Midterm1_F08(2)

Midterm1_F08(2) - ECONOMICS 211 FIRST MIDTERM EXAMINATION Fall 2008(2 hours 100 points NAME PLEDGE PART 1 MULTIPLE CHOICE Circle the correct

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ECONOMICS 211 FIRST MIDTERM EXAMINATION, Fall 2008 (2 hours, 100 points) NAME: __________________________________________________________________________ PLEDGE:_______________________________________________________________________________________ _________________________________________________________________________________________________ _________________________________________________________________________________________________ PART 1: MULTIPLE CHOICE: Circle the correct answer (3 points each; 18 points in total) 1. (3 points) If Amtrak Train Co. raises the price of its passenger tickets, then a) the company’s total revenue will increase if demand is unitary elastic with respect of price. b) the more price elastic the demand at the original market equilibrium the greater will be the decrease in the number of tickets demanded. c) the greater the cross elasticity between Amtrak train tickets and Greyhound bus tickets, the greater the decrease in demand for bus tickets. d) the company's total revenue will decrease if it is a normal good. 2. (3 points) Which of the following statements would you expect to be true about T-shirts and clothing? a) Compared with clothing, T-shirts have a lower price elasticity of demand because they are specifically defined. b) Because T-shirts are clothing, but not all clothing is T-shirts, T-shirts would have a lower price elasticity of demand than clothing. c) T-shirts would have the same price elasticity of demand as clothing. d) Clothing has a lower price elasticity of demand because it is more broadly defined. 1
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3. (3 points) Which of the following is a TRUE statement about a normal good? a) the income elasticity of the good is indeterminate in sign. b) when the price decreases, it is always true that more of the good is consumed. c)
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This note was uploaded on 12/07/2009 for the course ECON 211 taught by Professor Na during the Fall '08 term at Rice.

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Midterm1_F08(2) - ECONOMICS 211 FIRST MIDTERM EXAMINATION Fall 2008(2 hours 100 points NAME PLEDGE PART 1 MULTIPLE CHOICE Circle the correct

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