202 final exam (Winter 2010)

202 final exam - Name(TA's name NOT necessary NORTHWESTERN UNIVERSITY DEPARTMENT OF ECONOMICS WINTER 2010 ECONOMICS 202 INTRODUCTION TO

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                                                             Name: (TA’s name NOT necessary) NORTHWESTERN UNIVERSITY DEPARTMENT OF ECONOMICS WINTER 2010 ECONOMICS 202: INTRODUCTION TO MICROECONOMICS PROF. ZELDER Final Exam March 18, 2010 For section I of the exam (multiple choice), please circle the single correct answer. For section II of the exam (short answer), please explain your answers with a few sentences, including diagrams and/or equations where necessary or useful. Please use the front of the page, only writing on the back if you run out of room. I. Multiple Choice (4 points each; 40 points total): Circle the single correct answer to each question. (1) (4 points) Fredo is trying to decide whether to buy a laser printer or an inkjet printer. The laser printer costs $200 to purchase, while the inkjet printer costs $100. The only other difference between the two printers is in terms of the ink cartridges: Each laser cartridge costs $100 and produces 10,000 copies before it runs out of ink, while each inkjet cartridge costs $20 and produces 1,000 copies before it runs out of ink. There are no other differences between the two types of printers (such as print quality, or speed, or anything else), and unfinished ink cartridges have zero resale value. Which of the following statements is true? (a) It is irrational for Fredo to buy the inkjet printer. (b) It is rational for Fredo to buy the laser printer if he plans to make 12,000 copies. (c) It is rational for Fredo to buy the laser printer if he plans to make 16,000 copies. (d) It is irrational for Fredo to buy the laser printer if he plans to make 15,000 copies. (e) None of the above is true. (2) (4 points) Suppose that Mike spends all of his income I on two goods, x and y. After I decreases: (a) He might consume less x and more y. (b) He might consume more x and more y. (c) He must consume less x and less y. (d) He might consume less x and less y. (e) Both (a) and (d) are true. 1
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                                                             Name: (TA’s name NOT necessary) (3) (4 points) The good x, ramen noodles, is an inferior good for Willie. Willie spends all of his income on combinations of x and y (fudge). (a) His demand for ramen noodles is more elastic than his demand for fudge, ceteris paribus. (b) His demand curve for ramen noodles is upward-sloping only when the substitution effect is
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This note was uploaded on 10/05/2011 for the course ECON 202-1 taught by Professor Zelder during the Spring '11 term at Northwestern.

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202 final exam - Name(TA's name NOT necessary NORTHWESTERN UNIVERSITY DEPARTMENT OF ECONOMICS WINTER 2010 ECONOMICS 202 INTRODUCTION TO

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