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Fall07-Midterm1

# Fall07-Midterm1 - Econ 1 Midterm 1 Friday LAST NAME FIRST...

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Econ 1, Midterm 1 LAST NAME: ____________________________ Friday, October 19, 2007 FIRST NAME: ____________________________ STUDENT ID: ____________________________ TA: _____________________________________ SIGNATURE: ____________________________ DO NOT OPEN YOUR EXAM UNTIL INSTRUCTED TO DO SO!!! INSTRUCTIONS 1. Answer all multiple choice questions in the space provided below. 2. For the short answer, show all work. We reserve the right to deduct points from answers that are hard to read. 3. You may NOT use a calculator. 4. There are a total of 40 points. (25 pts multiple choice, 15 pts short answer) MULTIPLE CHOICE ANSWERS (1 point each) 1. ______ 2. ______ 3. ______ 4. ______ 5. ______ 6. ______ 7. ______ 8. ______ 9. ______ 10. ______ 11. ______ 12. ______ 13. ______ 14. ______ 15. ______ 16. ______ 17. ______ 18. ______ 19. ______ 20. ______ 21. ______ 22. ______ 23. ______ 24. ______ 25. ______

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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A decrease in the price of a game of bowling shifts the A) demand curve for bowling balls rightward. B) demand curve for bowling balls leftward. C) supply curve of bowling balls leftward. D) supply curve of bowling balls rightward. 2) Refer to the above figure. Mario is self - sufficient and so is Mia. Each produces 6 dishes of pasta and 4 pizzas. Mario and Mia decide to specialize and trade. After they have specialized and traded, compared to the initial situation, Mia's opportunity cost of pasta has ________ and Mario's opportunity cost of a pizza has ________. 3) Which of the following correctly describes how price adjustments eliminate a shortage? 1
Price (dollars per disc) Quantity demanded Price (dollars per disc) Quantity supplied 4 36,000 4 4,000 8 32,000 8 8,000 12 28,000 12 12,000 16 24,000 16 16,000 20 20,000 20 20,000 24 16,000 24 24,000 28 12,000 28 28,000 32 8,000 32 32,000 36 4,000 36 36,000 4) The above table gives the demand and supply schedules for compact discs. Suppose that the price of a compact disc player increases, resulting in the demand for compact discs decreasing by 8,000 units at all prices. What are the new equilibrium quantity and equilibrium price of compact discs?

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