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AK First Midterm F09 version 5-2

# AK First Midterm F09 version 5-2 - ECONOMICS 211 FIRST...

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ECONOMICS 211 FIRST MIDTERM EXAMINATION, Fall 2009 (2 hours, 100 points) Calculators are allowed on this exam. NAME: __________________________________________________________________________ PLEDGE:_______________________________________________________________________________________ _________________________________________________________________________________________________ _________________________________________________________________________________________________ PART 1: MULTIPLE CHOICE: Circle the correct answer (3 points each; 36 points in total) 1. Scarcity exists when ( a) the availability of a resource is less than the desired amount. (b) the availability of a resource is greater than the desired amount. (c) the availability of a resource is less than the needed amount. (d) the availability of a resource is greater than the needed amount. 2. Suppose Mickey decides to attend summer school instead of working. The tuition is \$3,000, and books and supplies cost \$500. If Mickey chose to work, the salary would have been \$6,000. Mickey’s opportunity cost is valued at (a) \$3,000. (b) \$3,500. (c) \$6,000. (d) \$9,500. 3. Sarah’s demand curve for whiskey has the same slope as Pete’s; however, it lies to the right of Pete’s. At the same price, (a) Sarah’s elasticity of demand is higher. (b) Pete’s elasticity of demand is higher. (c) Sarah’s elasticity of demand is the same as Pete’s. (d) Pete consumes more. 1

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4. If there is a way of reallocating resources to make at least one person better off without making anyone else worse off, the market is (a) in equilibrium. (b) normative. (c) efficient. (d) inefficient. 5. All of the following statements are examples of normative economic analysis EXCEPT (a) sales taxes should be increased to generate more revenue for the government. (b) the federal government should allocate more funds to environmental issues. (c) society will be better off if some funds are shifted from defense to education. (d) an increase in taxes on cigarettes will reduce the demand for cigarettes. 6. Which of the following would shift the demand for chocolate chip cookies? (a) the price of chocolate chips cookies. (b) the price of sugar. (c) the price of sugar cookies. (d) the development of a faster mixing machine that prepares the cookie dough. 7. Suppose Marcy’s new job pays a higher income than her previous job. As a result, she buys more Boston lettuce and less iceberg lettuce. For Marcy, (a) Boston lettuce is an inferior good and iceberg lettuce is a normal good. (b) Boston lettuce is a normal good and iceberg lettuce is an inferior good. (c) both Boston lettuce and iceberg lettuce are normal goods. (d) both Boston lettuce and iceberg lettuce are inferior goods. 8.
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AK First Midterm F09 version 5-2 - ECONOMICS 211 FIRST...

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