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Midterm

201-midterm-winter-2008-for_class.doc

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Department
Economics
Course
ECON 201
Professor
All Professors
Semester
Fall

Description
Concordia UniversityDepartment of EconomicsECON 201 Section 4JWinter 2008MIDTERM EXAMINATION AND ANSWERSName C LauthStudent IDFebruary 27 2007Mark 50 marks 2 bonus marksTime Limit 75 minutesPart I Multiple Choice Questions Circle the best answers 14 marks1When a choice is made we call the value of the best alternative choice theaImplicit choice bAccounting costcOpportunity costdApparent costeNone of the above2Which of the following statements is are normativeaIf income increases sales of luxury goods will fallbWhen minimum wages are raised unemployment risescAs the price of compact discs falls people will buy more of themdAll of the aboveeNone of the above3Which of the following product classifications is likely to have a demand curve with the highest price elasticity from Aplia aChevrolet ImpalabAutomobilescChevroletsdMotorized vehicleseCannot be determined4The supply of apples is determined by the size of orchards the number of apple trees and the quantity of apples per tree The quantity of apples per tree depends on the weather and the amount of fertilizer and pesticides that farmers use Given all these factors that affect supply is the longrun supply for apples likely to become more elastic or more inelastic than the shortrun supply from ApliaaThe longrun supply for apples will be more inelasticbThe longrun supply for apples will be more elasticcThe elasticity of supply will be the same in the short and long rundThese factors do not affect elasticityeThe elasticity of the longrun supply is dependent on the shape of the demand curve5Taxicab fares in Cleveland are subject to maximum price regulations set by the city government Suppose that the local taxi companies petition the city council to raise the fares to generate higher revenues A local citizen action group opposed to the fare increase claims that any increase in fares will actually lead to lower taxi revenues Based on these views aThe taxi companies believe the demand for taxi rides is price elastic while the citizen action group believes the demand is price inelasticbThe taxi companies believe the demand for taxi rides is price inelastic while the citizen action group believes the demand is price elasticcThe taxi companies believe the demand is unit elastic while the citizen action group believes the demand is perfectly inelasticdThe taxi companies believe the demand is perfectly elastic while the citizen action group believes the demand is unit elasticeNone of the above6The markets for inkjet printers and cartridges The printers are sold at 49 per unit whereas the cartridges are sold at 35 each The suppliers of the printerscartridges must think thataThe demand for printers is inelastic and the demand for cartridges is inelasticbThe demand for printers is inelastic and the demand for cartridges is elasticcThe demand for printers is elastic and the demand for cartridges is elasticdThe demand for printers is elastic and the demand for cartridges is inelastic Once people have bought the printer they have to buy the cartridgeseNone of the above
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