Sample_Test_4

Sample_Test_4 - MICROECONOMCS -— ECON 103 — Name it...

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Unformatted text preview: MICROECONOMCS -— ECON 103 — Name it George Mason University — Fairfax Campus Last Name, First Name Not Student ID 4111 Interim Exam — Fall 2008 — Section 003 — 7:30 to 8:45 AM Tues. 6e Thurs. - Instructor. EC. Holt 2 December 2008, Chapters 14, 17, 17 Appendix, and 18. When finished. please sign pledge below and turn in both this test and your Scantron. HONOR PLEDGE: I have neither given nor received aide on this exam. Signed: (Student's Signature) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or Wars the question. 1) An example of an activity that generates an external cost is 1) A) planting flowers along an interstate highway. B) national defense services. C) dumping soapSUds into a trout stream. D) eating an apple. 2) The main purpose of antitrust law is to 2) A) prohibit monopoly practices such as restricting output B) encourage the formation of cartels. C) regulate advertising. D) regulate the stock and bond markeis. 3) The supply of economic regulation will increase when there is 3) A) a demeaoe in the benefit per seller created by the regulation. B) a decrease in the benefit per buyer created by the regulation. C) an increase in the benefit per buyer created by the regulation. D) a Small benefit spread over a large number of people. 4) According to the the goal of regulators is to reduce deadweight loss. 4) A) capture theory of regulation B) rationally ignorant median voter theory C) public choice theory of regulation D) social interest theory of regulation 3‘01 959595880; nus weave 5002 82 UE’E‘ E"- E 500 E 4.50 :3 400 g 350 C U 300 "2 o 250 E E 200 D. T50 L RA C 100 M C 50 ‘ - i 5 . M R i D 0 l 2 3 A 5 6 Quantity {hundreds of trips per momh} 5) The figure above shows the revenue, marginal cost, and demand curves for an airline 5} offering dailyr flights between Los and Toronto. If the a’nli’ne is regulated. social interest theory implies that will be offered each month at a Price of per flight. A) 200; $300 81400: $100 Cl 300: $200 D) 200: $100 6) Anatura] monopoly 6) A) is a firm than can supply the [walker at lower cost than two or more firms. B) sells to a. single buyer. C) sets price equal to marginal revenue. D] has no externalitiei 7) Regulation of a natural monopoly will maximize the sum of consumer surplus and producer 7) surplus if it follows A) a marginal cost pricing rule B) an average cost pricing rule. C) rate of return regulation D] All of the above answers are correct I‘J '01 333333330; nus) Hd8I3Z 5002 82 “ET _., 0300 \l (110‘ Price and costs [dollars per unit] [RAC MC ~mmp D u__§ i _l_ l__l :— 0 l 2 3 A. 5 6 Quantity (millions of units] ,. vuggmmgn.»ugh“, _; «5;»— ‘ "-5.3; . 4')..- .n-gusm-u “3| 4-3;", 4.1-5.2; n»;— 3‘; 31,- a m: .- . 8) If the natural monopoly shown in the above is unregulated it will sell 3) A) 3 million units. '6) 2 million units. C) 5 million units. D) 4 million units. 9) Price cap regulation is a 9) A) price floor. B) type of rate of Ietum regulation. C) form of cost regulation. D] orioe ceiling. 10) A marginal cost pricing rule sets . 10) A) marginal revenue equal to average total cost B) marginal revenue equal to cost C) price equal {unmarginal cost and greater than average total cost D) price equal to marginal cost 11) The Shem-[an Act, ' 11) A) the first antitrust law, was wasted. in 1890. B) which deregulated banking, was enacted in 1980. C) the first antitrust law. was enacted in 1980. D) which deregulated hauling, was enacted in 1390. 12) Income earned by owners of capital is classified as 12) A) wages and salaries. B) interest paymente C) common payments. D) rent payments. .1 '01 ssesesseoa nus HdET=E 5008 88 war 13) An increase in the demand for a factor normally its equilibrium price and its 13) equilibrium quantity. A) raises; dmses B) miss: increases C) lowers: increases D) lowers: decreasas 14) The marginal revenue product (MRP) of labor is the extra revenue generated by 14) A) selling an additional unit of output B) price discrimination C) hiring one additional unit of labon D) raising the mice of the product by one dollar. Total product (units of output) 15) In the table above, the marginal revenue product of the third unit of labor is 15) A) $16. B) 3512. C) 34L D) $3. 16) The demand for labor increases (thatis, the demand for labor curve shifts rightward) if the 16) A) price of the tinn‘s output falls. B) wage rate mereases. C) price of the farm‘s Output rises. D) wage rate decreases. Labor's share Elasticity of demand for the product 17) In the above table, labor intensity is greatestin the production of ’17) A) good 3. B) good 1. C) good 2. D) good 4. 'd ssssessem nus HdEi=2 5008 Be UEL‘ 18) The labor supply curve is backward bending if the 18) A) income effect is larger than the substitution etfect at all wages. B) substitution effectis larger than the income effect at all wages. C) substitufion effect is larger than the income efiect at lower wages, but the income effect is lame: than the substitution effect at higher wages D) inoome effect is larger than the substitution effect at lower wages, but 1he substitution effect is larger than the income effect at higher wa 295. 19) A craft union organizes workers 19) A) to seek better working conditions but not higher wages B) who have a similar range of skills. Q Who work in the same industrv. D) to seek higher waees but not better workine conditions. 20) Unions. try to make the demand curve for their member's labor and mice the demand for 20) their member's labor elastic. A) flatter: less Bi flatter; more C} steeoer: less [)1 steeoer; more 21) Which of the following methods is used by unions to increase the demand for the labor of its 21) membrane? A) Support Mmum wage laws B) Support free trade C] Decrease the marginal product of imion members D) Decrease demand for the good produced 'd ssssesseo; nus HdEI=8 5002 83 UEE‘ #waMONVCD‘OO Wage rote [dollars per hour] 75 1 00 125 ‘150 Labor {hours per week] i em- a)“; O IN) U! Ln 0 are: .J_ _»-- '-'.'v\'rmir:‘.v‘n;‘- KV"-.I!*5-.v-,V-}'w «gm, £31.39, r:- :71? en'l'cxv-‘J' 22} The figure above shows a labor market. If there is a monopsony in lids labor market, the wage rate 22) 1.5 A) $6 per hour. B) $10 perhouL C) $8 per hour. D) $4 per hour. 23) In a monopsony labor market, a mjrfimum wage set equal to the competitive market equilibrium 23) wage rate can the wage rate and _,_ernplovment. A) Iowa: increase B) raise: increase C) lower: decrease D) raise: decrease 24) As the interest rate the amount of saving and the quantity of capital supplied 24) A} rises: increases: increases B) falls: increases; decreases C‘} rises: decreases: decreases D‘I rises: decreases: increases 25) Economic rent is defined as the 25) A) total income receiVed by the owner of a factor. B) price paid for the services of land or a C‘I entire income of a. factor that has perfectlv elastic suonlv. D) income received by the owner of a factor over and above the amount required to induce that 01.1mm in nF'F-M- Han Fart-gr For men 26) Suppose the interest rate is 5 percent per year. The present value of $210 to be received one year 26) from trade? is A'l $220.50. B) $210.00. C) $200.00. D} $215.00. 27) The present value of $50 to be received next year is $4JJ. The interest rate is 2'7) A) 2.5 percent B) 20 pereent. C) 10 percent D) 50 percent. fl L'd 333333333; nus HclEIIH? 3002 83 UE’E‘ 100 co 0 L 0 Cumulative petcentoge 0F income 0 O o A 20 40 60 so 100 Cumulative percentage of households V'4.t« .. e-w {mm-- w - an *.t\,'.-\x.:w ‘J‘.‘-E.a"“" .- r w: . 28) In the figure above, the Lorenz curve that shown; the least inequality, but NOT perfect equality, is 28) A) curve A. B) curve B. C) cmve C. D) curve D. Cumulative percentage of income 0 20 40 60 BO 100 Cumulative percentage of households . um. 29) Inathe figure above, the poorest 40 percent of all households receive what share of income? 29) A) 10 percent B) 20 percent C) 60 percent D) 40 percent 30) The federal income tax is 30) A) progressive. B) proportional C) regresaive. D) a flat—rate tax. '7 'al 9555858801. OHS HHSI=DI 8008 DE UE’F Answer Key Teshmame: 4TH TEST ECON 103 FALLOB 1) C 2) A 3) c 4) D 5) B 6) A 7) A B) B 9) D 10) D 11) A 12) B 13) B 14) c 15) B 16) C 17) B 18) C 19) B 20) c 21) A 22) D 23) B 24) A 25) D 26) c 27) A 28) B 29) B 30) A 8'01 95988888011. nus HdEI=E 5002 BB uE’E‘ ...
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This note was uploaded on 04/29/2009 for the course ECON 103 taught by Professor Holt during the Spring '08 term at George Mason.

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Sample_Test_4 - MICROECONOMCS -— ECON 103 — Name it...

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