Econ_198_Spr_06_Exam__1

Econ_198_Spr_06_Exam__1 - Introduction to Microeconomics...

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Allen R. Sanderson Economics 19800 Spring 2006 FIRST HOUR EXAMINATION Name (Please Print): ______________________________________ [42 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 21 points total. 1. Reductions in consumer and producer surpluses that result from underproduction are called a(n): a. deadweight loss. b. social cost. c. externality. d. the paradox of value. e. increasing marginal cost. 2. All of the following occur with rent ceilings (controls) except : a. consumer surplus will decrease. b. producer surplus will decrease. c. deadweight losses will increase. d. there will be housing shortages. e. the poor and minorities are made better off because of cheaper housing. 3. “The ability of an individual, firm or country to produce more of a good or service, using the same amount of resources” would be referred to as: a. the gains from trade. b. economic efficiency. c. specialization and division of labor. d. absolute advantage. e. dynamic comparative advantage. 4. After graduation from the College, you accept a position with Ernest & Young consulting, at a starting salary of $65,000. You turned down competing offers from Wal-Mart (at $25,000) and the Bureau of Labor Statistics in the Federal government ($45,000). What was your opportunity cost of accept the E & Y job? a. $20,000; b. $25,000; c. $45,000; d. $65,000; e. $70,000 5. Tortilla chips are inferior goods; potato chips are a substitute for tortilla chips; and salsa is a complement with Tortilla chips. Which of these would increase the demand for tortilla chips? a. an increase in the price of potato chips b. an increase in income c. an increase in the price of salsa d. a decrease in the price of tortilla chips e. an increase in the supply of tortilla chips 6. Which of the following is not correct? a. The demand for Pepsi is more elastic than the demand for soft drinks in general. b. The smaller the portion of your income spent on a good, the less price elastic (that is, the more inelastic) is your demand for that good. c. If two goods are substitutes, their cross elasticity will be positive. d. The demand for food in poor countries is less elastic than the demand for food in more prosperous nations. e. The price elasticity of demand tends to increase as the amount of time elapsed increases. 1
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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_Spr_06_Exam__1 - Introduction to Microeconomics...

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