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
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3.Which of the following demonstrates the law of demand? 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 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
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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 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 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 ? Figure 9
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