ECON1000%20exam%20December%20071

# ECON1000%20exam%20December%20071 - PART AMULTIPLE CHOICE DO...

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PART A—MULTIPLE CHOICE. DO ALL QUESTIONS. 2 MARKS EACH Answer on attached sheet. Be sure to detach and hand in with your exam. Figure1 1. Refer to Figure 1 . What is the opportunity cost to society of bananas when considering the movement from point A to point C? a. 50 baseballs b. 100 baseballs c. 100 bananas d. 300 bananas Figure 2 2. Refer to Figure 2 . For Ben, the opportunity cost of 1 pound of ice cream is a. 4 pounds of cones. b. 1/2 pound of cones. c. 2 pounds of cones. d. 1/4 pound of cones.

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3.Which of the following demonstrates the law of demand? a. Jon buys more pretzels at \$1.50 each since he got a \$1 raise at work. b. Melissa buys fewer muffins at \$0.75 each than at \$1 each. c. Dave buys more donuts at \$0.25 each than at \$0.50 each. d. Kendra buys fewer Snickers at \$0.60 each since the price of Milky Ways fell to \$0.50 each. 4.When the price of bubble gum is \$0.55, the quantity demanded is 400 packs per day. When the price falls to \$0.45, the quantity demanded increases to 600. Given this information and using the midpoint method, you know that the demand for bubble gum is a. inelastic. b. elastic. c. unit elastic. d. perfectly inelastic. Figure 5 5. Refer to Figure 5 . If point B is unit elastic and if the price of the product declines in the A range of the demand curve we can expect total revenue to a. increase. b. decrease. c. stay the same. d. decrease, then increase. Figure 6
6. Refer to Figure 6 . If the government imposes a binding price ceiling in this market at a price of \$5.00, the result would be a a. shortage of 20 units. b. shortage of 10 units. c. surplus of 20 units. d. surplus of 10 units. Figure 7 7. Refer to Figure 7 . Assume that the consumer depicted in the figure has an income of \$20. The price of Skittles is \$2 and the price of M&M's is \$2. This consumer will choose to optimize by consuming a. bundle A. b. bundle B. c. bundle C. d. bundle D. Figure 8

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8. Refer to Figure 8 . Which area represents the increase in consumer surplus when the price falls from P 1 to P 2 ? a. ABD b. ACF c. BCDE d. DEF e. BCFD Figure 9 9. Refer to Figure 9 . The amount of deadweight loss associated with the tax is equal to a. P 3 A C P 1 . b. A B C. c. P 2 A D P 3 . d. P 1 D C P 2 .
Figure 10 10. Refer to Figure 10 . With free trade, consumer surplus would be a. \$45. b. \$80. c. \$210. d. \$245. Figure 11 11. Refer to Figure 11. If this market currently produces Q 3 , total economic well-being would be increased if a. production decreased to Q 2 . b. production increased to Q 4 . c. this product were no longer produced. d.

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## This note was uploaded on 11/01/2009 for the course MATH 1009 taught by Professor Dontknow during the Spring '08 term at Carleton CA.

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ECON1000%20exam%20December%20071 - PART AMULTIPLE CHOICE DO...

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