Economics 1 - Fall 2004 - Train - Final Answers

Economics 1 - Fall 2004 - Train - Final Answers -...

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Department of Economics Professor Kenneth Train University of California, Berkeley Spring Semester 2004 ECONOMICS 1 FINAL EXAMINATION May 14, 5-8 p.m. INSTRUCTIONS 1. Please fill in the information below: Your Name: _________SUGGESTED ANSWERS______________________ Your SID# : ______________________________________________________ GSI’s Name: _____________________________________________________ Section Number (Days/Time): _____________________________________________ Todd Gilman = MW 1-2 in 425 Latimer and MW 2-3 in 2 Evans Sally Kwak = MW 8-9 in 433 Latimer, MW 9-10 in 105 Latimer, T-Th 8-9 in 425 Latimer Justin Park = MW 9-10 in 24 Wheeler; MW 8-9 in 285 Cory Jeff Butler = MW 1-2 in 185 Barrows, MW 2-3 in 175 Barrows Kenny Kuhn = MW 1-2 in 56 Hildebrand, MW 2-3 in 7 Evans, T-Th 8-9 in 3113 Ethcheverry David Zaft = T-Th 8-9 in 56 Hildebrand, T-Th 2-3 in 106 Wheeler Juanito Rus = T-Th 9-10 in 240 Mulford, T-Th 8-9 in 321 Haviland Shanan Alper = T-Th 4-5 in 175 Barrows, T-Th 5-6 in 5 Evans Si-Yeon Lee = MW 2-3 in 285 Cory, T-Th 9-10 in 122 Barrows 2. The exam ends at 8:00 p.m. 3. If you finish after 7:45, please remain in your seat until the end of the exam. 4. When time is called, stop writing. 5. There are a total of 180 points, 7 questions, and 12 pages (including this cover sheet and a blank last page). Points for each question are in brackets. 6. Answer the questions in the space provided. (NO BLUE BOOKS). If you need extra room to answer questions, use the backs of pages and the last blank page. 7. Calculators are not permitted. Do not turn the page until you are told to begin the exam.
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[30 pts.] True/False/Uncertain. Say whether the statement is true, false or uncertain and explain. No points will be given for answers without explanations. a) If we want to know the inflation rate between 2002 and 2003, it makes no difference if we use a CPI with a base year of 1975 or of 1995. UNCERTAIN: If the representative basket has not changed, we’ll get the same answer. However, if the basket of goods has changed (which is likely over this period – e.g. computers), the answer we get will depend on which base year (and thus which basket of goods) we are looking at. b) At equilibrium in a perfectly competitive market without externalities it is possible for MWTP to be greater than marginal cost. FALSE: The definition of equilibrium in a competitive market without externalities has P = MC = D = MWTP. c) In a market if the demand curve is very elastic and the supply curve very inelastic, producers pay most of the burden for an excise tax. TRUE: A flat demand curve or a steep supply curve imply that the producers pay most of the tax burden, so when combined the producers surely pay most of the burden. 5 points
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This test prep was uploaded on 04/01/2008 for the course ECON 1 taught by Professor Martholney during the Spring '08 term at University of California, Berkeley.

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Economics 1 - Fall 2004 - Train - Final Answers -...

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