Comm 295 - 2010 mt

Comm 295 - 2010 mt - UBC Commerce/ FRE 295 MIDTERM EXAM...

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1 UBC Commerce/ FRE 295 MIDTERM EXAM October 27, 2010 NAME: _____________ _______________ (Last) (First) STUDENT NUMBER ________________ SECTION: _______________________ Instructions: This exam will be marked out of 100. You will have 1 hr. and 45 minutes to do the exam. There are two parts to this exam. The first part is multiple-choice questions. Answer all of these questions. Part II consists of longer questions. You must choose 4 out of 5 of the longer questions in Part II . This midterm has 17 pages. Check now to make sure you have all pages and make sure your name, section, and student number are provided above. This is a closed-book exam. You may not use books, notes, or electronic devices such as laptop computers or smartphones except that you may use a non-graphing, non- programmable calculator. GRADES True/False ________ / 40 Long Answers: 1. ________ / 15 (answer 4 out of 5) 2. ________ / 15 3. ________ / 15 4. ________ / 15 5. ________ / 15 TOTAL ________ / 100 Section 101 MWF 11.00 am Ratna Shrestha Section 102 T/Th 9.30 am Jim Vercammen Section 103 T/Th 3.30 pm Jim Brander
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2 PART I MULTIPLE CHOICE QUESTIONS Each question has one correct response. Please circle the letter in front of the correct response for each question. There are 20 questions. Each question is worth 2 pts. 1. Consider the following diagram illustrating supply and demand in the avocado market. Which of the following phenomena is consistent with this diagram? a) An increase in the income of consumers. b) An increase in the price of a substitute good. c) An increase in the price of a complementary good. d) A per unit tax on avocados paid by producers. 2. Data collected from Vancouver in 2010 shows that when the price of computers increased by 25%, the quantity of computers sold decreased by 10% and the quantity of software sold decreased by 50%. What is the cross-price elasticity of demand indicating the effect of an increase in the price of computers on demand for software? a) - 0.5. b) 2.5. c) - 2.0. d) 3.0. S 1 S 2 D 80 72 Q 2.0 2.2 $/lb
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3 3. Assume a market for gasoline as shown in the following diagram. If the government sets a price ceiling at P C (at a level lower than the free market equilibrium price P*), then a) all consumers gain. b) some consumers gain and some others lose. c) producers always lose. d) b) and c). 4. Excel was used to estimate a demand curve using data obtained from the Portland fish exchange. The output looks as follows. Quantity is measured in thousands of pounds per day and price is measured in dollars. Which of the following statements is true? a) The estimated (inverse) demand curve has a slope of -0.16 and a vertical intercept of 1.96. b) Approximately 90% of the observed variation in price is explained by the regression. c) Both a) and b) are correct. d) None of the above. D S Q $ Q* P* P C P = 1.96 Ͳ 0.16Q R² = 0.8986 0 0.5 1 1.5 2 02468 1 0 1 2 Price Quantity
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4 5. Consider a good whose own price elasticity of demand is zero and whose price elasticity of supply is unity (one). The fraction of a specific tax that will be passed through to consumers is: a) 0.00.
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This note was uploaded on 12/07/2011 for the course COMM 295 taught by Professor Ratna during the Winter '09 term at UBC.

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Comm 295 - 2010 mt - UBC Commerce/ FRE 295 MIDTERM EXAM...

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