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Unformatted text preview: Econ 001 – Dr. Spiegel: Midterm 1 October 7th, 2010 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. !!! No calculators allowed! The Midterm has 2 parts. Part 1 consists of 5 multiple-choice questions. Please use the first page of a blue book to record your answers. Part 2 consists of 3 short answer questions. Please use a separate blue book for each. Part I: Multiple Choice Questions (5 points each/25 points total): 1. Suppose an economy produces two goods, pizzas and lemonade, using labor. Last year, it produced 50 pizzas and 30 lemonades. This year, it produces 60 pizzas and 40 lemonades. If we know that in both years the economy was on its production possibilities frontier, which of the following events could not explain the increase in output? a. A reduction in unemployment. b. An increase in available labor. c. An improvement in technology. d. Any of these events could explain the increase in output. 2. Due to the recent oil spill, many vacation resorts along the Gulf Coast have closed. What would we expect to happen to price of vacation resorts in other parts of the country? a. There will be no effect, because the Gulf Coast resorts are substitutes for other resorts and a change in supply of a substitute would not effect price....
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- Fall '11
- Supply And Demand, blue book, separate blue book