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Unformatted text preview: Page 1 of 6 Department of Economics Prof. Gustavo Indart University of Toronto October 21, 2005 ECO 100Y L0101 INTRODUCTION TO ECONOMICS Midterm Test #1 L A S T N A M E F I R S T N A M E STUDENT NUMBER INSTRUCTIONS : 1. The total time for this test is 50 minutes. 2. This exam consists of two parts. 3. This question booklet has 6 (six) pages. 4. Aids allowed: a simple calculator. 5. Use pen instead of pencil . DO NOT WRITE IN THIS SPACE P a r t I /10 Part II 1. /15 2 . /15 T O T A L /40 /100 Page 2 of 6 PART I (10 marks) Instructions: Enter your answer to each question in the table below. Only the answers recorded in the table will be marked. Table cells left blank will receive a zero mark for that question. Each question is worth 2.5 (two and one-half) marks. No deductions will be made for incorrect answers. 1 2 3 4 1. Suppose the supply curve for breakfast cereals is upward sloping. Suppose also that as average household income increases we observe a fall in the price of breakfast cereal. We can conclude that breakfast cereal is a(n) a) luxury good b) substitute good c) inferior good d) normal good e) necessity good 2. Suppose the government decides to cancel an effective price floor that it had previously imposed on a...
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