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Unformatted text preview: Econ 001: Midterm 1 (Spiegel) October 13, 2009 Instructions: !!! This is a 60-minute examination. !!! Write all answers in the blue books provided. Show all work. Use diagrams where appropriate and label all diagrams carefully. !!! Write your name and your Recitation Instructor's name in every blue book that you use. !!! This exam is given under the rules of Penn's Honor system. !!! All blue books, blank or filled, must be handed in at the end of this exam. No blue books may be taken from the room. !!! The use of Programmable Calculators is in violation of Departmental rule. It is strictly forbidden! The Midterm has 2 parts. Part I consists of 4 multiple-choice questions. Please use the first page of a blue book to record your answers. Part II consists of 3 short answer questions. Please write on the front of each blue book which questions are answered inside. Part I: Multiple Choice Questions (4x4=16 points): 1. The table shows Hemos & Buis sandwich production capabilities per hour. Which statements are true? Cheese Steak Egg and Cheese Hemo 10 units 10 units Bui 8 units 4 units i. Hemo has a comparative advantage for Cheese Steak ii. Bui has a comparative advantage for Cheese Steak iii. Hemo has an absolute advantage for Cheese Steak iv. Bui has an absolute advantage for Cheese Steak a. i and iii b. i and iv c. ii and iii d. ii and iv 2. Sals Pizzeria raised their prices from $2 to $2.50 for a slice of pizza. His revenues did not change. This means that the elasticity of demand is: a. Elastic b. Inelastic c. Unit Elastic d. We do not have enough information to answer this question 3. Assume that the demand for labor is given by W(D)=140-2L(D) and the supply of labor is given by W(S)=20+L(S) where W is the daily wage and L is the number of workers. If the government sets a wage floor of W=80 then: I. 30 workers will be employed. II. 60 workers will be unemployed Choose the correct answer a. Statement I is correct b. Statement II is correct c. Both statements are correct d. None of the above 4. Two drivers Tom and Jerry each drive up to a gas station. Before looking at the price, each places an order. Tom says, Id like 10 gallons of gas. Jerry says, Id like $10 of gas. What is each drivers price elasticity of demand (absolute value)?like $10 of gas....
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This note was uploaded on 04/04/2012 for the course ECO 001 taught by Professor Urispiegel during the Fall '11 term at UPenn.
- Fall '11