Econ 101 prelim1 2007

# Econ 101 prelim1 2007 - Economics 101 Introductory...

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Economics 101 Introductory Microeconomics Prelim 1 READ THIS FIRST. NAME : fill in your name LAST NAME FIRST. IDENTIFICATION NUMBER spaces A to G: fill in your 7-digit CU identity number . This is the ID number on your student ID card. Please do not use any other ID number. Your exam may not be properly graded if you do. USE THE ANSWER SHEET PROVIDED. NO BOOKS, NOTES, PROGRAMMABLE CALCULATORS, PERSONAL DIGITAL ASSISTANTS, CELL PHONES, MUSIC PLAYERS, COMPUTERS, OR OTHER ELECTRONIC DEVICES ARE ALLOWED. ALL VIOLATIONS OF THIS RULE WILL RESULT IN IMMEDIATE CONFISCATION OF THE EXAM AND INITIATION OF A HEARING UNDER THE CORNELL CODE OF ACADEMIC INTEGRITY. ONLY A \$5.00 CALCULATOR THAT ADDS, SUBTRACTS, MULTIPLIES AND DIVIDES, AND A STRAIGHTEDGE (RULER) ARE PERMITTED. USE A NUMBER 2 PENCIL. THERE ARE 25 QUESTIONS . ALL QUESTIONS HAVE THE SAME WEIGHT (4 POINTS). NEITHER THE INSTRUCTOR NOR THE PROCTORS WILL ANSWER ANY QUESTIONS DURING THE EXAM. CHOOSE THE BEST POSSIBLE ANSWER FOR EACH QUESTION. THERE IS A 90 MINUTE TIME LIMIT. Glossary of abbreviations: MC: marginal cost MB: marginal benefit P: price Q: quantity S: supply D: demand PPF: production possibility frontier 1. The demand curve for pasta marinara at the Ivy Room in Willard Straight Hall is given by the formula: Q = 42 – 10P. Pasta is measured in 400g servings, and its price is in \$/serving. It is well known that at the market equilibrium, the price elasticity of demand for pasta marinara is -20 Find the quantity demanded of pasta marinara if the price is \$4.00. . A. 2 servings B. 8 servings C. 10 servings D. 3 servings E. Answer cannot be determined from given information. 2. In a double-auction market, like the ones we have been doing on Aplia, A. buyers make bids and sellers ask prices. B. buyers and sellers know each others’ costs and benefits. C. two auctioneers officiate. D. twice as many bids as asks are required. E. two separate auctions are held at the same time to sell the same goods. 3. Economists describe markets using the price elasticities of supply and demand rather than the slopes of the supply and demand curves because A. elasticity is easier to compute. B. the slope tells us about relative changes whereas the elasticity tells us about absolute changes. C. the elasticity, which does not depend upon the units of measurement, can be compared across markets whereas the slopes, which depend upon the units of measurement, cannot be directly compared. D. the slope is more useful for straight line demand and supply curves while the elasticity is more useful for demand and supply curves that are linear in the logarithms. E. it’s always more fun to study elasticity formulas.

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0 2 4 6 8 10 12 01234567891 0 1 1 1 2 Price Quantity Supply Demand A B 4. The graph above shows a market in equilibrium. The total producer surplus in the market is A. the area of triangle A.
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Econ 101 prelim1 2007 - Economics 101 Introductory...

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