midA-302_SP10_TOOSSIS - Midterm Version A March 17 2010...

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Midterm Economic 302 Name: Version A Instructor: Toossi Net-ID: March 17 2010 Section: Before beginning the exam, please verify that you have 9 pages with 40 questions in your exam booklet. On Your scantron sheet, you must place your full name, university ID number, Net-ID & section number. Make sure you bubble in the correct exam version. Please choose the BEST response to the following questions and record your answers on the scantron sheet provided with a number 2 pencil . Only answers marked on the scantron will be counted. Good Luck! Use the following to answer questions 1-2: Consider the market for apartment rental. Suppose that there are 25 people who had a reservation price of $500, and the 26 th person had a reservation price of $200. 1) What would be the free market equilibrium price be if there were 26 apartments to rent? A) $500 B) $200 C) Any price greater than $200 and less than $500 D) None of the above 2) What will be the consumer surplus? A) $12500 B) $7800 C) $7500 D) 0 3) If the price of good X (on horizontal axis) doubles and the price of good Y (on the A) The budget constraint shifts outward and becomes flatter B) The budget constraint shifts outward and becomes steeper. C) The budget shift inward and becomes steeper. D) The budget constraint shifts inward and becomes flatter. 4) If both pepperoni and anchovies are “bads” (less is better), then the indifference curve A) have a positive slope. B) have a negative slope C) is vertical. D) is horizontal. 1
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5) You already have a ticket to see the Rolling Stones. The ticket cost $20, but scalpers without effort are legally selling the same ticket for $100. You must give up your income as a waiter on a Saturday night in order to see the concert. You would have made $50 at your job. You would quit your job if they paid one penny less. What is the cost of the Rolling Stones concert? A) $80 B) $100 C) $150 D) $130 6) The real price of a product is A) its nominal level on any given day B) its nominal level on any given day divided by the relevant income index. C) its nominal level on any given day minus any external costs of the production of the good. D) its price relative to the price of other goods and services. 7) Let demand be given by P = 100 - 2Q; let supply be given by P = 10+Q. Which statement is true? A) At price $50, the quantity traded is 25. B) At price $50 the quantity traded is 40. C) At price $20 the quantity traded is 40. D) The equilibrium price is $30. 8) A consumer chooses how much of two goods X & Y to purchase. Her preference is such that the value of additional units of X in terms of Y decreases as the consumer buys more X. This shows the consumer preference is A) Complete B) Transitive C) Strictly convex D) Reflexive 9) Tom is consuming 3 units of food and 5 units of shelter. We know at this point the consumer is willing to give up 0.5 unit of shelter for an additional unit of food. The price of food is $3 /lb and price of shelter is $8 /sq yard. Based on this information we can say:
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This note was uploaded on 02/14/2011 for the course ECON 302 taught by Professor Avrin-rad during the Spring '09 term at University of Illinois, Urbana Champaign.

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midA-302_SP10_TOOSSIS - Midterm Version A March 17 2010...

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