Q1F05A

# Q1F05A - Name Test Form A Economics 1 Quiz 1 October 19,...

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Name Test Form A Economics 1 Quiz 1 October 19, 2005 Each correct answer is worth 5 points. Answers left blank are worth 2 points. Wrong answers are worth 0 points. True-False Questions: Fill in Bubble A for True, Bubble B for False. 1. If trades are arranged between buyers and sellers so that each buyer who makes a trade has a higher buyer value than the seller cost of the person with whom he or she trades, the outcome of these trades must be eﬃcient. 2. Consumer’s surplus is the diﬀerence between the number of units of a good demanded and the number of units supplied. 3. If James gives Ellen a ticket to an upcoming concert, Ellen’s opportunity cost of attending the concert is zero. 4. Suppose the demand curve for a good slopes down and the supply curve for that good slopes up. If the supply curve shifts and the demand curve does not shift, the equilibrium price and quantity will move in opposite directions. 5. The more elastic is demand, the greater will be the price increase resulting from an upward shift in the supply curve. Multiple Choice Questions 6. The supply function for fresh strawberries is given by the equation P s ( Q ) = 2 + 2 Q . The demand function is given by the equation P d ( Q ) = 134 - 4 Q where Q is the number of crates of strawberries sold. In competitive equilibrium, how many crates of strawberries will be sold? (a) 19 (b) 22 (c) 27 (d) 46 (e) None of the above.

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Economics 1 2 7. A small tropical island’s banana market has 35 banana growers and 65 banana consumers. Each banana grower can sell at most one sack of bananas. Each consumer can consume either 0 or 1 sack of bananas. There are 25 low-cost banana producers, each of whom can produce bananas at a cost of \$25 per sack and 10 high-cost banana producers, each of whom can
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## This note was uploaded on 10/12/2008 for the course ECON 1 taught by Professor Bergstrom during the Spring '07 term at UCSB.

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Q1F05A - Name Test Form A Economics 1 Quiz 1 October 19,...

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