EC201 Practice Exam #2 Fall 2007

EC201 Practice Exam #2 Fall 2007 - NORTH CAROLINA STATE...

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Unformatted text preview: NORTH CAROLINA STATE UNIVERSITY DEPARTMENT OF ECONOMICS Prof. L. A. Craig EC201 Fall Term 2007 Second Exam READ THESE INSTRUCTIONS BEFORE TAKING THE EXAM!!!! 1. The examination consists of 10 multiple choice questions worth 2 points each; 5 questions about pricing stocks and bonds worth 2 points each; 5 true-false questions worth 2 points each; and 2 extended problems, which are worth 5 points each; for a total of 50 points (or, per your syllabus, 25% of your final grade). Please make sure that your copy of the exam has all of the questions. 2. For the multiple choice questions, simply circle the best choice. For the true-false questions, if the statement is true, then simply write True, and move on. If, however, it is false, then write False, and briefly explain why it is false. 3. Unless otherwise stated, all of the multiple choice questions assume that demand curves are negatively sloped and supply curves are positively sloped. 4. When you have finished the exam, turn it in at the front of the room. Barring catastrophe, your graded exam will be returned on Tuesday, November 13. I PLEDGE THAT I HAVE NEITHER GIVEN NOR RECEIVED UNAUTHORIZED AID ON THIS ASSIGNMENT. IN ADDITION, MY SIGNATURE BELOW CONFIRMS MY ACCEPTANCE OF THE NCSU HONOR CODE. (Note: Students who refuse to accept the terms of the Honor Code will not have their exams graded.) Printed name:________________________________________________________________________ Signature:___________________________________________________________________________ Multiple choice (2 points each) - Please circle the best answer of those given. 1. Suppose you are asked to analyze the soft drink market. Suppose soft drinks consist of, among other things, corn sweeteners. Further suppose that there is an unusually poor yield of corn this year. Ceteris paribus , you conclude that the equilibrium price of soft drinks will _________ and the equilibrium quantity exchanged will _________. A. increase, increase B. increase, decrease C. decrease, increase D. decrease, decrease 2. Refer back to the previous question. Suppose the price elasticity of demand for soft drinks is 1.75. Ceteris paribus, as a result of the small corn crop it follows that soft drink producers will see their prices _________; while their total revenue will _________. A. increase, increase B. increase, decrease C. decrease, increase D. decrease, decrease 3. Suppose the price elasticity of demand for Dog Chow is 0.5. It follows that a 5% decrease in the price of Dog Chow will result in a: A. 2.5% increase in the quantity demanded of Dog Chow. B. 1% decrease in the quantity demanded of Dog Chow. C. 1% increase in the quantity demanded of Dog Chow....
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This note was uploaded on 08/30/2009 for the course CH CH 221 taught by Professor Gorman during the Spring '08 term at N.C. State.

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EC201 Practice Exam #2 Fall 2007 - NORTH CAROLINA STATE...

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