Study Guides (238,292)
Canada (115,058)
Economics (335)

Econ 1021A - Finals December 2007

24 Pages
Unlock Document

Western University
Economics 1021A/B
Michael Parkin

Version 222 THE UNIVERSITY OF WESTERN ONTARIO LONDON CANADA Michael Parkin ECONOMICS 020-002/004 December 9, 2007 MID-YEAR EXAMINATION INSTRUCTIONS: 1. The examination begins at 10:00 a.m. and ends at 12:00 p.m. 2. Check that your examination paper contains 23 pages. 3. Use aBLACK PENCIL to complete your ScantronForm. Check to ensure that the code on your Scantron sheet matches the code on the paper. Print your NAME and complete your SIGNATURE. Enter your STUDENTNUMBER. Enter your SECTION NUMBER, which is either 002 or 004. 4. Please hand in Scantron Form only. 5. You may use aregular calculator but you may not use aprogrammable or graphing calculator. 6. Your cell phone must be switched off and left in your bag at the front of the exam room. NOTE: QUESTIONS ARE PRINTED AT THE BACK OF EACH PAGE Economics 020 - 002/004 M id- Year Examination December 9, 2007 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question, * , t \ t 1) Which of the following is an example of a positive statement? C OAAM. -r--'41 f-' f A) Canada should cut back on its use of carbon-based fuels such as coal and oil. : B) Increasing the minimum wage results in more unemployment. ~"C) The Central Bank of Canada ought to cut the interest rate. D) Canada should decrease the rate of unemployment. E) Every Canadian should have equal access to health care. 2) If an economy produces two goods with increasing opportunity cost, then the production possibilities frontier ___ ^4). will be bowed out andhave anegative slope. B) will be positively sloped. p) reflects the fact that available resources are equally useful hi all production activities. D) will belinear andhave a negative slope. 1 uts-"^" ? ^ ' E)willbebowed outandhave apositive slope. 3) A technological advance is represented by T-t..\jtw'"j $ f^Q^U. Lpoint outside the production possibilities frontier. - -UlW' ' ^ i'" 1 1 Jltd'-*^-'^ '" :movement from a point inside the production possibilities frontier to a point on the production possibilities frontier. .KJ^C. rf^yini/i mfi { s^ui i/Hf^"j f C) a rightward shift of the production possibilities frontier. ~^ ^b-t-t ti) pQtU'Ut rtll/vt D) a point inside the production possibilities frontier. E) a movement along the production possibilities frontier. 4) If A and5 are complemenls.m_productipn and the price of A falls, the supply ofB will A) decrease, andtheprice ofB will increase. p''"**- ' i, ^'-iV'-l h ^' '-'"^''1 ^l f '. B^lncrease, andtheprice of 5 will decrease. p ''' "'v*" J^increase or decrease depending on how close A andB are as complements. ^T))^ * ,rease, and the price of B will decrease. . . I ,rj.J-". , ^B^lncrease, and the price of B will increase. B-l 5) Suppose we observe an increase in the price of oranges. Which one of the following is the most likely cause? ~~~ : A) atechnological advance inthe production oforanges - '-AWM " * -r --t^^A , .(!''\ C^good growing weather in Florida * V ~^~- an increase in the price of apples, if apples and oranges are substitutes " adecrease hi incomeif oranges are a normal good 6) Which one of the following will give a price elasticity of demand of 5.0? A 10percent increase in price results in a A) 5 percent decrease in quantity demanded. -j^ , 'B^ _ ^ r P ' -'.-. ' B) 0.5 percent decrease hi quantity demanded. \(, , C)'50 percent decrease hi quantity demanded. D) 10percentdecrease hi quantity demanded. E) 2 percent decrease in quantitydemanded. 7) At the currentprice, both Bill and Ted.haye an inelastic demand for coffee and each consumes 14 coffees a week. Bill's demand is/less elastic,than Ted's. Given this information, we know that all of the following arejrue^except ------ n\ v\^ ? - A) Bill'swillingnessto pay for the 13th coffee per week is greater than Ted's. vX \A> j A / > '>*',-. B) Bili is willuigto spend more on coffee than Ted. j/ 7 C) Bill's willingness to pay for the 14thcoffee per week is greater than Ted's./ D) Bill's consumer surplus from coffee is greater than Ted's.,/ '- ^ $u; " E) Bill's marginal rate of substitution between other goods and coffee diminishes more"rapidly ,-t i-pj| , .. 8) When demand is unit elastic, consumer surplus is infinity. C) the same at every price. E)-greater the lower is the price. B-2 9) Several retail store owners are talking over_coffee and donuts. Whichone of the following statements illustrates the case of perfectly{elastic.demandV A^'When the GST was introduced, I soldjust as many goods as before the tax." ,,A BJ "When the GST was introduced, I had to lower my prices by 1percent to avoid losing too 'v, many sales." / * ^C) "When the GST was introduced, I had to lower my prices by 5percent to avoid losing too many sales." \/ D)'"When the GST was introduced, I didn'talter my prices at allthe consumer paid the extra 7 percent." &^ j(E)i}"When the GST was introduced, I had to advertise that I would pay it, to avoid going out of ^ business." ' Use the figure below to answer thefollowing question. 1 ) Figure 1 10) Consider Figure 1.The deadweight loss from the sales tax is A) $200. B) $50. C)$150. (p) $100. E) $1,000. B-3
More Less

Related notes for Economics 1021A/B

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.