Midterm1_formA_fall06_review

Midterm1_formA_fall06_review - Midterm 1 Economics 304K:...

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1 Midterm 1 Economics 304K: Principles of Microeconomics Prof. Meg Ledyard Fall 2006, TTH 3:30-5pm Practice Fall 07 50 Min. Name _____________________ UT EID ____________________ FORM A You have 50 min for the exam. There are a total of 100 points. You may NOT use calculators or other aids. You may leave any fractions un-simplified. Please show all of your work on the following pages. If you need more space, please use the back. Properly label all graphs. Make sure that you include your test form on your multiple choice answer sheet. You should have 7 pages including this one. Please count them to be sure.
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2 Question 1 (20 points) Consider the perfectly competitive market for pumpkins. You observe the following data: price elasticity of demand is 0.12, price elasticity of supply is 12, income elasticity of demand is -0.54(notice the negative sign), cross price elasticity of pumpkins for squash is 2.3, and cross price elasticity of pumpkins for candles is -5 (notice the negative sign). For each section below, state what happens to equilibrium price and quantity when the market changes in the following way. Each section is separate. You do not need a graph for these parts, but it may help in figuring out the problem. a. (5 points) Incomes decrease.
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This note was uploaded on 03/18/2008 for the course ECON 304K taught by Professor Ledyard during the Spring '08 term at University of Texas at Austin.

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Midterm1_formA_fall06_review - Midterm 1 Economics 304K:...

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