Econ_198_Spr_07_Exam__3 - Introduction to Microeconomics...

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Introduction to Microeconomics Allen R. Sanderson Economics 19800 Spring 2007 THIRD HOUR EXAMINATION Name (Please Print): ______________________________________ [41 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 20 points total. 1. Which of the following situations provides the best example of the free-rider problem? a. Diana, a single mother, draws welfare and child-support payments from several sources and doesn’t seriously try to find employment. b. Juanita listens to National Public Radio all the time but has never made a contribution/donation. c. Tom and Nancy, wealthy corporate lawyers, send their children to public schools. d. A paper mill dumps part of its waste products into a nearby stream. e. Tom backpacks in the mountains and camps on government land and isn’t charged a fee. 2. When Charles Wheelan says that his “decision to buy and drive an SUV affects everyone else on the road, yet none of these people has a say in my decision,” this is basically one about: a. public goods. b. the shortsightedness effect. c. property rights and common property resources. d. Type II errors. e. externalities. 3. Which of the following most clearly illustrates the concept of derived demand? a. An increase in the price of steak causes the demand for poultry and fish to increase. b. An increase in the number of students in the College leads to an increase in the demand for rental units in Hyde Park. c. A boom in the housing market leads to an increase in the demand for lumber and electricians. d. An increase in consumers’ incomes leads to an increase in the demand for goods with positive income elasticities. e. An increase in beer advertising on TV leads to an increase in per-capita beer consumption. 4. The requirement that all employees must join the recognized union and pay dues within a specified length of time after their employment with the firm is called: a. a right-to-work agreement. b. a lockout. c. binding arbitration. d. the Sherman Act. e. a union-shop provision. 5. The usual justification for government provision of a public good is: a. on equity grounds – even poor people should have access to certain essential goods. b. economies of scale can be so large that a single firm would not have adequate resources to produce it efficiently by itself.
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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_07_Exam__3 - Introduction to Microeconomics...

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