Micro Midterm Dec 2008

Micro Midterm Dec 2008 - CARLETON UNIVERSITY ECON 1000...

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CARLETON UNIVERSITY ECON 1000 Section B Mid-term Exam, December 2008 George Kowalski 12/16/2008
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PART A---MULTIPLE CHOICE. DO ALL QUESTIONS. 2 MARKS EACH. Answer on attached answer sheet and be sure to detach and hand in with your exam. 1. Any point on a country's production possibilities frontier represents a combination of two goods that an economy a. will never be able to produce. b. can produce using all available resources and technology. c. can produce using some of its resources and technology. d. may be able to produce sometime in the future with additional resources and technology. 2. Table 2 Labor Hours needed to make one unit of: Amount produced in 160 hours: Quilts Dresses Quilts Dresses Helen 40 10 4 16 Carolyn 80 16 2 10 2. Refer to Table 2 . The opportunity cost of 1 quilt for Helen is a. 2 dresses. b. 3 dresses. c. 4 dresses. d. 5 dresses. 3. Figure 3 3. Refer to Figure 3 . The movement from D to D 1 could be caused by a. an increase in price. b. a decrease in the price of a complement. c. an increase in technology. d. a decrease in the price of a substitute. 2
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There are very few, if any, good substitutes for motor oil. Therefore, a. the supply of motor oil would tend to be price elastic. b. the demand for motor oil would tend to be price elastic. c. the demand for motor oil would tend to be price inelastic. d. the demand for motor oil would tend to be income elastic. 5. When the local used bookstore prices economics books at $15.00 each, they generally sell 70 per month. If they lower the price to $7.00 each they sell 90. Given this, we know that the elasticity of demand for economics books is a. 2.91, so this store should lower price to raise total revenue. b. 2.91, so this store should raise price to raise total revenue. c. 0.34, so this store should lower price to raise total revenue. d. 0.34, so this store should raise price to raise total revenue. USE THE MID-POINT METHOD. Figure 6 6. Refer to Figure 6 . A binding price ceiling would exist at a price of a. $14.00. b. $12.00. c. $10.00. d. $8.00. 7. Public goods are a. excludable but not rival. b. rival but not excludable. c. both excludable and rival. d. neither excludable nor rival. 3
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This note was uploaded on 02/26/2010 for the course ECON 1000 taught by Professor Unknown during the Spring '10 term at Carleton.

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Micro Midterm Dec 2008 - CARLETON UNIVERSITY ECON 1000...

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