Eco100CarrSolvedTest1s

Eco100CarrSolvedTest1s - Department of Economics University...

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Unformatted text preview: Department of Economics University of Toronto In) DJ [1 Professor J. L. Carr November 12, 2004 1:00—2:00ptn ECONOMICS 100 Term Test i (30 MARKS) Answer the following questions TRUE, FALSE or LNCERTAIN. Give a brief explanation of your answer. Marks will be given entirely for your explanation. A bad harvest will always result in a decrease in revenue from agricultural activities. Removal of binding rent controls is had for the economy since it will result in tenants paying higher rents. If the income effect is greater than the substitution effect, then the demand curve will be upward sloping. (20 MARKS) The Ontario Government has announced its intentions to freeze land development (Le. prevent land from being used for residential or commercial deveIOpment) on 1.8 million acres of private land in the Oak Ridges Moraine and the Niagara Escarpment in Ontario. \ 3. Explain what affect this action will have on the price of land that is frozen from development and on the price of land that is unaffected by the government development bans. b. Explain the affect of this action on the price of housing in the affected areas. c. Does any group ofOntarians gain from such an action? Explain. d. Does any group of Ontarians lose from such an action'.’ Explain. E1015579fi§fépk(‘&gifl£¢9 7 ._ )5" ‘ "iikégxiégaw\\ Pf ' ’7 " I f Z TX}; ,. ” [L if ,, H .N 1 f I: L.,._’i:If " " ’9'" I 7 ' 7 ? 7, T N ,V echxsflza A Vimcf c, . 7, ’7 '7 7 V . H” . .¢, "7 MW,“ . My”, “MW”; . . ,4 A, J 'Q7'fig:63;Sin; c c,,g§.f§fiifs;i'f;§: ” i ,: 71’:;_;f: 3.[_;{,fl.f; ‘17;ng1:; 11:? IL Q4. Q; L; gggmig~<xfx.film:.. QM I j fl ,A 7 if Riggs; flags? f f Q] ; mw’fhfifl . Q ‘ ii i, f' Q T ' ’ci’r’gicxvj,’ ,. ' age. a . , ‘ "iii: 44%; 1253ka i ‘ ‘ u , . ' ' b‘sisawufm ,. m P \t 7 \e55. VA \ . . ,, ,1 . A , > “9543-le . Q.‘ N ‘ ‘ .. 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Marks will be given entirely for your explanation. . The current Ontario Liberal government has increased the minimum wage from $6.85 an hour to $8.00 an hour (by February 2007). Since firms have to pay workers a higher wage, all low income workers should experience an increase in their earnings due to the increase in the minimum wage. . An abundant harvest will always result in increasing income for farmers. . If average costs decrease as output increases, it must be true that marginal costs will also be decreasing. . Consider a firm in a perfectly competitive industry which produces 100 units of output at a total cost of $1000 and sells its output "at $12 a unit. Since the firm is producing its output at a cost of $10 a unit and selling the output at $12 a unit, profit maximization dictates that this firm should increase its output. . To maximize consumer satisfaction in a world where there are two goods, consumers should allocate their income such that the marginal utility from consuming one more unit of good one equals the marginal utility of consuming one more unit of good two. Lao/00 COAT km file,er l ' ' @ PALSIQ Q068— SW‘C: *Vxe g)er \l\o\re b (0:) a \ME)\-a’ Wang, 9m \0w {Acovwe weckzaIWdr quonkfis acknoch w(\\ 5o down (3N 'Hfi: cqu2\{\r{uym qqufihj) a»; \OJQQr hung} u{\\ 30 A“‘*”‘ "FWM L—\ +0 Li. —‘ Even Wubk L1 Mf’rs ox— \okoo w<\\ eerruncc on TACJ‘cofic in Mgr '{fi cont) L‘_\_.L ?eo()\o w{\\ ‘Bfi \ofid or??? am! v4\'\\ Auras-etc extomence Q Acct”?- ‘m UNIV \AcoM—c . FALSE\ A“ o‘cumlxo-AA- Me-(VcsA' w{\\ SM? Xv 4—K 50MB») cum: +0 +‘«¢ mgvc =b N, I $27. New Crcce‘pD OS} germs (3 w‘\\ CMDNV ézeero‘irb On W ‘6“ (3 Am“ am; 0; CALM. \g; (ACMM‘A FD‘. —- e\os’y¢c_ zibTox w{\\ 'x-Acfcobc. _§A¢\os?\\'c. szL w<\\ away. -— amt dosh“; :D'W. s+0~~\ uchdmc}. A5 scan in We. Ambmm) AC Accrcobcs as ou’rpu): Mcfeascé QM“ °~\\ guonkvk’cs \eSJ Mn (3. (bu-V MC. Con kc increas'ilb Of" diecrcogiro 2?“- AAA; SMt my 0,8: Q5. @ UN cEOJMN\ Even WVBM K5 accoA-er W prC‘;$(O/Q€°’g'u’ Mavimm’n‘m Co Ada/mad ca We OUX'QUA’ wkflfi P=MC~ g'mcc MC can he cqw\,\e$$ or ataa-\¢r Mn S‘VL C0N‘05r CMcKu<§~c w »\-\~— 130M @ FALsP. \V\ 0. \~°(\A 0,? )rv-o sooAs) We. u’y(\{\-3 M&rKNQ14L)ffon arthrcon (5 Ma. MUL T: L 3L2. M0§m\ gmM Can’t speM' OA 80ch ’1 5\NN~\J eqw\ Department of Economics University of Toronto Professor J. L. Carr November 10, 2006 11002001313} ECONOMICS 1.00 Term Test 1 Answer the following questions TRUE, FALSE or UNCERTAIN. Give a brief expianation of your answer. Marks will be given entirely for your explanation. U3 fJu This past summer the Federal Government reduced the GST (i.e. goods and service sales tax on a wide range of goods) from 7% to 6%. On those goods with a perfectly inelastic demand, it can be expected that the price of the good will 35;; fall by the full amount of the GST reduction Revenue from the sale of a good wii‘l decrease if price rises and demand is inelasoc. Recenzly there has been a severe fall in the fish stocks in the Atiantic fishing industry. {f meat and fish are substitute products, then the severe fail in fishing stocks will result in a rise in the price of meat Suppose low income Canadians spend a larger fraction of their income on bread than high income Canadians and the government imposed a binding price ceiling on the bread industry to permanently benefit low income Canadians. Such an action will benefit low income Canadians as it will ailow all low income Canadian consumers to purchase bread at a lower price. If sirloin steak is a normal good, then a fall in the price of sirloin steak will result in an increased quantity demanded for sirloin steak only if the substitution effect is greater than the income effect. ., .79: ‘ ;, if: ' f W . L ,_ , ‘_ _ _ ' [Iw_.L(%§§‘c§fé§i£fig;f ' N ,V , 3 ‘ ‘ 7 :,L‘.A;fl,,_,w.,_.r., k gas.uxsy:ggq,iffiié?fffwgééfi.R1127 (‘I AL ) 1;)»; 5.: L: m0 100 Max. (,ch “Nasxt‘k A: a reduckw‘ 'm, faxes.) m 01., \ (\_ 5 (ii ctq v" k.) gath- ) ‘ 7 ’7 M dash; ‘ 5mm page; Aegean m 1 my 95$" . ; gc‘ttfi—HLC‘L. ,, 7, m“ 9. . ;.__m¢ic¢$; “9 9331;: u 4,\ s, cwmcii_;kfgi fl ' «its; s’ 7 (a ‘ I ‘ . ‘ ' ‘ , : ‘ J . J fifiit ESQ if): L I Twi\\l_w:§{;c[£c§x -‘ - *7 } \J‘ WNW, fiammé (or {YMCA~ wi\\ N! (5035;: idea—«SMCR‘ \A-‘E‘J 5’( P “gar Mém‘kl 34,3) F A LSEL i _ k ‘ 7 ' , ' I P: ,bxaéuu‘fl , igg , angmw on 9 mm m , ME a 54:03“; . 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Eco100CarrSolvedTest1s - Department of Economics University...

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