Midterm 2006 - questions

# Midterm 2006 - questions - UBC Commerce/ FRE 295 MIDTERM...

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UBC Commerce/ FRE 295 MIDTERM EXAM October 23, 2006 NAME:__________________________ STUDENT NUMBER ________________ SECTION: _______________________ PROFESSOR’S NAME: _______________________ Instructions: This exam will be marked out of 100. You will have 2 hours to do the exam. There are two parts to this exam. The first part is true-false questions. Answer all of these questions. Part II consists of longer questions. You must choose 4 out of 5 of the longer questions in Part II . For all parts, provide your answers in the space provided. This midterm has 18 pages. The last page is blank. Check now to make sure you have all pages and make sure your name, section, and student number are provided above. This is a closed-book exam. You may not use books or notes. You may use a non- graphing calculator. GRADES True/False ________ / 40 Long Answers: 1. ________ / 15 (answer 4 out of 5) 2. ________ / 15 3. ________ / 15 4. ________ / 15 5. ________ / 15 TOTAL ________ / 100 1 Section 101 MW 1:00 pm Ratna Shrestha Section 102 Tu-Th 4:00 pm James Vercammen Section 103 Tu-Th 8:30 pm Veikko Thiele Section 104 Tu-Th 10:00 am Kate Foreman Section 105 Tu-Th 11:30 pm Kate Foreman Section 106 Tu-Th 2:30 pm Ratna Shrestha Section 107 Tu-Th 4 :00 pm Ratna Shrestha

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PART I TRUE-FALSE QUESTIONS: Mark each question as true or false, by putting an “X” in the appropriate box. There is one mark for each true-false question. 1. Researchers estimated the following demand function for Plasma TVs in the Lower Mainland: Q d = 1,000,000 – 200P. DVD players are also being sold, and these players are a complement for Plasma TVs. True False The demand for Plasma TVs is relatively elastic for a high quantity of sales, and relatively inelastic for a low quantity of sales. The elasticity of demand for Plasma TV’s equals -1 if P = \$2,500. When the price for Plasma TVs increases, we can predict that the demand for DVD players will also increase. If there is only one firm producing and selling Plasma TVs, this firm must be maximizing profits if it is producing in the elastic region of its demand curve. 2. A government artificially setting price at a level below the equilibrium price (i.e. imposing a price ceiling) will: True False Decrease producer surplus and decrease the sum of consumer and producer surplus. Always result in an increase in consumer surplus. Always cause the aggregate cost of production by firms to decrease. Result in no impact on equilibrium quantity if either supply or demand is perfectly inelastic. 2
3. Industry supply of a homogeneous product comes from of two types of perfectly competitive producers, A and B. The aggregate supply curve for type A producers is given by Q A = -5 + 0.5P and the aggregate supply curve for type B producers is given by Q B = -8 + 0.5P. True False

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## This note was uploaded on 01/03/2011 for the course COMM 290 taught by Professor Brian during the Winter '09 term at UBC.

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Midterm 2006 - questions - UBC Commerce/ FRE 295 MIDTERM...

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