ECON 103 Study Guide - Midterm Guide: Economic Equilibrium, Sunk Costs, Economic Surplus
28 Oct 2012
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Instructions: you have 1 hour 30 minutes to complete the exam. Write all your an- swers in the space provided; any work outside the space provided will be given zero credit. You can write in either pen or pencil. If you write in pencil your exam cannot be regraded. The exam has 6 pages and 2 sections: 15 questions, each question is worth 1 point. Circle only one answer that you think is the best: john sells 1,000 cinnamon buns per day at price 2. 00 per bun. He knows that the absolute value of price elasticity of demand for his cinnamon buns is 0. 5. The opportunity cost of one cookies mu n is (a) 5/3 (b) 3/5 (c) 1 (d) 3/4 (e) 4/3. If p = 10 we will observe (a) surplus of 20 untis (b) shortage of 20 units (c) equilibrium in this market (d) shortage of 80 units (e) surplus of 80 units.
