73-100: Prof. Onur Kesten
Midterm 1 Solutions
ceteris paribus assumption
rational behavior assumption
normative & positive statements
2. People respond to incentives.
3. The willingness to pay of the marginal buyer.
4. The reason is psychological. S
SAMPLE QUESTIONS for MIDTERM 1
Midterm 1 covers Chapter 1 through 4. The following questions/problems are meant to
help you prepare for the exam. Some of the midterm problems/questions will be similar
to the following. Needless to say, you
SAMPLE QUESTIONS for MIDTERM 2
Midterm 2 covers Chapters 5 (Elasticity), Chapter 6 (Government Policies), Chapter 7
(Market Efficiency), and Chapter 8 (Costs of Taxation). You are only responsible for the
portions of these chapters that in
Introduction to Economics
Final Exam Question Review
Q: About the Law of Supply: Why does price increase as supply increases? Shouldn't it decrease,
since mass produced goods are cheaper than less-produced goods?
A: This question seems to confuse quantity
SAMPLE QUESTIONS for MIDTERM 3
Midterm 3 covers Auctions (last part of handouts on Market efficiency), Chapter 9
(International Trade), Externalities (Chapter 10), Public Goods and Common Resources
(Chapter 11), and Costs of Production (Ch
Midterm 2, S14 Solutions
Short Answer Questions
1. Australias minimum wage leads to unemployment/underemployment.
2. In free markets goods are bought by buyers who value them most highly and
goods are sold by sellers who produce at the least cost.
Midterm 3 covers Auctions (last part of handouts on Market efficiency), Chapter 9 (International Trade),
Externalities (Chapter 10), Public Goods and Common Resources (Chapter 11), and Costs of Production
1. Explain and illustrate the welfar
73-100, Kesten, S14, Sample Midterm 3, Solutions to Sample Questions/Problems
Fill in the blanks:
The phenomenon by which the winner of an auction pays more than everyone else and often
more than necessary is called _winners curse_.
Uncongested toll roa
SAMPLE QUESTIONS for MIDTERM 1: Solutions to Problems
1. The Moral:
Trade is like technological progress. Technological advancements enable a country to expand its PPF and
increase the standard of living. Similarly, a country that specialize
73-100, Spring 2014, Sample Midterm 2 Solutions
1.a. True. In the graph below, consumer surplus without the tax is equal to A+B+C, and producer surplus
without the tax is equal to D+E+F. To compute total surplus without a tax, we add consumer surplus and