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Midterm

Econ 1021 Midterm 2.pdf

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Department
Economics
Course
Economics 1021A/B
Professor
P Ferguson
Semester
Fall

Description
V111 NAME _________________________________ THE UNIVERSITY OF WESTERN ONTARIO LONDON CANADA E. Rivers ECONOMICS 1021B-001 March 18, 2012 MIDTERM #2 INSTRUCTIONS: 1. You will have 2 hours to complete the exam. 2. Check that your examination contains 50 questions. 3. Use a BLACK PENCIL to complete your Scantron Form. i. Print your NAME and complete your SIGNATURE ii. Enter your STUDENT NUMBER iii. Enter your SECTION NUMBER 001 iv. Ensure that the VERSION CODE on your question packet matches the version code on your Scantron Form. In order to get credit for a question, you must record the correct answer on your Scantron Form. No credit will be given for answers recorded in your question packet. 4. You may have pencils, erasers, your student card, and a non-graphing, non- programmable calculator at your desk. All other items must be left in your bag at the front of the examination room. 5. Please ensure that all electronic devices (cell phones, laptops, etc.) are turned off before storing them in your bag at the front of the examination room. 6. There are no washroom breaks allowed during the test. 7. WHEN YOU HAVE FINISHED, PLEASE HAND IN ALL EXAM MATERIALS (YOUR SCANTRON FORM, YOUR QUESTION PACKET, AND ALL SCRAP PAPER YOU HAVE BEEN PROVIDED). V111 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Use the figure below to answer the following question. Figure 1 1) Shelly's budget line is shown in Figure 1 Which point is unaffordable given her income and current prices? A) A and B B) B only C) C only D) C and D only E) All points are unattainable. 2) David has an income of $30 to buy movie tickets and bus tickets. The price of a movie ticket is $6 and the price of a bus ticket is $2. What is David's real income? A) $32 B) $38 C) $30 D) 5 movie tickets or 15 bus tickets E) 15 movie tickets or 5 bus tickets 3) David has an income of $30 to buy movie tickets and bus tickets. The price of a movie ticket is $6 and the price of a bus ticket is $2. What is the relative price of a bus ticket in terms of movie tickets? A) 1/3 movie tickets B) 15 movie tickets C) $6 D) $3 E) 2 movie tickets A-1 V111 4) The magnitude of the slope of the budget line is the A) relative price of the good measured on the horizontal axis. B) price of the good measured on the vertical axis. C) absolute price of the good measured on the horizontal axis. D) real price of the good measured on the vertical axis. E) relative price of the good measured on the vertical axis. 5) Suppose all prices double and income also doubles. Which statement is true? A) The budget line shifts rightward. B) The slope of the budget line increases. C) The budget line does not change. D) The slope of the budget line decreases. E) The budget line shifts leftward. 6) Larry consumes only beer ( ) and chips ( ). The equation of his budget line (with beer measured on the vertical axis) is A) QB = Y - C B/P )C . B) QB= Y/P B (PC B )Q B C) QB= Y/P B (PC B )Q C D) QC = Y/PC- (B CP )QB. E) QB= Y/P C (PB C )Q C 7) An indifference curve is A) a line that shows combinations of goods among which a consumer is indifferent. B) the boundary between normal goods and inferior goods. C) the boundary between what a consumer can afford and what he cannot afford. D) the boundary between what can be produced and what cannot be produced. E) a line with a positive slope. A-2 V111 Use the figure below to answer the following question. Figure 2 8) Which of the indifference curve graphs in Figure 2 shows perfect complements? A) (a) B) (b) C) (c) D) (d) E) (c) and (d) 9) A constant marginal rate of substitution between two goods implies A) one good is normal and one good is inferior. B) the goods are perfect complements. C) the goods are perfect substitutes. D) the goods are imperfect substitutes. E) the goods are both inferior. A-3
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