90 minutes to prepare 1 instrument. It would take Jerry 45 minutes to do the music and 30 minutes to prepare 1 instrument. a. Ifthey have 3 hours (180 minutes) for work; how much music and how many instmments can each prepare? b. Graph the 2 ppf’s. What slope do you notice with this mix? Why? 0. If you had more infomatim, would you expect the shape of this PPF to be bowed or straight? (D m 2‘) hours), .- he can wort-+0 ‘% £33 5, or prepare. 2_ msflwwnb 33 COKX) (A)th 4‘ 300 or prepare, (0 me) 15 \ '8 50?? Ar _ I 50235 6mm ‘50" n be slope because, Wm 60» MW A (1'th- o9 hmo ier av WC 0L 1am, relaflmemp) ‘H‘. pot M womb Jr2) Wig 50’“ 6 shall? have ’m W U255 1 We, and \H02, Ore/rem. YOUEJSfiDW 02 aux/lot her be causal/it; 113 Ming «Cw Kmmw RNA/UP lam? she (pet/(Jot no+ 6b 0m \mawmw[ cause W rm wwnhfi isma 0m 13mman mst ML Went, Page 2 Last Nat. Labor Hours Needed to Make One Amount Produced in 24 Hours: £37 7. Refer to Table 1. Canada has an absolute advantage in a. King Cobra and Iceland has an absolute advantage in Steel Reserve. Steel Reserve and Iceland has an absolute advantage in King Cobra. ‘s\ neither good and Iceland has an absolute advantage in both goods. "Ek both goods and Iceland has an absolute advantage in neither good. These figures illustrate the production possibilities available to Mr. B and Slater with 8 hours of labor in their 14 Pics 1.5 \ :7 B Q 8. Refer to Figure 2. Mr. B has a comparative advantage in WK Both goods and Slater has a comparative advantage in neither good. ‘bK loaves of bread and Slater has a comparative advantage in pies. neither good and Slater has a comparative advantage in both goods. . Pies and Slater has a comparative advantage in loaves of bread. D 9. You have decided to purchase a new Flux Capacitor. A friend tells you that the makers of the Flux Capacitor will be offering a $3000 rebate starting next month. As a result of this information your demand \ could shift either right or lea. 13‘ for Flux Capacitors shifts right today. a curve will be unaffected. 0 for Flux Capacitors shifis lefi today. 3; 10. Which of the following would NOT the demand curve for a good or service? a a change in income '— ® a change in the price ofthe good or service \q. a change in expectations about the price of the good or service fix a change in the price ofa related good n.— Page 4 Last Name ,w i 16. There are. very few, if any, good substitutes for motor oil. Therefore, a. the supply of motor oil would tend to be price elastic. the demand for motor oil would tend to be price elastic. c. the demand for motor oil would tend to be price inelastic. d. the demand for motor oil would tend to be income elastic. c. downward sloping to the right. D 17. A perfectly elastic demand curve will be vertical. b. horizontal. > d. upward sloping to the right. L 18. Which of the following would have the most elastic demand? 3. Clothing . All three would have the same elasticity of danand since they are all related. 19. Whid’l of the following w0uld probably have the most inelastic demand? a. Cigarettes ® Insulin c. Apples d. papertowels b d 20. Total Revenue will most likely have a larger increase when the price elasticity of demand is? a. Unit Elastic b. Perfectly Elastic 0. Elastic ' (ob Inelastic Short Answer — Answer all 4 please. Short, to the point, correct answers always win over BS. (8 pts. Each) 1. Ifa Comfy/market produces just 2 goods, can they have an absolute advantage over another Country/market in both goods? Why or why not? Can they have a comparative advantage over another Comtrylmarket in .. 13%Whé‘53h'i‘1‘3ieo proclam— 2. oodoJ it L; 90553 bu, fimr Om Am ham Jane 0&060 lb Odoom‘ exOUQX' balm - abecauée absolute» O)th Uoma \6 Cm W s of code Wt \SEMUCDCL )owrbLQ) C ' l‘ l r i1?! 03,060: domwfagdgfiduan over bow 035s \olc Comparahve 00‘an (W510W5 o n} costaml ll; a COW) W W COM-parath Dania ‘ W 0 mm to MPG Zach ellq _I(>_ \5 Page 6 ‘9 Last Name; Graph this market. Suppose price is at $4. Is there a surplus or a signage? How much? What will happen in ma“ W a4 em as a» gimme because W QD<QSON _ \ i6 comma War ‘5 \s supplied. mg Ob bummed: 7. fls cu read? 049 w pr» ‘OQ'wwj 60 high ($49 demand UJ\\\ (MOP) OWL m will be 0&2 Wwww W bWWé-WU WWW g 4. Demand for autography pictures of Matt Jacobson are very elastic to price, while the supply is unit elastic. Draw this market for pictures. Now suppose that people catch word of how cool he is, and not only demand more, but are willing to pay just about (but not completely) any price asked. Draw the resultant market. Based on this new demand, what advice would you give Matt if he wantedto increase his enue? Show him graphically ell. ? /\ . r it (—2th . ‘ . ‘ 9 gash, mm :3 infilaéhc Nmamcfiumgfghgsmmfi i‘P Jth (Wham 90v his pictures is inelastic (mph MGM} CHU— UO‘Min ‘10 g) at West pinkie) Id OthISe mam it) range, made his picT which would .- mamgg mo revenue. ...
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Econ101 f03 test1 Jacobson - Testl - I Nan“ ' i A Date l...

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