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MidtermTwo2007QA

# MidtermTwo2007QA - Econ 1 Lect B Midterm 2 Thursday LAST...

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Econ 1, Lect. B, Midterm 2 LAST NAME: ____________________________ Thursday, November 15, 2007 FIRST NAME: ____________________________ STUDENT ID: ____________________________ SIGNATURE: ____________________________ DO NOT OPEN YOUR EXAM UNTIL INSTRUCTED TO DO SO!!! INSTRUCTIONS 1. Make sure you have all pages ( 30 multiple choice, 3 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. ______

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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In the above figure, the price paid by the buyer before the tax is ________ per compact disc, and the price paid by the buyer after the tax is ________ per compact disc. A) \$20; \$20 B) \$30; \$30 C) \$30; \$20 D) \$20; \$30 2) In the above figure., what is the amount of the total tax revenue collected by the government? A) \$200 million B) \$40 million C) \$400 million D) \$20 million 3) Along an indifference curve A) the marginal rate of substitution is constant but not equal to zero. B) the marginal rate of substitution is equal to 0. C) the consumer prefers some of the consumption points to others. D) the consumer does not prefer one consumption point to another. 4) An indifference curve diagram has movies on the vertical axis and sodas on the horizontal. As the consumption of sodas increases and movies decreases (moving southeast along an indifference curve) the marginal rate of substitution of sodas for movies A) rises. B) probably changes, but more information is needed to determine if it rises or falls. C) falls. D) does not change. 1
5) The indifference curves in the above figure could represent your indifference curves between A) hot dogs and textbooks, which you think are neither perfect substitutes nor perfect complements. B) eyeglass frames and eyeglass lenses, which you think are perfect complements. C) Coke and Pepsi, which you consider perfect substitutes. D) none of the above 6) An outcome is efficient if A) the marginal benefit is less than the marginal cost. B) the marginal benefit of the last unit exceeds marginal cost. C) the total benefit is equal to the marginal cost. D) the marginal benefit of the last unit is equal to marginal cost. 7) A minimum wage is a government - imposed price ________ that is designed to be ________ the equilibrium wage rate. A) ceiling; above B) ceiling; below C) floor; above D) floor; below 8) When a consumer is consuming at a point where his or her budget line is not as steep as his or her indifference curve, then he or she should A) consume more of the good that is measured on the horizontal axis. B) not change his or her behavior. C) consume none of the good that is measured on the horizontal axis. D) consume less of the good that is measured on the horizontal axis.

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MidtermTwo2007QA - Econ 1 Lect B Midterm 2 Thursday LAST...

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