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Practice_exam1_A

# Practice_exam1_A - page 1 of 6 Economics 2 Fall 2011 your...

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page 1 of 6 Economics 2 your name ______________________________________ Fall 2011 your student id __________________________________ your TA’s name _________________________________ day and time of your discussion section _______________ PRACTICE EXAM 1A DIRECTIONS: No calculators, books, or notes of any kind are allowed. All papers and notebooks must remain closed and on the floor at all times throughout the exam, and students are not allowed to leave the examination room until finished. Answer all questions in the space provided with the exam. 100 points are possible on this exam. HINTS: Feel free to use either of the following formulas if you find them useful. Area of a triangle = (1/2) (base) (height) Area of a trapezoid = (1/2) (base1 + base2) (height) PART I: MULTIPLE CHOICE—circle the correct answer (4 points each, 64 points total) 1.) In general, a subsidy to the producers of a good results in a.) an increase in producer surplus and an increase in total economic surplus b.) a decrease in producer surplus and a decrease in total economic surplus c.) a decrease in producer surplus and an increase in total economic surplus d.) an increase in producer surplus and a decrease in total economic surplus 2.) The above diagram shows supply and demand in a competitive market. Which of the following quantities is associated with the largest value for total economic surplus? a.) Q A b.) Q B c.) Q C d.) it cannot be determined from the information given D S Q P Q A Q B Q C

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page 2 of 6 3.) As you move down and to the right along a linear demand curve, a.) demand becomes more elastic b.) demand becomes less elastic c.) elasticity is constant d.) it cannot be determined from the information given 4.) For a perfectly competitive firm, a.) price is greater than marginal revenue b.) price is equal to marginal revenue c.) price is less than marginal revenue d.) it cannot be determined from the information given 5.) Which of the following best explains why the demand curve facing a perfectly competitive firm is horizontal? a.) the demand curve for the industry as a whole is horizontal
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Practice_exam1_A - page 1 of 6 Economics 2 Fall 2011 your...

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