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Midterm

CAS EC 101 Study Guide - Midterm Guide: Scantron Corporation, Economic Efficiency, Pareto EfficiencyExamPremium

5 pages85 viewsFall 2018

Department
Economics
Course Code
CAS EC 101
Professor
All
Study Guide
Midterm

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EC101 DD/EE Midterm 2 November 7, 2017 Version 02
Name (last, first): |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Student ID: |U|__|__|__|__|__|__|__|__| Discussion Section: |__|__|
Signature____________________________________
p. 1 v. 02
EC101 DD/EE F17 Midterm 2
INSTRUCTIONS (***Read Carefully***):
ON YOUR QUESTION BOOKLET:
Fill in your name, Student ID, Discussion Section Number (e.g. D5) and your signature.
ON YOUR SCANTRON:
Enter the Course Number (EC101 DD or EE) and date on the lines at the top-left. In the boxes below,
enter your Student ID, your DISCUSSION SECTION number (D1 - D9, E0 - E9), your NAME and
your EXAM VERSION. Be sure that you “bubble” all entries (fill in the small circles) . I will subtract
up to 5 points as punishment for errors in these data!
DURING THE EXAM:
Students who wish to leave the room for any reason must leave the Question Booklet and Scantron
sheet with the instructor or teaching fellow. Students in EC101DD MUST turn in both the Question
Booklet and the Scantron sheet at the end of the exam and exit from the front of the room. Students in
EC101EE should keep their Question Booklet and turn in only their Scantrons. All students must
show their BU Student IDs as they leave the exam room.
MULTIPLE-CHOICE QUESTIONS:
Choose the BEST answer for each of the multiple-choice questions. (Only ONE answer is allowed,
even when more than one of the answers are technically correct.) On the Question Booklet, CIRCLE
the letter that you chose, so that you have a record of your answers. Then BUBBLE it on the
Scantron.
NEVER CROSS OUT AN ANSWER ON YOUR SCANTRON. Use a PENCIL to bubble your
answers, and keep a good ERASER with you. If you bubble the wrong answer on the Scantron, erase
your mark COMPLETELY, and then bubble the correct answer.
YOU MAY NOT USE A CALCULATOR, CELL PHONE OR LAPTOP.
However, INTERNATIONAL STUDENTS may use electronic translators or dictionaries.
You have 60 minutes to complete the exam. Good luck!
Hint: the area of a triangle = base x height / 2
DO NOT OPEN THIS BOOKLET OR TURN IT OVER
[until told to do so]
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p. 2 v. 02
1. Taxes can be useful tools of government policy,
because
a. taxes can be used to increase equity even when
they reduce social surplus.
b. taxes can increase social surplus when there are
negative externalities.
c. taxes allow governments to supply public
goods and services like education and police
protection.
d. ALL of the above
Figure SSD. The graph below describes supply and
demand in a perfectly competitive market.
2. See Figure SSD. In equilibrium, total surplus is
a. 375.
b. 1000.
c. 250.
d. 750.
3. See Figure SSD. The equilibrium allocation of
resources is
a. efficient because consumer surplus is
maximized at the equilibrium.
b. inefficient because consumer surplus is larger
than producer surplus at the equilibrium.
c. efficient because total surplus is maximized
when 25 units are produced and sold.
d. inefficient because total surplus is maximized
when 50 units of output are produced and sold.
4. See Figure SSD. Suppose the government allows
only 10 units to be produced and sold. Then
a. the marginal value of the last unit exceeds its
marginal cost.
b. consumer surplus is maximized.
c. the marginal cost of the last unit is the same as
its marginal value.
d. total surplus is maximized.
Figure IFM. Suppose S represents the market supply
curve of domestic producers in the US. After imports
are allowed, foreign producers shift the market supply
to S’. The line D is US market demand.
5. See Figure IFM. After the foreign producers enter,
the surplus of US consumers
a. does not change.
b. decreases by $25.
c. increases by $25.
d. goes to zero.
6. See Figure IFM. After the foreign producers enter,
the producer surplus of domestic producers
a. increases by $15.
b. decreases by $15.
c. increases by $5.
d. decreases by $5.
7. See Figure IFM. The positions of the supply curves
S and S’ imply that some of the foreign firms ______
than any of the domestic firms.
a. have lower costs
b. are less competitive
c. pay higher wages
d. charge higher prices
8. Your roommate leaves trash in your dormitory room
without cleaning it up. The trash doesn’t bother her at
all, but you would be willing to pay $40 to live in a
clean room. Her opportunity cost of cleaning the trash
would be $50, but yours would be only $30. Which is
an economically efficient way of solving the trash
problem?
a. You clean up the trash yourself.
b. You leave a dead mouse in her bed as
punishment for her behavior.
c. You do nothing and live with the trash.
d. You offer to pay her $30 to clean up the trash.
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