ECON205 - Midterm02 - S09

# ECON205 - Midterm02 - S09 - Name: Student ID: Economics 205...

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Name: Student ID: Economics 205 Econ 205- Midterm 2 March 25, 2009 Do not begin the exam until you are instructed to do so. You are permitted to only have a writing utensil, a non-programmable calculator, and scratch paper with you during the exam. Be sure you completely fill out your scantron, especially your Student ID number. The allotted time for the exam is 110minutes. Beaware that the time limit is strictly binding. Good luck! Exam: (100points)

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Name: Class: Date: _ 10: A Econ 205 - Midterm 1 I. A consumer's budget line shows a. the utility that an individual would receive from consuming various combinations of two (9 goods b. the combinations of two goods that an individual is able to purchase, given prices and income c. how income is influenced by prices of goods d. how changes in income affect utility the relationship between prices and income ~O 'LEA. .l~ A family on a trip budgets \$800 for restaurant meals and fast food. The price of a fast-food meal is \$20 and the family can afford 16 restaurant meals if they don't buy any fast food. How many fast-food meals would the family gain if they gave up~ne restaurant meal? a. I ~ b. 0.4 ~ 'SO yOLLt\.\lS c. 2 " 2.5 V e. 5 L 3. Suppose that Trey spends all of his income on vacation trips and textbooks. If the price of a trip is \$200 and the price of a textbook is \$50, then the slope of his budget line (assuming vacation trips are measured on the vertical axis) would be . ~ ~ a. -4 1'tlSy <gU,0 o 4 c. 0.25 <it. -1.75 V e. -0.25 __ 4. arginal utility is the extra utility a consumer derives from consuming an extra unit of a good. (ii) True I /' b. False V 5. If marginal utility from consuming an extra unit of a good is positive, then the consumer's total utility must increase as more of the good is consumed. True b. False Multiple Choice identify the choice that best completes the statement or answers the question. :&
Name: _ 10: A v ) Fil!ure 5-6 Quantity of Total Apples Utility 0 0 1 20 2 34 3 44 4 50 ~6. Figure 5-6 shows the total utility that Jerry would receive from consuming different numbers of apples per week. What is Jerry's marginal utility from consuming the second apple after he already consumed the first one? a. 0 b. 17 c. 20 14 J e. 34 '" 7. If Bill asks for a second helping of pancakes, then his a. second helping must be free b. marginal utility of the second helping must be negative ~ price per helping is too low d. marginal utility of the second helping must be positive ~ marginal utility of the second helping must be less than the marginal utility of the first , /' helping V 8. For dessert, Mac has the choice between cheesecake and apple pie. The cheesecake has a marginal utility of 50 and a price of \$5, and the apple pie has a marginal utility ono and a price of \$3. Therefore, Mac should buy a. the cheesecake since the marginal utility is greater b. the apple pie because its price is lower c. two servings of apple pie and no cheesecake d. four servings of cheesecake . /' f!' either the apple

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## This note was uploaded on 04/07/2011 for the course ECON 205 taught by Professor Williams,w during the Spring '08 term at Sonoma.

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ECON205 - Midterm02 - S09 - Name: Student ID: Economics 205...

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