Midterm revision 2

Midterm revision 2 - Do not hand in ECON1001 Principles of Microeconomics Midterm#1 revision Due date No need to hand in ECON1001 Midterm#1

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Do not hand in. ECON1001 Midterm #1 revision - 1 - ECON1001: Principles of Microeconomics Midterm #1 revision Due date: No need to hand in. 1. The builder of a new movie theater complex is trying to decide how many screens she wants. Below are her estimates of the number of patrons the complex will attract each year, depending on the number of screens available: Number of Total number Screens of patrons 1 50,000 2 90,000 31 2 0 , 0 0 0 41 4 0 , 0 0 0 51 5 0 ,000 After paying the movie distributor and meeting all other non-interest expenses, the owner expects to net \$2.00 per ticket sold. Construction costs are \$1,000,000 per screen. How many screens should be built if the real interest rate is 7% A) 1 B) 2 C) 3 D) 4 E) 5 2. Mike gives a non-refundable \$100 to ACE adventure to reserve a raft for a group whitewater rafting trip in the New River. The raft has room for 5 people. In the past, Mike usually sells 4 tickets at \$25 each and he can go on the trip for free. However, this time, he is able to sell only 3 rafting tickets at \$25 each for a total of \$75. Should Mike cancel the trip? A) Yes, because he will lose his \$100. B) No, because he is making \$75 C) Yes if Mike values going on the trip at less than \$25.

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This note was uploaded on 04/18/2011 for the course ECON 1001 taught by Professor S.c during the Spring '10 term at HKU.

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Midterm revision 2 - Do not hand in ECON1001 Principles of Microeconomics Midterm#1 revision Due date No need to hand in ECON1001 Midterm#1

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