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Unformatted text preview: Midterm 1 EC.102.B1 Version #01 1 * Mark on your scantron the letter of the choice that best completes the statement or answers the question. Please fill in your ID and NAME information on the scantron (be sure to write this information in the boxes AND fill in the bubbles. * Please fill in your ID, NAME, and your TA’s name information on the first page of this test. * Be sure to mark the VERSION of the exam listed in the upper right -hand portion of the first page. * Please write the Name of your TA and the day, time, and section number of your discussion on the top left -hand corner of your scantron. This cannot be bubbled in. * There are 30 questions on the exam and 1 bonus question. Each correct answer is worth 2/3 of a point. The maximum number of points is 20. * There are 8 pages on the exam, plus one page of scratch paper. * IMPORTANT: Please return the test when submitting your scantron. Student’s name ____________________________________ Student’s ID ______________________________________ TA’s name ________________________________________ ____ 1. You buy a movie ticket in a rush, but when the movie starts you realize you have already seen the movie and it was a very boring one. You have already paid $10 for the ticket which is non-refundable. Given that you are a rational person, what should you do? a. Stay until the end because spending $10 for two hours is better than spending $10 for a couple of minutes. b. Stay until the end and spend the entire time getting upset instead of doing something more enjoyable. c. Leave immediately and purchase the ticket for another movie, even if your willingness to pay is lower than its price. d. Stay until the end because you already paid for it. e. Leave immediately and do something more enjoyable. ____ 2. Janie must either mow the lawn or wash clothes, earning her $30 or $45 , respectively. She dislikes both equally and they both take the same amount of time and have no out-of-pocket costs . Janie should therefore choose to wash clothes because her _______ is ________. a. benefit ; lower b. economic surplus ; lower c. benefit ; higher d. opportunity cost ; higher e. opportunity cost ; lower ____ 3. During an expansion , it is generally the case that output _______ and unemployment _______. a. falls; rises b. falls; falls c. rises; rises d. rises; falls e. does not change, does not change Midterm 1 EC.102.B1 Version #01 2 ____ 4. The ‘substitution effect ’ in the market for DVDs means that, ceteris paribus , _______ . a. a decrease in the price of DVDs will make them more affordable (in absolute terms). b. an increase in the price of a substitute good (like CDs) will make the purchasers of DVDs feel a little poorer than they were before c....
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This note was uploaded on 04/07/2008 for the course EC EC102 taught by Professor Soffritti during the Spring '08 term at BU.
- Spring '08