Exam 3 ECON.pdf

# Exam 3 ECON.pdf - Name Student Pawprint MICROECONOMICS 1014...

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Name: ___________________ Student #_____________ Pawprint ___________ MICROECONOMICS 1014 EXAM 3 4/18/2018 VERSION: 191 x Do not open the exam until you are told to. x Fill in name, student # and pawprint on top of this cover sheet and the scantron sheet. Fill all answers on your scantron. No answers will be accepted unless they have been filled into the scantron. x Only pencils, erasers, one page of 8.5 x 11 cheat sheet, and a non- graphic calculator may be used on this exam. No other devices are allowed. You cannot use your cell phone during the exam for any reason. Tear this front sheet off and turn it in with your scantron together to the proctor after completing your exam!!! You can keep the exam questions for your own record.

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3 Version: 191 TWAG!! 1. Ten farmers, in a society with 100 people, would collectively gain \$100,000 from a farm subsidy. All 100 people would pay the \$300,000 cost of the subsidy program. Are the farmers willing to lobby the government in support of the subsidy? A) No, the benefits of \$10,000 per farmer are less than the costs of \$300,000. B) Yes, the benefits of \$10,000 per farmer exceed the costs of \$3,000 per person. C) Yes, regardless of the cost, the farmers are supportive of any subsidy with benefits. D) No, the benefits of \$100,000 are less than the cost of \$300,000. 2. Which of the following is an example of statistical discrimination? A) Bob does not play poker in Las Vegas because he thinks the odds are against him. B) Mary makes a marketing decision based on past sales data. C) You assume your next-door neighbor Louise is a slow driver because she is 89 years old. D) David shops around to find the lowest price on an item he is looking to purchase. 3. A possible source of why cartels break down is the growth potential of the industry. Although industries with a lot of potential are more willing to invest in the time to form a collusive agreement, such growth potential also deters them from making this investment. Why would that be? A) High-growth industries are less likely to have the support of the government. B) High-growth industries are more likely to be monitored by the government. C) High-growth industries are less likely to face an inelastic demand curve. D) High-growth industries are more likely to have lots of entrants. 4. Table: Jim, Dan Payoff Table Dan Ice Cream Cake Jim Ice Cream (5, 5) (1, 1) Cake (2, 2) (6, 6) Refer to the table. Jim and Dan are trying to decide on what to have for dessert tonight. What are the Nash Equilibrium strategies for this game? A) Jim and Dan both eat ice cream. B) Jim and Dan both eat ice cream OR Jim and Dan both eat cake. C) Jim and Dan both eat cake. D) Jim eats cake and Dan eats ice cream OR Jim eats ice cream and Dan eats cake.

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5. Which of the following is an example of the tragedy of the commons? A) Television's popularity has become a common tragedy in our society. B) Tuna in the ocean are being over harvested because it is difficult to prevent anyone from fishing for tuna.

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