Exam1_blue_key - Exam#1 Fall2012 Blueversion...

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1 Exam #1 Principles of Microeconomics – Econ1014 Fall 2012 Blue version Do not open this exam or begin writing until you are told to begin. When you are told to begin, first write your name, student ID and exam version on your scantron form and fill in the bubbles for your name and ID. Be sure to read directions carefully, use your exam copy to help you solve the problems and transfer all your answers to the scantron form. Only answers bubbled into the scantron form before time is called will be accepted. No work on the exam copy itself will be graded. You will not be given time to fill in any scantron answers after time is called, so make sure to do this before time is called. You are allowed to use only a pencil, eraser and ruler for the exam. Any other materials used or in sight are prohibited. In particular, you are NOT allowed the use of a calculator or any translation device. Failure to follow these directions is considered cheating and will result in a grade of zero for this exam. You must stop writing and put down your pen or pencil immediately when you are told it is time to stop the exam. Failure to follow these directions is considered cheating and will result in a grade of zero for this exam. There will be 40 questions worth 1 point each and 8 questions worth 2 points each out of a total of 56 points. Your score will then be weighted to give you a possible 200 points for the entire exam. Please choose the best answer possible in each case.
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2 1. (1 point) Because of scarcity: 1. People must make choices. 2. The United States has to choose between eliminating poverty and exploring space. 3. Society has limited resources and, therefore, cannot meet all its wants. 4. We don’t have enough resources to solve all our social problems. 5. All of the above. 2. (1 point) Drought this summer in the U.S. has reduced the supply of corn. Suppose this summer the American Medical Association announced that corn consumption can help dieters lose weight. Which of the following effects would we expect from these two events occurring together? 1. Corn will be scarcer than before. 2. The market equilibrium price of corn will increase. 3. The demand for corn will increase. 4. All of the above 5. None of the above 3. (1 point) Because we can be at only one place at a time we have to make choices between activities that we would like to participate in. For example, if we decide to spend the weekend on the ski slopes with friends we can’t spend the weekend working. This is an example of: 1. The income effect 2. Voting with dollars 3. The substitution effect 4. Limited resources 5. All of the Above 4. (1 point) Since pollution is something generally considered undesirable, as a society we should: 1. Try to completely eliminate pollution, whatever the cost.
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