p2 sp03 - Your Name Check Your TA’s Name Vladimir_Raji...

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Your Name: _____________________________________________________ Check Your TA’s Name: ____________ Vladimir ____________Raji ______________ Joe _____________ Jing _____________Jose . Econ 101 - Wissink - S03 PRELIM #2 J. WISSINK April 8, 2003 INSTRUCTIONS 1) There are three sections in this exam. 2) ANSWER ALL QUESTIONS. TOTAL POINTS = 100 3) Part I: 14 multiple choice questions (3 points each) Part II: 3 short essay questions (12 points each) Part III: 1 problem (22 points each) 4) Read all questions carefully . 5) Write legibly and remember to label all graphs . 6) Total time = 90 minutes. GOOD LUCK P.S.: There is a blank work sheet at the end of this exam for your use.
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2 apples bananas IC1 IC2 A B C D E Part I. Multiple choice. Do ALL of the following multiple choice questions: Read each question carefully and CIRCLE the best answer. It often helps to jot down a quick graph or do some work next to the question before searching for the answer. 1. The XYZ corporation produces yo-yos. Which one of the following will most likely shift the position of the firm’s short-run marginal cost curve ? A. An increase in the licensing fee needed to operate the business. B. A decrease in the incomes of consumers who buy yo-yo. C. A decision by the XYZ corporation to temporarily produce fewer yo-yos. D. An increase in the price the string used to make yo-yos. E. An increase in the salary offered by Cornell University to the owner/entrepreneur of XYZ Yo-Yos to leave XYZ and come and teach at Cornell. 2. Assume empire apples are produced in a perfectly competitive industry. Assume that the Red Apple Company, a perfectly competitive firm producing empire apples, is currently maximizing profit and earning a zero economic profit. The demand for empire apples has just increased. Which one of the following will occur in the short run? 3. The graph on the right represents two indifference curves and a number of bundles, labeled A through E. Which one of the following statements about this graph is false ?
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3 x=cassetts marginal cost average variable cost average total coat 300 $6.00 $8.80 $15.47 400 $6.40 $7.80 $12.80 500 $7.00 $7.00 $11.00 600 $7.65 $7.10 $10.43 700 $8.40 $7.20 $10.06 800 $10.00 $7.50 $10.00 900 $12.40 $8.00 $10.22 1000 $12.70 $9.00 $11.00 Acme's cost information
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