ECON 1 Summer 96 M. Olney MIDTERM 1. Is "maximizing utility" the same thing as "being selfish?" Explain. 2. Define "short run." Define "long run." Why is the long run longer for Stanford University than it is for Ned's Bookstore? 3. Feiner outlines three economic paradigms: conservative/free market, liberal/imperfectionist, and radical/exploitation schools. For each statement below, identify which paradigm characterizes the person making the statement. Briefly (1-2 sentences) defend your choice. "A hurricane is coming and everyone needs emergency supplies! Grocers want to increase the price of batteries. The government shouldn't let them do so." "We do not need affirmative action programs; profit-maximizing firms have an incentive to eliminate discrimination." 4. Dairy prices are higher this summer because prolonged drought in the areas where feed for cattle is grown has increased the price of feed. Explain. Supplement your answer with graph(s). 5. The current fare to cross the Bay Bridge into San Francisco is $1.00.
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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 Berkeley.