Micro_Midterm_One_Spring_2008_Ver_E_-_MC

Micro_Midterm_One_Spring_2008_Ver_E_-_MC - Midterm Exam 1...

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1 Midterm Exam 1 key Version E Principles of Microeconomics Penn State ECON 002 Midterm Exam One Spring 2008 Clair Smith LAST NAME: _________________________ FIRST NAME: ________________________ LAST 4 DIGITS OF YOUR PSU STUDENT ID: __ __ __ __ Instructions: Neatly write your name and other info on both this exam and the scantron form. Write and fill in the appropriate bubbles for PSU ID, SEC. NO, and TEST VERSION on the scantron form. PART I Multiple Choice Section (25 questions, 3 points each) Choose the best answer and mark your answer choice clearly in pencil on the answer sheet. You may make any notes you wish on the test questions, but credit will be given only for readable answers on the answer sheet. PART II Graphs and Short Answer Write your answer or draw your graph neatly in the space provided. Make sure you address all parts of the question. Points vary and are indicated in each question. When you are finished, bring both this exam and your scantron sheet to the front of the room with your id card. You have 50 minutes to complete this exam. You may thumb through the corners to ensure that your exam contains 5 sheets of paper, but please do not open the exam until you are instructed to begin. When you do open your exam, you should find 25 multiple choice questions, double-sided on pages numbered 2-5, and the 4 graph/short answer questions printed single-sided on pages numbered 6 and 7. Good Luck.
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2 ______1. What is the efficiency criterion that describes a situation where goods and services are produced at the lowest possible cost? a. allocative efficiency *b. productive efficiency c. normative efficiency d. positive efficiency ______2. The supply curve shows a. the quantities actually sold at different prices. *b. the marginal opportunity cost of producing one more unit of a good or service. c. the marginal benefit from buying one more unit of a good or service. d. the total cost of producing quantities of a good or service. ______3. There is a deadweight loss a. when the market is at the competitive equilibrium. *b. whenever the market is forced away from the competitive equilibrium. c. when the market produces where marginal costs equal marginal benefit. d. when economic surplus is maximized. ______4. According to Adam Smith, which of the following is true? *a. Individuals usually act in a rational, self-interested way. b. Market prices can come to reflect the prices desired by consumers. c. Markets work because producers, aided by government, ensure that neither too many nor too few goods are produced. d. All of the above. ______5. Penny and Leonard both attend the same college and incur the same expenses for tuition, books, and school supplies. Penny gave up a lucrative job as a personal assistant to a famous designer in New York to attend school full-time and Leonard gave up his job as a store clerk in Home Depot. It follows that a. the opportunity cost of attending college is the same for both since they are
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Micro_Midterm_One_Spring_2008_Ver_E_-_MC - Midterm Exam 1...

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