ECO304K_Fall 2009_Midterm 2_Key

ECO304K_Fall 2009_Midterm 2_Key - ECO304K Fall 2009...

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ECO304K Fall 2009 Instructor: Urmee Khan MIDTERM II Total Points: 70 Time Allowed: 50 Minutes Name _______________________________________________________ 1. When calculating price elasticity of demand, if the numerator is positive the
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denominator is A. always greater than one. B. always greater than zero. C. sometimes positive and sometimes negative. D . always less than zero 2. If the price elasticity of demand for chicken is 2, a 20% decrease in the price of chicken will lead to a A. 10% decrease in the quantity demanded of chicken. B. 10% increase in the quantity demanded of chicken. C. 40% decrease in the quantity demanded of chicken. D. 40% increase in the quantity demanded of chicken
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3. Refer to the figure above. The slope of the demand curve (if you ignore the negative sign) is A. 2. B. 1.5. C. 1. D. 0.5. 4. Refer to the figure above. The price elasticity of demand at point A is A. 5/2. B. 5/8. C. 2/5. D. 8/5. 5. Home football games at your college are free for students and most of the students like to go to the game. What is the non-monetary cost for you to go to the game? A. Gas that you will need for your car. B. Money you paid for body painting and artificial hair. C. The outrageous price you had to pay for hot dog and soda. D. The 5 hours you waited in the line to get ticket. Sven likes to water ski, but can only water ski during the one week that he is on vacation. Therefore, he plans to ski every day, for eight hours a day. The first day, Sven skied for eight hours and enjoyed every hour. The second day, Sven slept in and then skied for seven hours, which was fun but not as much fun as the first day. The third day, Sven skied for six hours, but was starting to get a bit bored by the end. The fourth day, Sven skied for four hours and then took a nap. On the fifth day of Sven's vacation, Sven went blueberry picking all day. 6. Sven's total utility _______with each hour that he skied. A. increased B. decreased C. remained constant D. first increased than decreased 7. On the fifth day of Sven's vacation, he had decided that another hour of skiing would yield A. more utility than the day before B. the same level of utility as the day before C. less utility than blueberry picking D. no utility at all
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8. Sven gets ______ utility from his first hour of skiing than from his tenth hour of
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ECO304K_Fall 2009_Midterm 2_Key - ECO304K Fall 2009...

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