MT1F09Answers - ECO 304K INTRODUCTION TO MICROECONOMICS...

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1 ECO 304K: INTRODUCTION TO MICROECONOMICS Unique # 33645 Fall 2009 Prof. Wiseman Midterm 1 Instructions: 1. Please write your name and UTEID here: ____________________________________________________________ 2. Please sign here: ____________________________________________________________ 3. The exam should include 5 pages (counting this cover sheet), plus two additional pages of blank scratch paper. If your exam is missing any pages, please raise your hand. 4. Answer the questions in the space provided on the test sheet or on the reverse side. Write your name and UTEID on each page. 5. Unless a question indicates otherwise, you may assume that market supply and demand curves are neither perfectly flat nor perfectly vertical. 6. All exams must be turned in by the end of the class period, at 4:50. Late exams will get a score of zero. Turn in all pages. 7. You are a good economist. Allocate your time accordingly – do the easy questions first. Please do not cheat. 8. Scores for the exam are as follows: Points Grade Points Grade Points Grade 30 100 20 72 10 42 29 98 19 69 9 38 28 95 18 66 8 34 27 92 17 63 7 30 26 89 16 60 6 26 25 86 15 57 5 22 24 83 14 54 4 18 23 80 13 51 3 13 22 77 12 48 2 9 21 74 11 45 1 5 0 0
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2 Name and UTEID:___________________________________________________ 1 . Briefly describe and show graphically what (if anything) will happen to outcomes in the following situations: a. (2 points) Suppose that the entire U.S. supply of flu vaccine for this winter is discovered to be defective. What happens to outcomes in the market for hand sterilizer lotion? Vaccine and lotion are substitutes, so demand for lotion will increase. Equilibrium price and quantity rise. b. (2 points) Tightened financial regulations increase the cost to lenders of providing home mortgages. At the same time, the recession means that potential home-buyers have less income to spend on homes.
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This note was uploaded on 02/14/2010 for the course ECO 304K taught by Professor Hickenbottom during the Spring '10 term at University of Texas.

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MT1F09Answers - ECO 304K INTRODUCTION TO MICROECONOMICS...

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