practice_final_2006_answers

practice_final_2006_answers - UCLA Economics 11 Fall 2006...

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UCLA Economics 11 – Fall 2006 Professor Mazzocco FINAL EXAM: Practice Answer Key NAME: _______________________________________ID:____________________ TA:__________________________________________________________________ Part 1:_ Multiple Choice 1. A decrease in demand is represented by a. a shift outward of the entire demand curve. b. a shift inward of the entire demand curve. c. a movement along the demand curve in a southeasterly direction. d. a movement along the demand curve in a northwesterly direction 2. If a rise in the price X causes less Y to be demanded, a. X and Y are gross complements. b. X and Y are gross substitutes. c. X and Y are net complements. d. X and Y are net substitutes. 3. Suppose that an individual has a constant MRS of shoes for sneakers of 1/2 : (that is, he or she is always willing to give up 1 pairs of sneakers to get 2 pairs of shoes). Then, if the price of sneakers is one third of the prices of shoes, he or she will a. buy only sneakers. b. buy only shoes. c. spend his or her income equally on sneakers and shoes. d. wear sneakers only 1/3 of the time. 4. If a consumer purchases only two goods ( X and Y ) and the demand for X is elastic, then a rise in the price of X a. will cause total spending on good Y to rise. b. will cause total spending on good Y to fall. c. will cause total spending on good Y to remain unchanged. d. will have an indeterminate effect on total spending on good Y .
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5. The own price elasticity of demand for good X is defined as a. percentage change in P X / percentage change in X . b. percentage change in X /percentage change in P X . c. percentage change in X /percentage change in income. d. percentage change in X /percentage change in P Y . 6. If the demand for a product is elastic, then a rise in price will a. cause total spending on the good to increase. b. cause total spending on the good to decrease. c. keep total spending the same, but reduce the quantity demanded. d. keep total spending the same, but increase the quantity demanded 7. If the demand faced by a firm is inelastic, selling one more unit of output will a. increase revenues. b. decrease revenues. c. keep revenues constant. d. increase profits. 8. The input demand functions that can be derived from cost functions are referred to as “contingent” or “conditional” demand functions because the functions: a. assume input costs are constant. b.
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practice_final_2006_answers - UCLA Economics 11 Fall 2006...

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