fall 2009 exam 2

# fall 2009 exam 2 - ECON 2106 Shelby Frost Exam 2 11:00 AM...

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ECON 2106 Shelby Frost Exam 2 11:00AM TR Fall 2009 Version A Page 2 This page is left blank intentionally.
Shelby Frost Exam 2 11:00AM TR Fall 2009 Version A Page 3 Name: __________________________ Date: _____________ "Multiple Choice: Choose the one alternative that best completes the statement or answers the question." 1. You have heard about a new light bulb that is costly to purchase but uses less electricity and thus allows you to save money on your utility bill. Suppose the new light bulb costs \$10 today, but next year your electricity bill will be \$50 lower. If the interest rate is 10%, what is the net present value of buying this new light bulb and using it for one year? A) \$55 B) \$40 C) \$35.45 D) –\$45.45 2. For Darryl, the optimum consumption bundle is the one that ________ his ________, given his budget constraint. A) maximizes; opportunity cost C) maximizes; utility B) minimizes; opportunity cost D) minimizes; utility Use the following to answer question 3: Figure: Budget Lines for Tea and Scones 3. (Figure: Budget Lines for Tea and Scones) For months now, Agnes has had \$20 per month to spend on tea and scones. The price of each cup of tea and each scone has been \$1. Which of the charts in the figure shows what will happen to her budget line if the price of a scone rises to \$2? A)

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## This note was uploaded on 01/19/2011 for the course ECON 11853 taught by Professor Brianallenhunt during the Fall '10 term at Georgia State University, Atlanta.

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fall 2009 exam 2 - ECON 2106 Shelby Frost Exam 2 11:00 AM...

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