Econ_198_Aut_05_Exam__3 - Introduction to Microeconomics...

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Introduction to Microeconomics Allen R. Sanderson Economics 19800 Autumn 2005 THIRD HOUR EXAMINATION Name (Please Print): ________________________________________ [39 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 18 points total. 1. “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce . . . is hereby declared to be illegal.” This statement comes from: a. the inscription on the building of the Antitrust Division at the Justice Department. b. the founding principle of the Interstate Commerce Commission. c. the Clayton Antitrust Act. d. the Sherman Act. e. the FTC. 2. If someone’s marginal utility of wealth diminishes with added wealth, we would expect this person to: a. be pretty neutral (or indifferent) when it comes to avoiding risk. b. avoid brand-name restaurants and brand-name clothing. c. diversify his or her asset holdings. d. purchase automobiles without warranties. e. carry very little in the way of life, health or auto insurance. 3. Which of the following is not an option for regulating natural monopolies, assuming the government wants the firm to stay in business? a. price discrimination b. two-part pricing c. rate-of-return regulation d. price-cap regulation e. a marginal cost pricing rule 4. Economic rent is very similar to the concept of: a. producer surplus. b. a reservation wage. c. a public good. d. opportunity cost. e. the income effect. 5. Which of the following least fits the classification of a public good? a. air traffic control b. a tunnel (or bridge) c. public television d. a surveillance satellite e. a city’s police force 6. Private information creates which two problems? a. moral hazard and adverse selection b. externalities and public goods c. deadweight losses and excess profits d. risk and uncertainty e. transactions costs and rational ignorance 1
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7. The backward-bending supply of labor curve is mainly due to:
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This test prep was uploaded on 04/07/2008 for the course ECON 198 taught by Professor Sanderson during the Spring '08 term at UChicago.

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Econ_198_Aut_05_Exam__3 - Introduction to Microeconomics...

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