MT1220A_Solution 09s

MT1220A_Solution 09s - Name: Id #: Midterm I Basic...

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Name: Id #: Midterm I Basic Economics I UC Irvine Wilima Wadhwa Economics 20A Spring 2009 This exam consists of five questions. Answer all questions and explain all your answers. Read the entire exam carefully before you begin. Good Luck! 1. (5 points) State whether True, False or Uncertain along with a short explanation. If income increases demand always increases. Answer: False/Uncertain. Fir normal goods, as income goes up, quantity demanded increases. However, for inferior goods, the opposite is true -- as income increases demand falls. 2. (5 points) Market research has revealed the following information about a market: P Q and P Q S D 350 700 150 800 + = - = Calculate the equilibrium price and quantity in this market. Answer: P*= $0.2 Q*= 770 They get no points if they just give the answer --- they have to show the steps: Equilibrium: S D Q Q = , etc 1 point for stating equilibrium condition and 2 pts each for price and quantity
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Name: Id #: 3. (10 points) Beachfront resorts have an inelastic supply, and cars have an elastic supply.
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This note was uploaded on 03/11/2012 for the course ECON 20A 45206 taught by Professor Chen during the Spring '12 term at UC Irvine.

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MT1220A_Solution 09s - Name: Id #: Midterm I Basic...

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