MT1Spring2008A

# MT1Spring2008A - Trost Midterm 1 Spring 2008 Econ 2005...

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Trost Midterm 1 – Spring 2008 1 Econ 2005 Spring 2008 Professor: Steve Trost MIDTERM 1 February 13, 2008 FORM A PLEASE TURN IN ONLY THE SCANTRON SHEET. KEEP THE EXAM FOR REVIEW. BE SURE ALL QUESTIONS ARE FILLED IN ON THE SCANTRON SHEET USING A #2 PENCIL. PLEASE MAKE SURE THAT YOU HAVE ALL 10 PAGES OF THE EXAM. INSTRUCTIONS FOR THE SCANTRON SHEET: 1. PLEASE WRITE YOUR NAME IN THE APPROPRIATE BLANK 2. WRITE YOUR ID (HOKIE PASSPORT) NUMBER AND FILL IN THE BUBBLES. 3. WHERE IT SAYS “COURSE”, PUT ECON 2005 4. WHERE IT SAYS “COURSE REF” PUT THE TIME OF THE CLASS IN WHICH YOU ARE ENROLLED. 5. WHERE IT SAYS “DATE” PUT THE DATE 6. UNDER “FORM” PUT “A” (AND FILL IN THE BUBBLE) HONOR PLEDGE: I HAVE NEITHER GIVEN NOR RECEIVED UNAUTHORIZED ASSISTANCE ON THIS EXAM.

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Trost Midterm 1 – Spring 2008 2
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A change in income, preferences, or prices of other goods or services leads to a change in ________ that causes a ________ the demand curve. A) demand; shift of B) demand; movement along C) quantity demanded; movement along D) quantity demanded; shift of 1) Refer to the information provided in Figure 5.2 below to answer the questions that follow. Figure 5.2 2) Refer to Figure 5.2. Using the midpoint formula, if the price of a hamburger is increased from \$8 to \$10, the price elasticity of demand equals A) - 2.5. B) 0.36. C) 333. D) - 3.0. 2) 3) The adjustment of ________ is the rationing mechanism in free markets. A) supply B) price C) demand D) quantity 3) 4) Firms are on the ________ side of input (factor) markets and on the ________ side of output (product) markets. A) demand; supply B) supply; supply C) supply; demand D) demand; demand 4) 5) Price is determined entirely by demand when A) demand is downward sloping. B) supply is perfectly inelastic. C) demand is perfectly inelastic. D) supply is perfectly elastic. 5) 6) When the price of fresh fish increases 5%, quantity demanded decreases 10%. The price elasticity of demand for fresh fish is A) unitary elastic. B) perfectly inelastic. C) inelastic. D) elastic. 6) 1

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7) The owner of a local hot dog stand has estimated that if he lowers the price of hot dogs from \$2.00 to \$1.50, he will increase sales from 400 to 500 hot dogs per day. Using the midpoint formula, the demand for hot dogs is A) elastic. B) perfectly elastic. C) inelastic. D) unitarily elastic. 7) 8) An improvement in technology will cause the A) production possibility frontier to shift inward. B) production possibility frontier to shift outward. C) economy to move closer to its production possibility frontier. D) economy to move down the production possibility frontier. 8) 9) In economics, investment refers to A) an increase in per capita output. B) improving the productivity of labor. C) the act of buying stocks or bonds. D) the creation of capital.
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MT1Spring2008A - Trost Midterm 1 Spring 2008 Econ 2005...

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