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Unformatted text preview: Middle [Last 'l‘echnical University l‘auulty of Economic and AdministratiVC Sciences Department of Economics lacon llil lilge‘ Senses, Tune lq November 2008 PART A) Multiple Choice 20x2:40 POlNTS ————————————————— —-side of input (factor) markets and on the 1) Households are on the output (product) markets. side of ,,__ .17-,_,_,.-V-" A) demand; supply B) demand; demand C) supply; demand D) supply: supply cc of coffee decreases, 2) If buyer demand for newspapers increases when the pri then the two goods are A) complements B) substitutes C) normal goods D) inferior goods you practic ou never want to see ham r hamburgers to be a(n) 3) In your university years 15,000 YTL a month. Y conclude that you conside A) normal B) inferior C) complementary D) substitute 4) _ focuses on the rate of inflation and --------------------- -- focuses on the priCes of individual goods and services. A) Microeconomics; macroeconomics P») Mcicroeconomies; mieroeconomics ( ) :‘Mieroeconomics; inicroeconomics (.1) Macrocconomies: macroeconomics I. 3) Production inefficiency occurs when an economy produces A) on its production p issihility frontier l3) Lit the “right” i.:ombination of goods on its production possibility frontier. (’) either when an economy is producing inside its production possibility frontier or when the economy is producing the wrong combination of goods on its production possibility frontier l)) outside its production possibility frontier (i) Opportunity costs increase as Microland produces more ofa good. This most likely occurs because. A) as it produces more of the good the inputs it uses to produce that good will lflL‘fL’iISC in price B) consumers would willineg pay higher prices for the good as Microland produces more of the good (‘) resources are not equally well suited to producing all goods and as Microland produces more of a good it necessarily uses more resources less well suited to producing that good D) as Microland produces more ofa good the quality ofthe good declines and therefore the costs of production increase. 7) lfthe price ol‘computer chips used in manufacturing personal computers rises, there will be a(n) _ _ in the A of personal computers A) increase; quantity supplied B) decrease; quantity supplied C) increase; supply D) decrease; supply 13) Assume you earn 10,000 Y'l'l, a month and your favorite newspaper costs you 10 YTL a month. Your demand for this newspaper is likely to be A) elastic B) perfectly elastic ('7) unitary elastic D) inelastic 14) Which of the following statements concerning a black market is false? A) ()n a black market, goods will be sold above the maximum price set by the government B) A black market, although it is illegal. ensures a fair distribution of the good C) A black market often interferes with the objectives of the government D) A black market is a predictable outcome where price ceilings are imposed e winter that hit Kenya last year destroyed approximately a quarter of l5) 'l he sever pgbread _ A and the the wheat crop. Ceteris paribus, the ‘_ g“ > my ‘_ _ A___ price of breadL~_ A) supply of; decreased; increased B) supply of; decreased; decreased C) demand for; increased; increased D) demand for; decreased; decreased lo) When a government sets a price lloor above a market‘s equilibrium price (the market is at equilibrium at the beginning), consumer surplus will A) rise B) fall C) not change D) not enough information available to determine an answer l7)‘l‘liere will he a dcadweight loss in a market if equilibrium quantity A) the actual quantity traded equals the market arkct equilibrium quantity B) the actual quantity traded is other than the m C) producer surplus exceeds consumer surplus D) consumer surplus exceeds producer surplus l3) Assume you earn 10,000 Y“. a month and your favorite newspaper costs you l0 Y'l‘l, a month. Your demand for this newspaper is likely to be A) elastic B) perfectly elastic C) unitary elastic D) inelastic 14) Which of the following statements coneeming a black market is false? A) On a black market, goods will be sold above the maximum price set by the government B) A black market, although it is illegal. ensures a fair distribution ol‘ the good C) A black market often interferes with the objectives of the government D) A black market is a predictable outcome where price ceilings are imposed ately a quarter ol‘ l5)'lhe severe winter that hit Konya last year destroyed approxim and the the wheat crop. Celeris paribus‘ the _ Via .rrfid ____V_bread 7* _W_ price ol'bread _‘ _7 A) supply of; decreased; increased 8) supply of; decreased; decreased C) demand for; increased; increased D) demand for; decreased; decreased 16) When a government sets a price tloor above a market‘s equilibrium price (the market is at equilibrium at the beginning), consumer surplus will A) rise B) tall C) not change D) not enough information available to determine an answer l7)‘l‘here will be a deadweight loss in a market it' A) the actual quantity traded equals the market equilibrium quantity B) the actual quantity traded is other than the market equilibrium quantity C) producer surplus exceeds consumer surplus 1)) consumer surplus exceeds producer surplus )8) When the price of fish increases by 10%, quantity demanded decreases 5%. The price elasticity ofdemand for fresh fish A") perfectly inelastic B) elastic f“) unitary elastic )7) inelastic 19) You would be willing to pay a maximum of 75YTL to attend a concert, and you can buy a ticket for 45 YTL. Your consumer surplus is A) l0 YTL B) ZOYTL Cl 30 YTL D) SOYTL 2U) lnelasticity of supply for agricultural goods causes; A) Relatively large price changes when demand changes B) Relatively large price changes when supply changes C) Relatively large output changes when demand changes D) Relatively small changes in farmers’ revenues when supply changes PART B 1) (5) Fill in the blanks in the following Table. what happens to total revenue. For elasticity in demand and/or the elasticity coefficient. For total revenue column-indicate dicate the elasticity characteristics of lusticity of Demand Price Total Revenue If,” (Own) Price E Zero ‘? Iilastic/in_elasti_c"”__ Elastic/inelastic? Elastic ets below. Indicate how equilibrium price se/remain the same/cannot e events affecting these n three different mark be affected (increase/decrea tion given) as a result of th 2) (0) You are give and equilibrium quantity may be determined with the informa markets " M'Er'k Tea H l aptt l | c ..t .._ ,,. .. .-_T e1 5 ""‘l l tpfs ol' laptops to rise i l , . l workers working, in 1 £' ‘ (,imngex C) 3) (2 l ) The supply a1 market are as z'x Fa) ,,l (2) : repons Say lf.\«'ent(..~:) The price ol‘eol‘l'ce tells and medical i E931. d iii-ilk @818 bad ELEM; Average income rises. people expect price :1 the future, wages ol~ ___‘_ ~_____w Hmaptop indusfl fall Oranges in this market are considered an ‘ inferior good: incomes rise, freezing 1 weather conditions cause severe transportation difficulties for oranges to reach this market for each ease uml explain briefly. id demand schedules for a pa given, below. rticular type of shirts in a certain 6 l’ric-ewfl 'l‘L/kgTrQuantity Demanded (kg) Quantity Supplied (kg) l»? V1100 a.) ( l) Equilibrium price is ------------------ ——.; Equilibrium quantity is h) (2) When price is 20, explain briefly how the market reaches equilibrium. c) (1) Write down the demand. equation. d) (1) Write down the supply equation. 6) ( 1) Using the equations you found in c) and d) above, equilibrium price is __. Equilibrium quantity is 20 YTL to 30 Y'l‘L en price goes up from ('11- point approach). lilusticity ol‘ demand wh slim you use the m 1’) e2) 7 1m. (Alake sm‘v l , sons why the elasticity teristics of this lasticity of demand. ‘ Identify the possible tea on say about the charac rmine 8 your results; in l‘; uhove ich a value? What can y pl, (4') liitet‘pi‘ct s of the factors that (1th: coelliuicm has Sl tommtxliti, .7 lliiit: 'l‘hink in term $1} (2) Point elasticity ol‘supply at equilibrium VH'A‘ ___J__. the quantity that will be or) price at 20 YTL, The level of excess ’4 minimum (Ho 3 will he'mfi M Mg”; i) (2) lt‘the g,ot»ernnu:nt sets exchanged between buyers and seller . will he ##0## tlcniandiexcess Supply w __~ W____ Ermation you found in h) above, the amount of black market profits if s of black marketers is i) (5) Using the ink all ofthc commodity falls into the hand llowing demand and supply functions for a commodity: Assume that the market is in equilibrium and government per ton to be collected from the suppliers. 4) i’ i 5) You are given the to 0dr: 60—2P 05: 5504 7P. imposes a sales tax of 18 Y'l‘L d demand curves and show the new situation after the tax a) {2‘ Draw the initial supply an d new equilibrium price and equilibrium quantity / tilt the same diagram. Show the old an in the same diagram. b) (2) After tax, sellers receive ————————————————————— --YTL. e) ('2) After tax, buyers pay_77_ W 7#V_ YTL d) (2) The burden of the tax is as follows: Buyers pay -------------- —-YTL. YTL. Hint: How is the burden of 18 YTL sales tax is Sellers payfi_wm ”_ shared between buyers and sellers? ir result in (1) above. Him: What are the factors that e) (3) Explain and interpret yor . ~ e burden of tax between buyers and sellers in this case? determine the distribution of th 9 mun ( \ V l‘i-, '~,‘.‘-'~i. iii 0 ‘.'\’ f :3) tonsumcr surplus ai " \iipplu\inlat€) H: ‘tcr id) appriixmmtc) result on this diagram urpluts uiicr in); mi lhc n ‘I i'l‘miuuui' 5 Suit on (he \imgrum. farmers SCH at a given war 15) "\N'i‘scn domcstic r incomes fiuciuate in the sam n volume of sales, lhei fluchiatimis in Oiilpui” xpluin ihc above sta 10(9) Briefly c b) ((1) Explain what can be done to stabil circumstances. . rm the new equilibrium) is cw cquiiibrium) is id price that is unaffc 1cmcm. Draw izc farmers’ ______________________ —- .Show ———————————————————————— —-. Show ctcd by their c direction as their Short-term diagram. income under these 10 ...
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This note was uploaded on 01/05/2012 for the course ECON 101 taught by Professor Gulipektunc during the Spring '11 term at Middle East Technical University.

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old_1midterm - Middle[Last'l‘echnical University...

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