Midterm 2

# Midterm 2 - Econ326Spring2011 Midterm#2 April6,2011...

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Econ326 Spring 2011 Name: _________________________ Midterm #2 Student ID: _____________________ April 6, 2011     Section #: _______________________ Instructor: Ginger Jin The test is CLOSE - book. Please work independently with your cellular phone and computer completely shut down. We will provide  you a basic - function calculator, so please put away your own calculator if you have one. The test lasts 50 minutes. Please use the scantron for the multiple choice questions and the exam pages for the long questions. For the long questions, if you  write any answers out of the designated space or on the back of the page, please make a clear reference so we know where to find the  answers.  If a number involves decimal point, please keep it up to 3 digits after the decimal point.  Total points: 100  points Weights for questions:  15 multiple choices with 4 points each,  Long question 1: all parts required total 20 points Long quesiton 2: all parts required total 20 points   MULTIPLE CHOICE.  Choose the one alternative that best completes the statement or answers the question.  Scenario 5.4: Suppose an individual is considering an investment in which there are exactly three possible outcomes, whose probabilities and pay - offs are given below: Outcome Probability Pay - offs A .3 \$100 B  ? 50 C .2 ? The expected value of the investment is \$25. Although all the information is correct, information is missing.   1)

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Refer to  Scenario  5.4.  What  is the  probabilit y of  outcome  B?
1)  ______ _  A

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0
B)

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0.2
C)

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0.4
D)

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0.5
E)  - 0

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Refer to  Scenario  5.4.  What  is the pay - off of  outcome  C?
2)  ______ _  A

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25
B)

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0
C)

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- 150
D)

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150
E)  1 0

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Refer to  Scenario  5.4.  What  is the  standard  deviation  of the  investmen t?
3)  ______ _  A 1 6 .5 8

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90.14   D)
56.12   E)

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none of the  above     4)
function  that  indicates  the  maximum  output per  unit of  time that  a firm can  produce,  for every  combinati on of  inputs  with a  given  technolog y, is  called

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4)  ______ _  A
a production  possibility  curve.

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B)  an  isocost
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## This note was uploaded on 09/07/2011 for the course ECON 326 taught by Professor Hulten during the Spring '08 term at Maryland.

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Midterm 2 - Econ326Spring2011 Midterm#2 April6,2011...

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