fall+2012+on+campus+midterm+1

8/11/2019 FALL+2012+ON+CAMPUS+Midterm+1

1/10

Professor: M. RushECO 2023Fall 2012MIDTERM 1

On-campus and in-state examRead all instructions on this page

This test is governed by UFs academic honesty code. It is intended to have 33

multiple choice questions. Please check to be sure your copy has all 33. Choose

the best answer for each question.

The next is important: Unless you are specifically told otherwise, on this test do

notassume that demand or supply is either perfectly elastic or perfectly inelastic.

On the bubble sheet, please enter:

1. Your name and initials

2. Your UF ID number

3. Form code: A

4. Sign your name on the bubble sheet.

Check that the form code and UF ID number you bubbled-in are correct now. Also check

to be sure your name is correctdo it now. I have heard a rumor that the ability to

correctly record these had been mastered by a few students at FSU as well as a couple of

accounting and journalism students. I will investigate these rumors but in the

meanwhile,

CHECK YOUR FORM CODE AND UF ID NUMBER. IF YOU GET EITHER OF

THESE WRONG, YOUR TEST MIGHT NOT BE GRADED AND IF IT IS GRADED,

YOU WILL LOSE 6 POINTS (which equals about 2 questions)!

TURN OFF ALL CELL PHONES AND OTHER

COMMUNICATION DEVICESYoumay notuse a cell phone, a Blackberry, or any other sort of device that allows for

communication as your calculator.

I have become increasingly concerned that some students are at a real disadvantage

because they are unwilling to ask questions during the exam while others ask a lot of

questions. Hence, to level the playing field, I have decided to eliminate allquestions

during the test. I dont like this policy, but it seems the fairest policy.

Do not ask questions of me or the TAs; in the interest of fairness I

have instructed them not to answer any questions during the exam.You will have one hour (60 minutes) to complete the exam andbubble in all your

answers. When the TAs say that time is up, you musthand in your exam. We will not

give extra time to finish bubbling in the answers, so be sure you are done when the 60


2/10

E C O 2 0 2 3 M I D T E R M 1 O N - C A M P U S A N D I N - S T A T E V E R S I O N F A L L 2 0 1 2

2

minutes are up. Of course, you may hand in your test at any time before the 60 minutes

are up.

An answer key will be posted on the class web page after all Study

Abroad students have taken it.

The test scores will be on class web page within a few days.Once you see the answer key, you might have a question about why one answer

is right and another is wrong. For these questions, email me at

[email protected] Do NOT email the grader about these questions!

After the scores are posted, if you think your posted score is incorrect, then email

the grader at [email protected] If you email me about your test

score, I will not forward the email nor respond to youyouMUSTemail the

grader. You have one week after the curved score is posted to request a grade

check. After a week, the score will not be changed. If the web reportswhat you

bubbled in for each question and you ask the grader to check an answer because

you believe you bubbled in something other than what is reported and the

reported answer on the web is correct, you will lose 1 additional question.


3/10


3

1) If the demand curve for a good is a downward sloping straight line, the demand forthe good will be more price elastic the higher is the

A) price of the good.

B) price of substitutes.

C) income of consumers.

D) income elasticity of demand for that good.

2) A hurricane sweeps through a city and destroys a substantial portion of availablehousing. The hurricane

A) increases the demand for housing and the demand curve shifts rightward.

B) decreases the demand for housing and the demand curve shifts leftward.

C) increases the supply of housing and the supply curve shifts rightward.

D) decreases the supply of housing and the supply curve shifts leftward.

E) Both answers A and D are correct.

3) Increasing opportunity cost occurs along a production possibilities frontier becauseA) resources are not equally productive in all activities.

B) increasing wants need to be satisfied.

C) in order to produce more of one good decreasing amounts of another good must besacrificed.

D) production takes time.

4) The above figure shows the market for pizza. Pizza and hamburgers are substitutesfor consumers. Which panel shows the effect of a rise in the price of a hamburger?

A) Figure A.

B) Figure B.

C) Figure C.

D) Figure D


4/10


5/10


5

9) Which of the following statements is FALSE?A) The fewer substitutes for a good, the smaller the elasticity of demand.

B) The larger the proportion of income is spent on an item, the larger the elasticity ofdemand.

C) The more narrowly a good is defined, the smaller the elasticity of demand.

D) The longer the time that has elapsed since a price change, the larger the elasticitydemand.

10) A rent ceiling creates a shortage. This result means thatA) there is an efficient allocation of housing.

B) the rent ceiling is set above the equilibrium rent.

C) there is an increase in the producer surplus in the housing market.

D) there is a decrease in the producer surplus in the housing market.

11) If the cross elasticity of demand between two goods is 0.56, then a fall in the priceof one good leads to a ____ shift in the ____ of the other good.

A) rightward; demand

B) rightward; supply

C) leftward; demandD) leftward; supply

12) As the quantity consumed of pizza increases,A) the marginal social benefit increases.

B) the marginal social benefit decreases.

C) the marginal social benefit increases or decreases depending whether or are not theeconomy is on the PPF.

D) the price of the pizza must rise.

13) The marginal benefit from the 10 millionth pizza consumed is the maximumamount a person is willing to pay for

A) all of the pizzas the person buys.

B) the 10 millionth pizza.

C) all of the pizzas the person consumes divided by the number of pizzas he or shepurchases.

D) one pizza divided by the number of pizzas purchased.

14) The price of a pizza falls. Which of the following is a possible cause?A) A decrease in the price of soda, a complement to pizza.

B) A discovery that pizza cause diabetes.

C) An increase in the income of the average household, with pizza being a normal good.

D) An increase in the wages paid workers who produce pizza.

15) The deadweight loss from a price ceiling is

A) a loss to the consumers but a gain to the producers.B) a loss to the producers but a gain to the consumers.

C) a gain to the consumers and the producers, but a loss to the rest of society.

D) None of the above are correct.


6/10


6

16) Which graph shows the impact of scientists developing a more powerful fertilizer?A) Figure A.

B) Figure B.

C) Figure C.

D) Figure D.

17) The figure above illustrates a linear demand curve. In the range from $4 to $2,A) the demand is price elastic.

B) the demand is unit elastic.

C) the demand is price inelastic.

D) more information is needed to determine if the demand is price elastic, unit elastic, orinelastic.


7/10


7

18) The price of new cars increases by 10 percent. If the price elasticity of demand fornew cars is 1.25, the quantity of new cars demanded will decrease by

A) 2.5 percent.

B) 8 percent.

C) 10 percent.

D) 12.5 percent.

E) None of the above are correct.

19) Peoples incomes increase and pizza is a normal good. As a result, the equilibriumprice of a pizza ____ and the equilibrium quantity ____.

A) rises; increases

B) rises; decreases

C) falls; increases

D) falls; decreases

20) When the price of a pizza is $11, the quantity demanded is 37 million. When theprice is $9, the quantity demanded is 43 million. Between these prices, the priceelasticity of demand is

A) 0.33.B) 3.00.

C) 1.33.

D) 0.75.

E) None of the above are correct.

21) If a freeze destroys oranges before they are harvested, the equilibrium price of anorange ____ and the equilibrium quantity ____.

A) rises; increases

B) rises; decreases

C) falls; increases

D) falls; decreases

22) Cupcakes and granola bars are substitutes in consumption. The price of a granolabar increases. As a result, the demand for

A) granola bars will increase, that is, the demand curve will shift rightward.

B) cupcakes will increase, that is, the demand curve will shift rightward.

C) granola bars will decrease, that is, the demand curve will shift leftward.

D) cupcakes will decrease, that is, the demand curve will shift leftward.

23) At the quantity of 1000 tacos the marginal social benefit is of a taco $.50 and themarginal social cost is $.60. To produce the efficient quantity of tacos,

A) more tacos should be produced.

B) fewer tacos should be produced

C) there should be no change in the amount of tacos produced.D) more information on production costs is needed to determine the efficient level of

tacos.


8/10


8

24) The elasticity of demand for Nike shoes is probablyA) smaller than the elasticity of demand for shoes overall.

B) the same size as the elasticity of demand for shoes overall.

C) larger than the elasticity of demand for shoes overall.

D) different from the elasticity of demand for shoes overall but without more informationit is not possible to tell if it is larger or smaller.

25) In the above figure, if there is no minimum wage, the equilibrium employment is____; if the government imposed a minimum wage of $8 per hour, employment is____.

A) 4,000 hours; 2,000 hours

B) 3,000 hours; 4,000 hours

C) 3,000 hours; 2,000 hours

D) 4,000 hours; 3,000 hours

E) None of the above answers are correct.

26) In the above figure, if there is no minimum wage, the equilibrium employment is____; if the government imposed a minimum wage of $4 per hour, employment is____.

A) 4,000 hours; 2,000 hours

B) 3,000 hours; 4,000 hours

C) 3,000 hours; 2,000 hours

D) 4,000 hours; 3,000 hours


27) Using a production possibilities frontier, economic growth is illustrated by aA) point inside the curve.

B) point on the curve.

C) movement from one point on the curve to another point on the curve.

D) rightward shift of the curve.


9/10


9

28) If the market price of a pizza increases and the demand curve for pizza does notshift, then the consumer surplus from pizza will ____.

A) increase

B) decrease

C) equal the producer surplus if the market produces the efficient quantity of pizza

D) remain the same.

29) Home delivered pizza is a normal good and peoples incomes rise. Simultaneouslythe price of the cheese used to produce pizza rises. As a result, the equilibrium priceof a pizza ____ and the equilibrium quantity ____.

A) rises; increases

B) rises; decreases

C) does not change; might increase, decrease, or not change

D) might rise, fall, or not change; increases

E) None of the above answers is correct.

30) Increasing opportunity costs suggests that

A) thePPF

is a straight line.B) all labor and capital are costlessly interchangeable.

C) various types of labor are perfect substitutes for one another.

D) various types of labor are not perfect substitutes for one another.

31) If the price of a soda increases by 2 percent and as a result the quantity of sodasdemanded decreases by 5 percent, the price elasticity of demand equals

A) 0.40.

B) 1.50.

C) 2.50.

D) 1.00.

E) 5.00.


10/10


10

32) In the above figure, if output is 10 units, then the total surplus isA) $10.

B) $30.

C) $70.

D) $40.


33) After the scores are posted, if you have a question about your test score, email thegrader at [email protected] and the director is so stupid that (HINT: BeSURE to answer this question because youll get credit for any answer.)

A) he tripped over a cordless phone,

B) he got fired from the M&Ms factory for throwing out all of the Ws.C) when he hears its chilly outside, he grabs a spoon.

D) when he watches the Three Stooges, he takes notes

fall+2012+on+campus+midterm+1

Documents