Exam 1 - Submittedbydeweerdt@msu.eduon10/3/20085:41:06PM...

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Exam 1 Submitted by deweerdt@msu.edu on 10/3/2008 5:41:06 PM  Points Awarded  39 Points Missed  8 Percentage  83% 1. In the space below, please indicate the address where you are taking this exam.  If it is a street  address, include apartment number, if any.  If it is a site on campus, indicate the building and  location within the building (e.g., ground floor of the main library, Room 415 East Akers, etc.) Answer  Points Earned: ?/0, This item will be graded later. Correct Answer: Your Response: 1345 EB 2. In the space below, indicate that you understand that you are permitted to use notes, books, or  other material from the EC 340 course web site while taking the exam.   However you are not  permitted to communicate with other individuals (either verbally or non-verbally, in  electronic form or directly) regarding the contents of this exam while you are taking the  exam. The minimum penalty for giving or receiving help with this exam is to receive a zero on the exam.   Answer  Points Earned: ?/0, This item will be graded later. Correct Answer: Your Response: I understand   3. Suppose that the price of milk is 2 U.S. dollars per gallon and the price of one dozen eggs is 4  dollars.  Then the price of milk in terms of eggs is A. 1/2 B. 1/2 dollar C. 2 D. 2 dollars By definition, the price of milk in terms of eggs is (Price of Milk)/(Price of Eggs), which equals $2/$4  = 1/2 in this example.  The units (dollars) cancel out. 
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Points Earned: 1/1 Correct Answer: A Your Response: A   4. Suppose that there are five countries (the United States, the United Kingdom, Japan, Mexico, and  Germany). The autarky prices (measured in each country’s currency) for each of two goods are  given in the following table:      United States (dollars) United Kingdom (pounds) Japan (yen) Mexico (pesos) Germany (euros) Food 6 5 120 15 3 Manufacture s 180 70 2,400 225 30   Which country has the lowest price of food in terms of manufactures? A. United States B. United Kingdom C. Japan D. Mexico E. Germany By definition, the price of food in terms of manufactures is PF/PM, where the currency unit drops out.   Add a row to the table to calculate this ratio:   United States (dollars) United Kingdom (pounds) Japan (yen) Mexico (pesos) Germany (euros) Food 6 5 120 15 3 Manufacture s 180 70 2,400 225 30 P F /P M 6/180 5/70 120/2,400 15/225 3/30 Arrange these ratios in order from low to high: 6/180 < 120/2,400<  15/225 < 5/70 < 3/30 Points Earned: 1/1 Correct Answer: A Your Response: A
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  5. Suppose that there are two countries (Mexico and Thailand) and two goods (Fruits and  Vegetables). Assume that all markets are perfectly competitive. The autarky price of Fruits is 50  pesos per pound in Mexico and 100 baht per pound in Thailand. The autarky price of Vegetables is 
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This note was uploaded on 02/25/2011 for the course ECON 340 taught by Professor Leidholm during the Spring '08 term at Michigan State University.

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Exam 1 - Submittedbydeweerdt@msu.eduon10/3/20085:41:06PM...

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