Holt_Econ_103_Sample_Test_1

Holt_Econ_103_Sample_Test_1 - it MICROECONOMICS — ECON...

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Unformatted text preview: it MICROECONOMICS — ECON 103 - Name Not Student ID George Mason University — Innovation Hall Room 103 Last N ante, First Name lst Interim Exam — Fall 2008 — Section 003 — 7:30 to 8:45 AM, Tues. 8r Thurs. - Instructor: EC. Holt 25 September 2008, Chapters 1 thru 5, including Appendix to Chapter 1. When finished, please sign pledge below and turn in both this test and your Scantron. HONOR PLEDGE: lhave neither given nor received aide On this exam. Signed; (Student's Signature) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) All economic questions are about A) how to make money. B) how to satisfyr all our wants. C) what to produce. D) how to cope with scarcity. 2) Which of the following is a nucroeconomic topic? A) The reasons fora decline in average prices B) The reasons why total employment decreases. C) The effect of the government budget deficit on inflation. D) The reasons why Kathy buys less orange juice. 3) Human capital is A) all capital owned by individuals, but not by corporations or governments B) the skill and knowledge of workers. C) all capital owned by individuals or corporations, but not by goverrunents. D) machinery that meets or exceeds federal safety standards for use by humans. 4) The opportunity cost of something you decide to get is 4) A) all the possible alternatives that you give up to get it. B) the lowest valued alternative you give up to get it. C) the highest valued alternative you givo up to get it. D) the amount of money you pay to get it. 5) The benefit that arises from an increase in an activity is called 5) A) the marginal benefit. B) the marginal cost. C) an incentive. D) opportunity cost. 6) Which of the following is an example of a positive statement? 6) A) Households are the primny source of saving. B) The foreign sector should be more tightly controlled C) Government should not redistribute income. D) Business firms ought to contribute more to charities. 3'64 9898888801, [ll-J3 HdBE:I 5003 82 U9? 7) Economic models 7) A) always use graphs. B) are essentially different from those used in other sciences. C) simplify reality. D) include all relevant facts. ww:...u,__p~-:m o- -|‘_- ..- franm‘ki‘WkfiHJA'hfiH "aim-z“! an" 1* r.-h-"-.'L'—E'Z~..= ‘3 "c"? .2 5" "g 40 Interest rate a 5% 0.? CL 3 x V} o 11 3; 32 a -o 4: ..._ g S o "D 24 I E ' lb :1 o 'E. l6 - B O B l 6 211 32 £10 118 Household income {thousands of dollars per year} 8) In the above figure, when income is zero; household expenditures equal 8) A) $4000. B) $1000. C) 0. D) $3000. 9) Using the data in the table above, with y measured on the vertical axis, the slope of the line relating 9) y to x is A) 3. B) 1. C) 1/3. D) 6. 10) The production possibilities frontier is the boundary between ID) A) thOSe wants that are limited and those that are unlimited. B) those combinations of goods and services that can be produced and those that cannot. C) those resources that are limited and those that are unlimited. D) those combinations of goods and seNiCes that can be produced and those that can be consumed. 'd ssssesseoe nus) HdSE2=I 5003 82 uec 11) Production efficiency requires that 11) A) resources are assigned to the task [01 which they are the best match. B) it is impossible to produce more of one good without producing less of some other good. C) production is at a point on the PPF. D) All of the above answers are correct. -:' "I" F“ H~'1'-"""fl'- -'-"'.‘l""'-' .' '_'T.' -J " 1"" "' - WWW-n.1- - " I- | 3‘ on} lee cream {gallons per hour] k) O l 2 3 4 5 Yogurt (gallons per hour) m . 3:..1 ....-.:r :anq-rnrwnnerflWfi-u --‘—»-=-—- n «q- 12) In the figure above, if the quantity of yogurt produced increases from 2 gallons an hour to 3 gallons 12) an hour, the opportunity cost of a gallon of yogurt in terms of ice cream is A) 1 gallon B) half a gallon. C) 3 gallons. D) 4 gallons. 13) The marginal benefit from a good is the maximum amount a person is willing to pa},r for 13) A) all of the units of the good the person consumes divided by the number of units he or she purchases B) one more unit of the good divided by the number of units purchased C) all of the good the person consumes. D) one more unit of the good‘ 14) In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either 14) plow 14 acres or plant 14 acres. Which of the following statements about comparative advantage is correct? A) Cluistopher has a comparative advantage in both plowing and planting. B) Brandon has a comparative advantage onlan plowing. C) Brandon has a comparative advantage only in planting. D) Brandon has a comparative advantage in both plowing and planting '54 QBSBEBBEUL [ll-15) HdBE‘l 8003 83 UE’C 17) The money price of a pizza is $12 per pizza and the money price of a taco is $2 per taco. The 15) A computer software program is meet strongly an aarnple of A) flat property. C) real property. 16) The term "market" refers to B) intellectual property. D) vicarious property. 15) 16) A) any arrangement that enables buyers and sellers to get information and trade with one another. B) physical structures only. C) trading arrangements thathave been approved by the government. D) locations where buyers and sellers physically meet. relative price of a pizza is A) $24 per pizza. B) 1/6 pizza. C) 6 tacos per pizza. D) $12 per pizza. 18) The law of demand states that the quantity of a good demanded varies A) inversely with the price of substitute goods. B) directly with income. C) inversely with its price. D) directly with population 19) People buy more of good 1 when the price of good 2 rises. These goods are 20) Suppose people buy more of good 1 when the price of good 2 falls. These goods are 21) People come to expect that the price ofa gallon of gasoline will rise next week. As a result, 22) A change in which of the following alters buying plans for cars but does NOT shift the demand A) inferior goods. B) complements. C) substitutes. A) normal. B) inferior. C) substitutes. A) next week's supply of gasoline decreases. B) today's demand for gasoline increases. C) the price of a gallon of gasoline falls today. D) today's supply of gasoline increases. curve for cars? A) A 5 percent increase in people's income. B) A 10 percent decrease in the price of car insurance. C) An increased preference for walking rather than driving. D) A 20 percent increase in the price of a car. SBSBEISBEDd. HHS 17) 18) 19) D) normal goods. 20) D) complements. 21) 22) HdBE=l 13003 83 UEC‘ 23) An increase in technology for producing personal computers leads to 23) A) a decrease in the supply of personal computers. B) a decrease in the demand for personal computers. C) an increase in the demand for personal computers. D) an increase in the supply of personal computers. 24) An increase in the number of producers of gmel the supply of gruel and shifts the supply 24) curve of gruel A) decreases; leftward B) increases; rightward C) decreases; rightward D) increases; leftward 25) A shortage causes the 25) A) supply curve to shift rightward. B) demand curve to shift leftward C) price to fall. D) price to rise. 26) A surplus occurs when the price is 26) A) less than the equilibrium price. 3) greater than the equilibrium price. C) equal to the equilibrium price. D) None of the above because the existence of a surplus is independent of the price of the good. (dollars per cellular phone) 27) Using the data in the above table, the equilibrium quantity and equilibrium price for a cellular 27) telephone is A) 80 thousand and $80. B) 60 thousand and $50. C) 40 thousand and $20. D) 50 thousand and $100. 5 '0‘ SSSBBBBEDL HHS HdS€=I 8008 83 UEC .:r|.- .- fill-n1 “1.4.4:: .. _.: ._1 - 1-- .'\' S Price [dollars] 8 8 6 4 2 l - - D = _i_‘ J i i J._.. O .100 200 300 400 500 600 Quantity "-“" ““ "M" 5 " *9?”- =- #511: "-' ' - -- -'- '-'- ' 28) At a price of $10 in the above figure, there is A) a surplus of 400 units‘ C) a shortage of 200 uniis. 'd SBQBEBBEDL ._ .c. : -:1. .1. ¢-.-. 4'43 B) a shortage of 400 units. D) a surp]us of 200 units. {1145] 23) HdBE:I 8002 83 UEE‘ “Ha-3.513... ___‘.... _ ...~,,,.........:.. --. .- -u .-m_—.::.-azer=;-s.srmmw Lg Quantity [ions of hamburger) Quantity {tons of hamburger] Figure A Figure B Price (dollars per pound] U& ‘ m S Price {dollars per pound} lg. 52 :ET 5 ] 8 3 o. o. is W 51 51 Arm 52 3 E i E. 8 D 3 D ._ ._ or d: Quantity [tons of hamburger) Quentin [tons of hamburger] Figure C Figure D -- ._-.-'---:_a~-_- ...::-5 .5: '. --a~,:'- :._'.- :.'..-'.'-" '.!l".'l"..'".: .:a'.‘.T."ll... . -".' "x" =32: 29) The above figure shows the market for hamburger. Which figure shows the effect of an 29) announcement by the US. Food and Drug Administration (FDA)that eating hamburger alums early death? A) Figure A E) Figure B C) Figure C D) Figure D 30) The price elasticity of demand for furniture is estimated at 1.3. This value means a one percent 30) increase in the A) quantity of furniture demanded will demas‘e the price of furniture by 1.3 percent. B) price of furniture will decrease the quantity of furniture demanded by 1.3 percent. C) quantity of furniture demanded will increase the price of furniture by 1.3 percent. D) price of furniture will increase the quantity of furniture demanded by 1.3 percent. 31) Last year the price of corn was $3 per bushel and the quantity of corn demanded was 8 million 31) bushels. This year the price of corn is $4 per bushel and the quantity of corn demanded is 7 million bushels. Assuming that the demand curve has not shifted, what is the price elasticity of demand for corn? {Use the midpoint formula) MZM may 01 mum 32) Demand is perfectly inelastic when 32) A) shifts of the supply curve results in no change in the total revenue from sales. B) shifts in the supply curve results in no change in price. C) shifts of the supply curve results in no change in quantity demanded D) the good in question has perfect substitutes. "Jl SBSBESSEDL HHS HdO‘Pin. 8003 BB UEE‘ 33) The demand for movies is unit elastic it 33) A) a 5 percent decrease in the price leads to an infinite increase in the quantity demanded. B) a 5 percent increase in the price leads to a 5 percent decrease in the quantity demanded. C) a 5 percth increase in the price leads to a 5 percent increase in total “avenue. D) any increase in the price leads to a 1 percent decrease in the quantity demanded. 34) If the demand curve for a good is a downward sloping straight line, the demand for the good will 34) be more price elastic the higher is the A) income of consumers. B) price of complements. C) income elasticity of demand for that good. D) price of the good. 35) Producers‘ total revenue will decrease if 35) A) the price rises and demand is elastic. B) income increases and the good is a normal good. C) the price rises and demand is inelastic. D) income falls and the good is an inferior good. 36) Sal likes to eat pizza. The is the maximum amount that Sal is willing to pay for one piece 36) of pizza. A) efficient amount B) efficient price C) marginal cost D) benefit 8 '01 sssessseoc nHo HthriI sooa 83 wet yfiuwm F _N_._.;u_-.-.-;.- ._:...!:..._.“,.»4_.--m:.:;:-=1'-== ::'-:IrJL:E:'mWwKWW '5 30 0 U 31 25 i 3 3 20 § E 15 ‘ 10 i 5 . _ . . , . O 2 4 6 8 1O 12 Quantity (CD5 per year} ~..-.-.-: Ir .- = m-xszzas.-: ‘5 mm: anvng 37) The figure above shows Clara's demand for CD5. At a price of $20 for a CD, the value of Clara's 37) total consumer suxplus for all the CD5 she buys 15 A) $4. B) $20, C) 5340. D) $30. we . ‘£W%RFIRWIW"‘FH 'Lmfififflfi‘i‘w- 1- " -'I“-!".' N o. 0 Price [dollars per bagel} h.) 8 1.50 1 .00 : l: O I O 20 30 Quaniify (bagels per hour) *“d-I ' - -" . .- "- 'Lfififlm%f?mzmfim 38) The figure illustrates the market for bagels. If the number of bagels produced is cut from 20 to 10 an 38) hour and the price rises to $2.00 1365‘ bageL consumer surplus decreases by A) $2.50 an hour B) $0.50 a bagel C) $5.00 an hour D) $7.50 an hour DT'd SSSSESSEDL GNU HdDbiT 3002 82 UEF II' 39) Producer surplus is the summed over the quantity produced. A) value of a good minus the price paid for it B) price paid for a good minus the opportunity cast of making it C) price paid for a good minus the value of the good D) opportunity cost of making a good minus the price paid for it 10 SBSBESSEDL GHQ 39) NdUb:I 8002 BE UEf Answer Key Testname: IST TEST NUCRO FALLDB AM 1)D 2)D 3)B 4)c 5)A 6)A 7) c B)D 9)A ImB n)D 12);; 13)I) 14) c 133 16)A Inc w)c 19)C 20) D 21.) 13 22MB 23)D ZQB 25) D 26)B 233 28)A 2mB 30)B 31)B 32)c BQB 34JD xaA :%JD 333 3&1) 3%3 11 ar‘d asssesseoc nus HdObit 3003 82 us ...
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Holt_Econ_103_Sample_Test_1 - it MICROECONOMICS — ECON...

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