110s09finalkey

110s09finalkey - Brigham Young University Department of...

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1 Brigham Young University Department of Economics Economics 110 – Principles of Economics Professor Kerk Phillips – Spring Term 2009, section 1 Final Exam key 6/17 – 6/18 Testing Center This test is multiple choice, fill in your answers on the answer sheet and do not write on this exam. It is closed book and closed notes. There is no time limit and you may use calculators; either those provided by the testing center or your own. Read all questions carefully before answering. There are 50 questions and 11 pages to this exam. 1. Suppose that at a price of $4.50, Cougar Burgers sells 11,000 cheeseburger per week. Then, when it rises to $5.50, 9000 cheeseburgers per week are sold. By the midpoint method, the price elasticity of demand for cheeseburgers is: a) -.25 b) -.50 c) -.80 d) -1.00 (-2000/10,000)/($1/$5) e) none of the above 2. For substitute goods, an increase in the price of good A, all else equal, will cause price in the market for good B to ___, and quantity exchanged to ___. a) rise, rise demand curve shifts out, supply curve is unchanged b) rise, fall c) fall, rise d) fall, fall e) it is impossible to tell with the given information 3. The inelastic portion of a straight-line (also called linear) demand curve is… a) the section above and to the left of the midpoint b) the midpoint only c) the section below and to the right of the midpoint d) the entire demand curve e) none of the above 4. Which of the following factors would tend to make the price elasticity of demand LESS elastic? a) The good is a luxury, not a necessity b) The good has many close substitutes c) The good is an income inferior one (irrelevant) d) The time horizon over which we are looking is relatively long e) none of the above
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2 5. If the elasticity of supply and the elasticity of demand are both equal and much larger than one, then the burden of a tax … a) falls more heavily on consumers than producers b) falls more heavily on producers than consumers c) falls equally on consumers and producers d) is almost zero e) none of the above 6. A non-binding price floor (i.e. one where the price floor is below the market-market clearing price) causes… a) a shortage of the good b) a surplus of the good c) an equilibrium allocation where supply equals demand (non-binding) d) sometimes a shortage and sometimes a surplus e) none of the above Use the following unit labor requirements for questions 7 – 9: J a p a n U S A Cars 500 1000 Airplanes 20,000 25,000 7. The relative cost of one airplane in the USA is… a) 50 cars per airplane b) 25 cars per airplane c) 15 cars per airplane d) 10 cars per airplane e) none of the above 8. _______ has the absolute advantage in producing cars, and _______ has the absolute advantage in producing airplanes. a)
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This note was uploaded on 02/28/2012 for the course ECON 100 taught by Professor Kerkl.phillips during the Winter '10 term at BYU.

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110s09finalkey - Brigham Young University Department of...

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