2nd Interim Exam - Fall 2007

2nd Interim Exam - Fall 2007 - MICROECONOMICS - ECON 103 -...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 6
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 8
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 10
Background image of page 11
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: MICROECONOMICS - ECON 103 - Name it George Mason University — Fairfax Campus Last Name, First Name Not Student ID 2nd Interim Exam - Fall 2007 - Section 003 — 7:30 to 8:45 AM, Tues. 8r Thurs. - Instructor: EC. Holt 16 October 2007, Chapters 7 thin 10. When finished, please sign pledge below and turn in both this test and your Scantron. HONOR PLEDGE: I have neither given nor received aide on this exam. Signed: (Student's Signature) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answars the question. 1) The level of utility a consumer can achieve is limited by 1) A) prices and income. B) income only. C) the consumer's preferences. D) prices only. 2) Joe has $50 to spend on pizza and movies. If movies are $5 each and a pizza is $10 then, assuming 2) he spends all his money, he can buy A) 2 movies and 6 pizzas. l3) 6 movies and 2 pizzas. C) 8 movies and 4 pizzas. D) 6 movies and 4 pizzas. 3) Marginal utility 3) A) is always negative when total utility is positive and positive when total utility is negative. B) is the additional utility derived from the last unit of a good consumed. C) is an implication of the law of demand. D) characterizes things of little use. Cookies Homer's total (pounds per week) utility ‘- 4) The above table gives the total utility that Homer obtains from consuming various quantifies of 4) chocolate chip cookies. The marginal utility from the third pound of cookies is A) 3. B) 12. C) 9. D) 4.. 5) As consumption of a good decreases, its marginal utility and its total utility . 5) A) decreases; decreases B) decreases; increases C) increases; decreases D) increases; increases Total utility from magazines Total utility from CDs Quantity of magazines 6) The table above gives Jane's total utility from magazines and CD5. What is the marginal utility of Jane's sixth magazine? A) 15 units 13) 80 units C) 36 units D) 60 units 7) Lisa is spending all of her income on compact discs and cassettes. She finds that the marginal utility from the last compact disc she buys is 30 and the marginal utility from the last cassette is 10. The price of a compact disc is $15 and the price of a cassette is $5. Lisa should A) not change her consumption of cassettes and compact discs. B) increaSe her consumption of compact discs. C) increase her consumption of cassettes. D) decrease the price of cassettes. S) Gil can consume either pens or milkshakes. Both pens and milkshakes sell for $1. Gil finds that when his income is spent, his marginal utility of pens will be 10 while his marginal utility of milkshakes will be 8. Gil could increase his utility without Violating his budget by consuming A) fewer pens and fewer milkshakes. B) fewer pens and more milkshakes. C) more pens and fewer milkshakes. D) more pens and more milkshakes. 9) People want to consume more goods and services than they currently consume. Consumption choices are limited by A) the person's preferences for goods and services. B) the person's indifference curves. C) only prices and the person's preferences. D) the person's income and the prices of goods. 6) 7) 8) Movies (per month) - —- M m N o o L m 0 2 4 6 8 10 Books [per month) 10) Consider the budget line in the above figure. If the consumer's income is $240, then the price of a 10) book is A) $12 per book. B) $24 per book. C) $20 per book. D) More information is needed to determine the price of a book. N) Tweive-pucks of soda [per month) ..—-I 0 2 4 Six-packs of soda (per month) 11) In the above figure, a shift in the budget line in the direction indicated Would occur as a result of 11) A) an increase in money income. B) a fall in the price of a movie. C) a decrease in money income. D) a rise in the price of movie. 12) The magnitude of the slope of an indifference curve is the marginal 12) A) rate of relative prices. B) rate of utility of income. C) utility of substitution. D) rate of substitution. 0 03 CDs (per month) o 2 4 o 30 12 Magazines {per month} 13) In the above figure, what is the magnitude of the marginal rate of substitution (MRS) at point a? 13) A) 2 B) 1/2 C) the rate at which the consumer will give up magazines to purchase more 035 while preferring the new combination to the old D) The question cannot be answered without more information. 14) When a consumer is at his or her best affordable point, the budget line 14) A) is flatter than the highest attainable indifference curve. B) does not touch the highest attainable indifference curve. C) is steeper than the highest attainable indifference curve. D) is tangent to the highest attainable indifference curve. Hamburgers {per week] to 5 0 0 l 2 4 <5 8 10-12 Magazines (per week} 15} In the above figure, the best: affordable point is A) 4 hamburgers and 3 magazines. B) O hamburgers and 6 magazines. C) 8 hamburgers and 0 magazines. D) some combination that is not given above. 16} Which of the following statements is FALSE? A) For an inferior good, the income effect is positive. B) For a normal good, the income effect reinforces the substitution effect. C) When the relative price of a good falls, the substitution effect always leads the consumer to substitute more of that good for the other good. D) For an inferior good, the income effect offsets the substitution effect. 15) 16) 7:! Quantity of good Y o T u s «(:qgiztfiqz‘gz}: 3:>.:":§.~1V“ ;. 17) Consider the budget line labeled RT in the above figure. What would shift the budget line to RS? 17) A) a rise in the price of goud Y B) a fall in the price of good X C) a rise in the price of good X D) a fall in the price of good Y 18) In the above figure, if the budget line shifts from RT to R5, the substitution effect is illustrated by 18) the move from A) etc b. B)ato c. C) Tto S. [3)th c. 19) Firms use incentives to pursue their most fundamental goal, which is to maximize 19) A) worker satisfaction. B) sales revenue. C) profits. D) worker pay. 20) Typically a firm's opportunity costs are 20) A) neither its explicit costs nor its implicit costs. B) the sum of its explicit costs and its implicit costs. C) only its explicit costs. D) only its implicit costs. 21) Economic profit is the difference between total revenue and 21) A) opportunity costs of production. B) explicit costs of production. C) interest costs of production. D) implicit costs of production. 22) Which type of firm produces the largest share of manufacturing output? 22) A) proprietorsiu‘ps only B) corporations only C) partnerships only D) Proprietorships and corporations are tied. 23) A market structure in which many firms are selling an identical product is called 23) A} monopolistic competition. B) perfect competition. C) oligopoly. D) monopoly. 24) The above table shows the market shares for all the landscaping services in a suburban area. The 24) four—firm concentration ratio equals A) 65 percent. B) 100 percent. C) 60 percent. D) 30 percent. 25) Of the following, the one that is NOT generally a transaction cost is the 25) A) cost of a lawyer who drafts a contract. B) fee to a broker for buying stocks. C) cost of phone calls made to find a buyer. D) cost of the owner's time in a proprietorship. 26) Economies of scale exist when the a unit of a good . 26) A) average cost of producing; rises as its input rate increases B) price; falls as its input rate decreases C) average cost of producing; falls as its output rate increases D) price; rises as its output rate increases 27) An example of a variable resource in the short run is 27) A) an employee. B) capital equipment. C) land. ‘ D) a building. 28) In economics, the short run is the time frame in which the quantifies of and the long run is 28) the period of time in which A) some resources are variable; the quantities of all resources are fixed B) some resources are fixed; the quantities of all resources can be varied C) all resources are fixed; the quantities of all resources can be varied D) all resources are variable but technology is fixed; technology is variable Total Product, Marginal Product, Average Product Labor Tota product Marginal Average (workers per day) (units per day) product product -— —_ - 29) In the above table, the marginal product of the third worker is 29) A) 1. B) 2. C) 4. D) 3. Total product Labor (units per (workers) 30) In the above table, diminishing marginal returns start to occur when the 30) A) 6th worker is employed. ' B) 3rd worker is employed. C) 5th worker is employed. 7 D) 4th worker is employed. 31) The law of diminishing marginal returns says that as the firm uses more of with a given 31) quantity of the product of the variable input eventually diminishes. A) a fixed input; variable inputs; marginal B) all inputs; capital; average C) a variable input; fixed inputs; marginal D) a variable input; fixed inputs; average Cost SChedule Total variable cost (dilars) Total fixed cost (dollars) Labor Output (workers) (units per day) 32) Using the data in the above table, the average total cost of producing 16 units per day is A) $7.00 B) $1.25. C) $6.25. D) $7.50. Total cost (dollars) 33) The above. table gives some of the costs of the Delicious Pie Company. What is the total fixed cost of producing 100 pies? A) $300 B) $700 C) $400 D) More information is needed to calculate the total fixed cost. Total cost Total variable cost (T shirts per hour) (dollars) (dollars) 2 . 34) The table above gives the cost of producing T—shirts. The total fixed cost is and the marginal cost of increasing production from 5 to 6 T shirts is A) unable to be determined; $8 B) $1040; $8 C) $20; $6 D) $20; $10 32) 33) 34) Cost {dollars per unit) O 5 10 i5 20 25 30 Quantity {units per hour) 35) In the above figure, the long-wrun average cost curve exhibits diseconomies of scale B) between 20 and 25 units per hour. D) between 10 and 20 units per hour. A) along the entire curve. C) between 5 and 10 units per hour. 10 35) Answer Key Testname: UNTITLEDI 1) A 2) B 3) B 4) A 5) C 6) C 7) A 8) C 9) D 10) B 11) A 12) D 13) B 14) D 15) A 16) A 17) B 18) A 19) C 20) B 21) A 22) B 23) B 24) A 25) D 26) C 27) A 23) B 29) C 30) D 31) C 32) D 33) A 34) D 35) B 11 ...
View Full Document

This note was uploaded on 05/18/2008 for the course ECON 103 taught by Professor Holt during the Spring '08 term at George Mason.

Page1 / 11

2nd Interim Exam - Fall 2007 - MICROECONOMICS - ECON 103 -...

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online