Midterm Specific Review
• 90 Questions
○ 15 question/chapter
10-15 questions on elasticity
• Chapters 2-7
• Questions in this review are from 2011 Midterm - and are the main ones that show use of concepts
Tax amount (shifts every point up by that amount)
Tax amount imposed. In this case, $1.00.
13) When OC is less,thereis a comparativeadvantage.Always specializein the good that has comparativeadvantage.
OC is calculatedby: amount of good x given up to get good y. . To get OC of other good, take reciprocal.
OC for Vulcan: 4y for 2x, therefore for 1x they give up 2y.
OC for Romulus: good x = 1.5y, good y = 1/1.5x
Romulus has comparative advantage for good x because OC is less (1.5 is less than 2), and Vulcan has CA for good y because OC is less (1/2 is less than 2/3)
21) Equilibriumis when
Qd 200 Qs
Midterm Specific Review Page 1 CS