test2_solns - Department of Economics University of Toronto...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Page 1 of 14 Department of Economics Prof. Gustavo Indart University of Toronto June 26, 2009 ECO 100Y INTRODUCTION TO ECONOMICS Midterm Test # 2 LAST NAME FIRST NAME STUDENT NUMBER Check your section of the course : L0201 (T/R from 2:00 to 4:00 PM) L5101 (T/R from 6:00 to 8:00 PM) INSTRUCTIONS : 1. The total time for this test is 1 hour and 50 minutes. 2. Aids allowed: a simple calculator. 3. Write with pen instead of pencil. DO NOT WRITE IN THIS SPACE Part I /40 Part II 1. /10 2. /10 3. /8 4. /12 5. /10 6. /10 TOTAL /100 SOLUTIONS
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Page 2 of 14 PART I (40 marks) Instructions : Multiple choice questions are to be answered using a black pencil or a black or blue ball- point pen on the separate SCANTRON sheet being supplied. Be sure to fill in your name and student number on the SCANTRON sheet! Write you class section on the SCANTRON sheet — either L0201 or L5101 — where it says “DO NOT WRITE IN THIS SPACE.” Each question is worth 2.5 marks. No deductions will be made for incorrect answers. Write your answers to the multiple choice questions ALSO in the table below. You may use this question booklet for rough work, and then transfer your answers to each multiple choice question to the table AND onto the separate SCANTRON sheet. Your answers must be on the SCANTRON sheet. In case of a disagreement, the answer to be marked is the one on the SCANTRON sheet. 1 2 3 4 5 6 7 8 C E B E A D E B 9 10 11 12 13 14 15 16 E D C B A D B C 1. Diminishing marginal utility means that if more of a good is consumed A) total benefit or utility derived from the good decreases. B) total benefit or utility derived from the good decreases as the price of the good falls. C) the benefit or utility of an additional unit decreases. D) the benefit or utility of an additional unit increases less as the price of the good falls. E) the benefit or utility of an additional unit decreases as the price of the good falls. 2. If an individual derives utility or satisfaction from the consumption of only two goods, she will maximize her utility or satisfaction when A) the ratio of the marginal utilities of these two goods is equal to one. B) the ratio of the marginal utilities of these two goods is greater than one. C) the ratio of the marginal utilities of these two goods is greater than the price ratio. D) the ratio of the marginal utilities of these two goods is less than the price ratio. E) the ratio of the marginal utilities of these two goods is equal to the price ratio. 3. Willy likes candy bars and popcorn. Candy bars sell for 50 cents and popcorn sells for $1 per bag. Willy is maximizing his utility at his present level of consumption of candy bars and popcorn. Now the price of candy bars jumps to $1 per bar. Which of the following statements is true in Willy’s new consumer equilibrium? A) The marginal utility of popcorn will increase.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/09/2010 for the course ECO ECO100 taught by Professor Inheart during the Spring '09 term at University of Toronto- Toronto.

Page1 / 14

test2_solns - Department of Economics University of Toronto...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online