old exam-2-4

old exam-2-4 - ECN 212 SLN 32379 Dr. Roberts Microeconomic...

Info iconThis preview shows pages 1–21. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 6
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 8
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 10
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 12
Background image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 14
Background image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 16
Background image of page 17

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 18
Background image of page 19

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 20
Background image of page 21
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ECN 212 SLN 32379 Dr. Roberts Microeconomic Principles Exam # 2 Spring 2007 10:40-11:55 TTh 11 Price (dollars) )> to O D m C Quantity 1. In the figure above, at an output level of H, average total cost is a) OEMH. b) E. c) OBNH. d) B. e) E-B. 2. In the figure above, at an output level of T, total fixed cost is A a) CFLK. b) OER]. c) IR. d) SR. e) BE. 3. When total product reaches a maximum, a) average product is less than zero. b) marginal product is equal to zero. c) average product is equal to zero. d) marginal product is less than zero. e) it is equal to average product. 4. If marginal product is 8 units and average product is 4 units, then we can say with certainty that a) average product will increase. b) marginal product will decrease by 2 units and average product will increase by 2 units. c) marginal product will increase. d) average product will increase by 4 units. e) None of the above are true. Page 1 of 7 Price ($) 200 Quantity MR In the figure above, the optimal short—run output level for this monopolist is a) 0. b) 200. c) 300. d) 350. e) Cannot be determined from the information given. In the figure above, at the profit-maximizing level of output, the firm earns a) an economic loss of $3,600. b) an economic loss of$1,200. c) an economic profit of $600. (1) an economic profit of $1,200. 6) an economic loss of $600. Agricultural subsidies a) ensure that we will not have surpluses or shortages. b) are costly to taxpayers but not to consumers. c) benefit both large corporate farms and small family farms. d) benefit consumers at the expense of farmers. 6) All of the above are true. Page 2 of7 8. Suppose that Cheapo Industries, a perfectly competitive firm, currently produces 500 units of imitation ham spread for a total cost of $1,500. The marginal cost of the 500th unit is $20, and the marginal revenue of the 500th unit is $15. To maximize profits, Cheapo Industries should a) shut down because it is losing money. b) produce more than 1500 units. c) produce more than 500 units but less than 1500 units. (1) produce less than 500 units. 6) continue to produce 500 units. 9. In the figure above, profit is a) $7. b) $8. c) $13. d) $75. e) $80. 10. In the figure above, at the profit-maximizing level of output total revenue will be a) $280. b) $120. c) $180. d) $130. e) $260. Page 3 of 7 Price Quantity 11. In the figure above, the perfectly competitive firm’s short—run supply curve is a) the MC curve. b) MC for output greater than or equal to S. c) A VC above point G. d) the entire MR curve. 6) AT C for all output beyond its minimum. 12. In the figure above, the perfectly competitive firm maximizes its profit at a) output R. b) output S. 0) output T. d) output U. e) Cannot be determined from the information given. 13. In the figure above, the firm’s total profit is equal to a) NJGL. b) N-M. c) LGUO. d) N—L. e) NJHM 14. In the figure above, average fixed cost at the profit—maximizing output is a) N-M. b) M-L. c) LMHG. d) L. e) K. Page 4 of 7 15. 16. 17. 18. When firms form a cartel, a) they are able to supply higher quality products. b) their goal is to lower the price. 0) they are able to increase profits by behaving as a monopolist. d) they actually become economically efficient by setting price equal to marginal cost. 6) they rely on goodwill to keep the cartel stable. As long as marginal product is greater than average product, a) marginal product is increasing. b) marginal product is at its peak. 0) average product is increasing. d) total product is increasing at an increasing rate. e) All these answers are true. Assume that at the current output level a monopolist has a marginal revenue of $4 and a marginal cost of $7. Which of the following is an accurate conclusion with regard to the monopolist’s profit? a) The firm could increase its profit by increasing its price. b) The firm could increase its profit by shutting down. 0) The firm is producing the profit-maximizing output. d) The firm could increase its profit by decreasing its output. e) The firm could increase its profit by increasing its output. Assume that one laborer produces 6 units of output, two laborers produce 14 units, three laborers 20 units, and four laborers 24 units. If the cost is $20 per laborer, and the fixed costs are $100, the total variable cost of 20 units of output is a) $60. b) $3. 0) $1. d) $25. e) Cannot be determined from the information given. Page 5 of7 19. 20. 21. 5 Q In the figure above, the firm(’s) a) supply curve is its marginal cost curve for all output beyond 5 units. b) faces a market price of $10. 0) begins experiencing diminishing returns at an output of 12. d) is operating under a monopolist market structure. e) None of the answers above is correct. In the figure above, the firm a) earns positive profits equal to $32. b) should shut down because it is losing $28. 0) has fixed costs equal to $56. d) maximizes profits by producing 16 units and selling at a price of $10. 6) None of the answers above are correct. If marginal product is declining as a firm increases output, then a) marginal cost is increasing. b) total cost is declining. c) average cost is declining. d) average product is decreasing. e) All of these. Page 6 of 7 Quantity Sold A Monopoly Firm Marginal Marginal Cost Revenue Price per Unit $17 $0 $0 $16 $16 $4 $15 $14 $6 $14 $12 $8 $13 $10 $10 $12 $8 $12 22. 23. 24. 25. Refer to the table above. A monopoly would maximize profit by selling a) 4 units. b) 5 units. 0) 3 units. d) 1 unit. e) 2 units. Refer to the table above. If this were a competitive industry rather than a monopolized industry, how many units would be sold? a) 3 b) 4 c) 1 d) 2 e) 5 Agricultural subsidies a) are costly to consumers but not to taxpayers. b) make sure that farmers use efficient production techniques. 0) lower the price of food for consumers while raising the price that farmers receive. (1) ensure that consumers can afford adequate amounts of food. 6) None of the above answers are true. Assume that marginal revenue equals rising marginal cost at 100 units of output. At this output level, a profit-maximizing firm’s total fixed cost is $600 and its total variable cost is $100. If the price of the product is $3 per unit and the firm produces at the profit-maximizing level, the firm will earn an economic profit equal to a) $600. b) —$400. 0) —$700 d) —$1,000. e) $200. Page 7 of7 ECN 212 SLN 74743 Dr. Roberts Microeconomic Principles Exam #3 - Spring 2007 9:15-10:30 TTh Quantity 1. In the figure above, if a regulatory commission followed an average — cost pricing policy, it would require a price of , and an output of 3) Péan b) P5, Q2 0) P4, Q3 d) P2, Q4 6) P1,Q2 2. In the figure above, if regulators require that a natural monopoly sets price equal to marginal cost, a) the price and output are efficient, and the firm has economic profits. b) the price and output are efficient, and the firm breaks even. c) the firm has economic losses. d) the firm will earn zero economic profits. e) None of these. 3. Which of the following statements best illustrates the relationship between the market for products and the market for resources? V a) An increase in the price of butter will cause more people to buy margarine. b) An increase in the price of cameras will decrease the demand for film. 0) An increase in demand for houses will increase the demand for carpenters. d) A decrease in demand for tea will increase the demand for coffee. e) As income rises, people demand relatively smaller amounts of food. Wage Rate 0 Qt 02 0:: Quantity of Labor 4. In the figure above, a shift from D1 to D2 might be caused by a) an increase in the wage rate paid elsewhere. b) an increase in the supply of labor. 0) a decrease in the wage rate. d) An decrease in the product price. e) None of the above would cause a shift from D1 to D2. 5. In the figure above, given S; and D2, a decrease in the price of the product this labor produces will cause a new equilibrium wage rate of and an employment level of 31) W4, Q2 b) W53Q1 C) W35Q1 d) W3gQ3 6) W2, Q2 Wage Rate per Hour (dollars) Quantity of Labor (hours) 6. Refer to the figure above. lfa minimum wage law of$5.15 is imposed, which of the following is correct? a) Qs people will be employed. b) A shortage will result equal to QT — Qd . c) A shortage will result equal to — Qe units. d) There will be a net gain for this labor market because those who keep their jobs gain more than those who lost theirjobs. e) None of the above is correct. 7. Refer to the figure above. If a price floor of $3.00 is imposed, a) less than Qe Workers will be hired. b) a surplus will result. c) a shortage will result. (1) Q6 workers will be hired. e) more than Qe workers will be hired. 8. If the marginal product of a worker is 10 and the marginal revenue product is $200, the marginal revenue must be a) $0.05. b) $5. c) $20. d) $2,000. e) $10. Units of Resource ‘ Total Product 0 0 1 50 2 105 3 140 4 165 9. Consider the table above. Assume that the resource and output markets are both perfectly competitive. The equilibrium price of the resource is $15 and the equilibrium price of the product is $0.50. How many units of the resource will be hired by a profit maximizing firm? a) 2 units b) Between 2 and 3 units 0) Between 3 and 4 units (1) More than 4 units 6) 1 unit. Number of Units of Resource Price Marginal Factor Marginal Revenue the Resource Cost of Product of . the Resource the Resource 0 $1 1 $2 $2 V $14 2 $3 $4 $12 3 $4 $6 $10 4 $5 $8 $8 5 $6 $10 $6 10. According to the table above, what wage rate will a monopsony pay to hire the optimal number of workers? a) $8 b) $4 c) $5 d) $3 I 6) $6 11. According to the table above, if this were a perfectly competitive input market rather than a monopsony, what wage rate would be paid for the optimal number Of workers? a) $3 b) $5 0) $6 d) $8 e) $10 (dollars per hour) N N o m _s 0101 Wage Rate 25 50 75 100 125 Quantity of Labor 12. In the figure above, what is the wage rate and quantity of labor hired if this were a competitive , imput market? a) $10,125 b) $12.50, 75 c) $15,50 ’ d) $15,100 e) $20, 75 13. In the figure above, what is the wage rate and quantity of labor hired by a monopsonist? Wage Rate ($ per day) 14. 15. 16. a) $12.50, 75 b) $15,50 c) $20,75 d) $15,100 e) $10,25. \l\ 30 Quantity of Labor 20 In the figure above, the initial labor supply is S] and the labbr demand is D] If the wage is $6, whichof the following is correct? 21) There is a shortage of 30 workers. b) 30 workers will be hired. c) 50 workers will be hired. d) 10 workers will be hired. e) None of the above is correct. In the figure above, assume that the market is in an initial equilibrium where the labor supply is SI and the labor demand is Dl Then labor supply shifts from Sl to S2 , but the wage remains at its previous level because of minimum wage laws. Which of the following is true? a) There is a surplus of 20 workers. _ b) 50 workers will be hired. c) 40 workers will be hired. d) There is a shortage of 20 workers. e) None of the above is true. The concept of comparable worth a) asserts that market—determined wages are the only appropriate way in which to allocate pay. b) is easy to implement once a new worker has been hired. c) Has almost eliminated wage differentials. d) is that pay ought to be determined by job Characteristics rather than by supply and demand. e) has made hiring practices much simpler for employers. 17. 18. 19. 20. In the figure above, which of the following is true? a) Distribution OYB is preferred to OZB,. b) Line OYB represents a less equal distribution of income than line OZB. 0) Line OXB represents the most equitable distribution of income. d) Line OXB is the line of perfect income equality. 6) Line OAB represents a society where wealth is shared equally among individuals. The Lorenz curve cannot be used to show a) a summary of distributions of income. b) the fairest distribution of income. 0) how society could move closer to the line of perfect equality with the introduction of a progressive income tax. d) how a given income is distributed among the population. e) The Lorenz curve can be used to show all of these. The factor most influencing the number of people in poverty and the incidence of poverty is a) whether the economy is dominated by another economy. b) having a progressive tax structure. 0) the size of the federal deficit. d) the general health of the economy. 6) the level ofthe minimum wage law. The “poverty line” refers to a) an absolute measure of poverty that is common for all countries. b) the threshold between earning minimum wage and earning above—minimum wage. c) an arbitrary income level designated by the federal government to measure a family’s ability to purchase necessities. ' d) the physical boundary separating the richer cities from the rural areas. 6) the number of people waiting in line for welfare payments. Annual Pretax Tax Policy Alpha Tax Policy Beta Tax Policy Tax Policy Delta Income Gamma $0 $0 $1,000 $1,000 $5,000 $6,000 $10,000 $15,000 21 22. 23. 24. 25. . Refer to the table above. The best example of a progressive tax is a) tax policy Beta. b) tax policy Delta. 0) tax policy Alpha. d) tax policy Gamma. e) Both Beta and Gamma are progressive. With a guaranteed income of $5,000 and a negative tax rate of 50 percent, how much disposable income will a family who earns $5,000 have? a) $10,000 ' b) $2,500 c) $5,000 (1) $7,500 e) $15,000. According to an article by George Will a) consumers are not the beneficiaries of licensing restrictions on interior designers. b) titling laws restrict the use of j ob descriptions which lead to entry restrictions into a profession. c) interior design regulations raise the price of licensed interior designers . d) the public does not need protection from deficient interior designers , c) All of the above answers are true. According to Walter Williams in an article titled “How Can It Be” ' a) the rich are getting richer and the poor are getting poorer. b) a family that falls below the poverty line in America, will most likely stay there. 0) the standard of living in America is declining. d) the poor in America are not poor by international or historical U.S. standards. 6) All of the above answers are true. In “A Bargain At 77 Cents To a Dollar” Lukas argues a) that women are systematically discriminated against at work. b) that the existence of the male-female wage gap proves that women receive unfair wages. c) that much of the male~female wage differential is due to the choices men and women make. (1) that government attempts to solve the wage differential problem will result in the elimination of discrimination. All of the above answers are true. 6) ECN 212 SLN 32379 Dr. Roberts Microeconomic Principles Final Exam Spring 2007 10:40—11:55 TTh Output per Hour Cookies 6 12 24 1. In the table above, the opportunity cost of a chili in Ohio is a) 1/4 unit of cookies. b) 1/8 unit of cookies. 0) the same as in Iowa. d) 4 units of cookies. 6) 8 units of cookies. 2. In the table above, if trade were to occur, what would be the least amount Ohio would be willing to accept for 1 cookie? a) 4 chilies b) 12 chilies c) 1/ 8 of a chili d) 1/ 4 of a chili e) 8 chilies Coal Paper Canada 6 tons 1 ton United States 4 tons 2 tons 3. In the table above, what is the most the United States is willing to pay for 1 ton of coal? a) 1/6 ton of paper b) 1/2 ton of paper c) 4/5 ton of paper (1) 6 tons of paper e) None of these 4. In the table above, what are the limits on the terms of trade for 1 ton of paper? a) One ton of paper is between 1/6 ton of coal and 1/2 ton of coal. b) One ton of paper is between 1/6 ton of coal and 6 tons of coal. 0) One ton of paper is between 1/2 ton of coal and 2 tons of coal. d) One ton of paper is between 1/2 ton of coal and 6 tons of coal. e) One ton of paper is between 2 tons of coal and 6 tons of coal. Demand and Supply of Cars Japan Morocco er Car Demanded Su lied Demanded Su n lied $10,000 100 O 50 0 $15,000 80 10 45 15 $20,000 50 20 40 25 $25,000 45 25 30 50 $30,000 35 5. Refer to the table above. The total international output of cars will have an equilibrium quantity of a) 15 cars. b) 75 cars. 0) 105 cars. d) 25 cars. e) 45 cars. 6. Refer to the table above. If the price of cars is $15,000 per car, each of the following is true except a) at this price, Japan demands more cars than does Morocco. b) Morocco will have a surplus of cars amounting to 80 cars. 0) Morocco will have a shortage of cars amounting to 30 cars. (1) the worldwide shortage of cars is 100 cars. e) Japan will have a shortage of cars amounting to 70 cars. Costs of Muck Removal Tons of Muck removed Total costs for Firm A Total costs for Firm B 0 $0 $0 1 $100 $100 2 $400 $200 3 $800 $300 4 $1,400 $400 5 $2,200 $500 6 $3,200 $600 7 $4,400 $700 8 $6,000 $800 9 $8,000 $900 J 10 $12,000 $1,200 / 7. In the table above, assume that each firm starts with 10 tons of muck emissions, for a total of 20 tons of muck. Suppose that the govemment uses command regulation to require each firm to reduce its emissions of muck by 5 tons. The total costs of such an action would be a) $500. b) $2,700. 0) $2,800. 01) $3,800 e) $13,200 8. 10. ll. 12. In the table above, assume that each firm starts with 10 tons of muck emissions, for a total of 20 tons of muck. Suppose that the government wishes to reduce emissions of. muck by 10 tons. It does so by implementing a marketable permit system where it sells 10 permits to emit a ton of muck each for $150 apiece. In such a situation, the result would be that a) each firm would purchase 5 permits to emit a ton of muck. b) firm A would purchase 1 permit and firm B would purchase 9 permits. c) firm A would purchase 8 permits and firm B would purchase 2 permits. (1) firm A would purchase 9 permits and firm B would purchase 1 permit. e) firm A would purchase 4 permits and firm B would purchase 6 permits. Public goods represent a market failure because a) a private market would provide too small a quantity of public goods compared to the socially efficient level. a private market would provide too great a quantity of public goods compared to the socially efficient level. the public is always willing to pay private firms to provide public goods. it is easy to exclude consumers once the good is provided. they are very expensive goods to produce. b) Which of the following is true? a) What people put into the system is what they get out. b) Social security ensures that only the elderly poor are cared for. c) The benefits and taxes of the system are determined by a scientific formula designed to ensure that the fund remains viable. d) The social security system was not meant to be a full retirement program but instead was to be just a portion of a person’s retirement funds. Today’s typical retiree collects in benefits only the amount paid in taxes while working. 6) Which of the following is fl0_t a means by which government corrects for externalities? a) Establishment of government regulatory agencies b) Subsidizing a negative externality c) Assignment of property rights (1) Setting production standards e) All of these are ways the government uses to correct for externalities. In "some Senior Moments" Rich Lowry asserts that a) the increased spending on drugs is due in large part to price gouging on the part of drug companies. b) on average, seniors spend more on dining out than they do on prescription drugs. c) drug innovations in America would benefit from price controls on pharmaceuticals. d) the majority of seniors cannot afford their medications. e) None of the above is true. Production Possibilities Schedule Country Y Country X 13. 14. 15. In the table above, if trade were to occur, which of the following is true? a) Country X should export coffee to country Y, but the two countries should not exchange sugar. b) Country X should export coffee to country Y, and country Y should export sugar to country X. Country X should export sugar and coffee to country Y. Country X should export sugar to country Y, and country Y should export coffee to country X. Country Y should export sugar and coffee to country X. C) d) e) In the table above, if trade were to occur, what is the least country Y is willing to accept for 1 unit of sugar? 3) 2/3 unit of coffee b) 200 units of coffee c) 1 unit of coffee (1) 1/2 unit of coffee e) 3/2 units of coffee In the table above, assume that before specialization and trade, both countries were producing at production possibility C. Now if each country specializes completely according to comparative advantage, what will be the gains from trade? a) 20 units of sugar and 10 units of coffee b) 20 units of coffee and 10 units of sugar 0) 80 units of coffee and 90 units of sugar d) 20 units of coffee e) 10 units of sugar Cars 16. 17. 18. Germany Korea 20 e 8 10 a A B 6 6 1O 4 10 Food Food In the figure above, which of the following is true? a) Germany has the comparative advantage in food. b) Korea has a lower opportunity cost for making cars. 0) Germany has the comparative advantage in cars. d) Germany has a lower opportunity cost for making food. e) Korea has the comparative advantage in cars. Suppose, in the figure above, points A and B represent pro—trade positions. If each country specializes completely according to comparative advantage, what are the potential gains to trade? > a) 4 foods b) 12 cars 0) 6 cars d) 6 foods e) 6 cars and 6 foods Which of the following provides the best description of the Social Security System in the US? a) Funds that were deposited in a trust fund and allowed to accumulate at market rates of interest for the use in future years only by the individuals who voluntarily deposited the funds. The Social Security System is designed to be a transfer payment which simply taxes the working population today and pays benefits for current retirees from the proceeds of that tax. Funds that were deposited in a trust fund and allowed to accumulate at market rates of interest for general use in future years. Funds that were deposited in a trust fund and allowed to accumulate interest-free for use in future years. A trust fund into which every American citizen has voluntarily paid a certain amount of money each year. b) C) d) 6) 19. Public radio raises its funding by staging telethons where no programs are aired for a period of time as the station asks for contributions. The stations have trouble raising money because a) the consumption of a good cannot be limited to the person who purchased it. b) the government assigns private property rights to goods. c) the broadcasts are private. d) a monopoly produces a good. e) people do not act in their own self-interest. 20. The market system works efficiently only if the market price a) reflects the full costs of producing a good but not consuming it. b) reflects only the direct costs created in a transaction. 0) reflects the full costs of consuming a good but not producing it. d) reflects only the extemalities of a transaction. e) reflects all costs of producing and consuming a good or service. 42;» Q: Q The market for elementary education 21. In the figure above, D represents the private demand for education and D + 5 represents the social benefits of education. According to the figure, the optimal subsidy is equal to a) P5. b) Pp. c) b - d. d) R — Pp. e) to reach the true equilibrium there should be a tax, not a subsidy. 22. In the figure above, D represents the private demand for education and D + 5 represents the social benefits of education. According to the figure, the outcome of an unregulated, unsubsidized market would be a) a welfare loss of bed. b) a welfare loss of abc. c) a suplus of QS-Qp. (1) over production. e) None of the above are true. 23. 24. 25. . l _ ~ 3 Clot/tke‘DPCa / l \ D doméfi L Q‘ Q 2 Cl/ 5 Liz :3” 9 Refer to the graph above. The domestic demand and supply curves are shown. How much would be imported if the world price were P3? 3) Q3 13) Q4-Q2 0) QS’QI d) Q4 6) Q5 Refer to the graph above. The domestic demand and supply curves are shown. Assume we have free trade and the free trade price is P2. If the government imposed a tariff of P3 - P2 which of the following would be true? a) Q5 - Q1 units would be imported. b) the loss in consumer surplus would be C,D,F,G,H, and I. c) domestic producers would gain E,F,G,H, and I. (1) foreign producers would gain G and H. e) None of the above are true. Refer to the graph above. The domestic demand and supply curves are shown. Assume we have free trade and the free trade price is P2. If the government imposed a quota of Q4 - Q2 3) the government would collect G and H in tax revenues, b) the economy would lose F and I. c) the economy would lose F,G,H, and I. d) the economic impact on the domestic economy would be the same as if they imposed a tariff of P3 — P2. the price would remain at P2 . 6) ...
View Full Document

This note was uploaded on 01/12/2012 for the course ECN 212 taught by Professor Nancy during the Fall '07 term at ASU.

Page1 / 21

old exam-2-4 - ECN 212 SLN 32379 Dr. Roberts Microeconomic...

This preview shows document pages 1 - 21. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online