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Final

CAS EC 101 Study Guide - Final Guide: Scantron Corporation, Inferior Good, Demand CurveExamPremium

8 pages106 viewsFall 2018

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

This preview shows pages 1-2. to view the full 8 pages of the document.
EC101 DD Final Exam December 19, 2017 Version 07
Name (last, first): |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Student ID: |U|__|__|-|__|__|-|__|__|__|__| Discussion Section: |__|__|
Signature____________________________________
p. 1 v. 07
EC101 DD Final Exam F17
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 taking the exam on Saturday MUST turn in both
their Question Booklets and their Scantrons when they complete the exam. Students taking the exam
on Tuesday should keep their Question Booklets and turn in only their Scantrons. All students must
show their BU Student IDs when they turn in their Scantrons.
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 120 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. 07
Scenario BST. Suppose farmers begin to treat cows
with the hormone BST, which causes the cows to
produce a lot more milk. Moreover, many people
believe that milk from BST-treated cows improves
health and increase life expectancy.
[You may draw in the space below to help you
answer. The drawing will NOT be graded.]
1. See Scenario BST. The supply curve for milk will
a. shift right.
b. shift left.
c. rotate.
d. be unaffected.
2. See Scenario BST. The demand curve for milk will
a. shift left.
b. rotate.
c. shift right.
d. be unaffected.
3. See Scenario BST. The equilibrium quantity of milk
a. will decrease.
b. could increase or decrease.
c. will increase.
d. will not change.
4. International trade raises the economic well-being of a
nation in the sense that
a. governments choose to trade the products that
are most beneficial to the nation.
b. everyone in an economy gains from trade.
c. the value of the nation’s currency rises when it
begins to trade.
d. the gains of the winners exceed the losses of
the losers.
5. Economists use models, because
a. computers are able to process even unimportant
details.
b. exceptions to the model prove that people are
irrational.
c. every economic situation is essentially the
same, so specific details are unnecessary.
d. the omission of unimportant details makes
analysis easier.
6. In competitive economies, many workers are often
paid more than would be required to make them
willing to do their jobs, because
a. a fair wage maximizes profits.
b. firms cannot receive economic rents under
competition.
c. good workers receive economic rents when
firms compete with each other for labor.
d. firms will not pay economic rents to workers
under competition.
Table STX. The table below displays the willingness
to pay of each consumer for his first three oranges (no
one wants to eat more than three). Alex, Barb, and
Carlos are the only buyers of oranges.
1st Orange 2nd Orange 3rd Orange
Alex $2.00 $1.50 $0.75
Barb $1.50 $1.00 $0.80
Carlos $0.75 $0.25 $0
7. See Table STX. If the market price of an orange is
$1.20, consumer surplus amounts to
a. $1.40.
b. $1.10.
c. $0.70.
d. $5.00.
8. See Table STX. The market quantity of oranges
demanded is exactly 5 if the price of an orange P
satisfies
a. $1.00 < P < $1.50.
b. $0.80 < P < $1.50.
c. $0.75 < P < $0.80.
d. $0.80 < P < $1.00.
9. Which of the following does NOT affect a consumer's
demand curve for cashmere sweaters?
a. expectations about future clothing prices
b. manufacturing costs
c. current fashion
d. the consumer’s income
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p. 3 v. 07
Figure BMC. The marginal costs of lamps for a
factory in a perfectly competitive market.
10. See Figure BMC. If the price of lamps is $2, the
factory will obtain about $_____ of producer surplus.
[Choose the closest value.]
a. 4.25
b. 8.50
c. 10.00
d. 0.00
11. See Figure BMC. How many lamps will the factory
produce when the price of lamps is $5?
a. 8
b. 7
c. 0
d. MORE information needed
12. See Figure BMC. The variable cost of producing 5
lamps is about $_____. [Choose the closest value.]
a. 5.75
b. 10.00
c. 2.50
d. more than 50.00
13. Which of the following is normally not part of the
opportunity cost of attending Boston University?
a. lost income from not working
b. tuition
c. the cost of clothing
d. the additional cost of room and board at BU
14. The demand for gasoline is more elastic in the long
run than in the short run, because when prices rise,
a. high gasoline prices are unfair to the poor.
b. people who drive to work stop wasting
gasoline.
c. most drivers will continue to prefer big cars.
d. some people will eventually replace old cars
with more fuel-efficient ones.
Figure TXM. Suppose the government enacts an
excise tax in this perfectly-competitive market as
shown below.
15. See Figure TXM. Consumers effectively pay a larger
portion of the tax than producers do, because in the
relevant price range
a. the supply curve is inelastic.
b. supply is more elastic than demand.
c. the demand curve is elastic.
d. demand is more elastic than supply.
16. See Figure TXM. The loss of social surplus caused
by the tax is
a. 60.
b. 120.
c. 0.
d. 40.
17. See Figure TXM. The total reduction in consumer
surplus as a result of the tax is
a. 0.
b. 240.
c. 20.
d. 120.
18. The price elasticity of demand for widgets is –2. At a
price of $10, a store sells 200 widgets per month. The
store owner decides that she wants to sell 240 widgets
per month. What price should she set?
a. $9.00
b. $8.00
c. $4.20
d. $7.00
19. Policy makers should not focus entirely on
maximizing social surplus, because
a. surplus may be distributed unfairly.
b. there is often too much surplus.
c. maximizing surplus is inefficient.
d. surplus is not related to consumer value.
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