Quiz3 - University of Wisconsin-La Crosse Department of...

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University of Wisconsin-La Crosse Department of Economics ECO110 Fall 2008 Midterm Exam No. 2 Associate Professor, Lisa Giddings Thursday, November 13th, 2008 Name ______________________________ Academic Integrity Resolution We, the students of UW-L, in the course of ECO110, believe that academic honesty and integrity are fundamental to the mission of higher education. We, as students, are responsible for the honest completion and representation of work and respect for others’ academic endeavors. It is our moral responsibility as students to uphold these ethical standards and to respect the character of the individuals and the university itself. Also, we understand that its creator has placed a curse upon this exam. If we cheat in any way shape or form, the act will generate negative karma on us and ultimately cause something (at least) equal and opposite to happen to us. It may be something little like slipping on the ice in front of all of my friends and having to endure their laughing and ridicule, or it may be something much more dramatic like having a girlfriend/boyfriend cheat on me. In any case, I recognize that tradeoff as I embark on this exam. In signing below I am stating that I did not receive assistance from anyone or any item during the course of this exam in answering the following questions. Signature:_______________________________________ Exam 2 November 13 th , 2008 Page 1
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This exam consists of 25 multiple choice questions (2 points each) and five short answer questions ( 10 points each) and one bonus question (value to be determined). You have approximately 90 minutes to complete the questions (2:15 – 3:40 for section 013 and 3:55 – 5:20 for section 014). Multiple Choice Questions: Circle the best answer. 1. Alice says that she would buy one banana split a day regardless of the price. If she is telling the truth, a. Alice’s demand for banana splits is perfectly inelastic b. Alice’s price elasticity of demand for banana splits is 1. c. Alice’s income elasticity of demand for banana splits is 0. d. None of the above answers is correct. Ans: A 2. When demand is inelastic, a decrease in price will cause a. An increase in total revenue. b. A decrease in total revenue. c. No change in total revenue, but an increase in quantity demanded. d. No change in total revenue, but a decrease in quantity demanded. Ans: B 3. If the price elasticity of demand for tuna is 0.7, then a 1.5% increase in the price of tuna will decrease the quantity demanded of tuna by a. 1.05% and tuna sellers’ total revenue will increase as a result. b. 1.05% and tuna sellers’ total revenue will decrease as a result. c. 2.14% and tuna sellers’ total revenue will increase as a result. d.
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Quiz3 - University of Wisconsin-La Crosse Department of...

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