Get 1 week of unlimited access
Study Guides (299,537)
US (149,860)
BU (5,118)
CAS EC (392)
All (137)
Final

CAS EC 101 Study Guide - Final Guide: Scantron Corporation, Shortage, Price FloorExamPremium

8 pages75 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/EE Practice Final December 16/19, 2017 Version 09
Name (last, first): |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Student ID: |U|__|__|-|__|__|-|__|__|__|__| Discussion Section: |__|__|
Signature____________________________________
p. 1 v. 09
EC101 DD/EE Practice Final 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]
You're Reading a Preview

Unlock to view full version

Subscribers Only

Only half of the first page are available for preview. Some parts have been intentionally blurred.

Subscribers Only
p. 2 v. 09
Figure SSD. The graph below describes supply and
demand for a perfectly competitive market.
1. See Figure SSD. In equilibrium, consumer surplus is
a. $108.
b. $36.
c. $144.
d. $72.
2. See Figure SSD. The equilibrium allocation of
resources is
a. efficient because total surplus is maximized
when 12 units are produced and sold.
b. inefficient because total surplus is maximized
when 20 units of output are produced and sold.
c. inefficient because consumer surplus is larger
than producer surplus at the equilibrium.
d. efficient because consumer surplus is
maximized at the equilibrium.
3. See Figure SSD. If 10 units of the good are produced
and sold, then
a. the marginal cost of the last unit is the same as
its marginal value to consumers.
b. total surplus is minimized.
c. producer surplus is maximized.
d. the marginal value of the last unit to consumers
exceeds its marginal cost.
4. A tax placed on a good
a. causes the equilibrium quantity of the good to
increase.
b. affects the welfare of buyers of the good but
not the welfare of sellers.
c. causes an increase in the effective price paid by
buyers.
d. creates a burden that is borne entirely by
consumers.
5. In a complex economy, selling and buying is a more
effective procedure for exchange than barter is,
because
a. tax laws do not apply to barter transactions.
b. selling and buying requires the use of money.
c. selling and buying makes it easier to find
trading partners.
d. selling and buying fosters a commercial
environment.
6. An shift to the right of the supply of lettuce could be
caused by
a. an advertisement showing a photo of Hillary
Clinton eating lettuce.
b. good weather in lettuce growing areas.
c. a decrease in the price of lettuce.
d. a report that lettuce prevents heart disease.
7. Compared to a person who earns $15 per hour, a
person who earns $30 per hour has
a. the same opportunity cost of spending time on
leisure activities.
b. a lower opportunity cost of driving farther to
work.
c. a lower opportunity cost of working longer
hours.
d. a higher opportunity cost of taking a day off.
8. A consumer is willing to pay $12 for his first beer, $8
for his second beer, $5 for his third beer, $3 for his
fourth beer, and $1 for his fifth beer. If the price is
$2, how much consumer surplus can he obtain?
a. $18
b. $22
c. $20
d. $16
9. In competitive economies, workers are often paid
much more than would be required to make them
willing to do their jobs, mainly because
a. most firms are rent-seeking.
b. firms will not pay economic rents to workers
under competition.
c. good workers receive economic rents when
firms compete with each other for labor.
d. firms cannot receive economic rents under
competition.
10. If a consumer places a value of $15 on a particular
good and if the price of the good is $17, then
a. there is going to be downward pressure on the
price of the good.
b. the market is not a competitive market.
c. the consumer has consumer surplus of $2 if he
or she buys the good.
d. the consumer does not purchase the good.
You're Reading a Preview

Unlock to view full version

Subscribers Only

Only half of the first page are available for preview. Some parts have been intentionally blurred.

Subscribers Only
p. 3 v. 09
11. If the labor supply curve is extremely inelastic, a tax
on labor
a. has a large deadweight loss.
b. raises a small amount of tax revenue.
c. results in a large tax burden on the firms that
hire labor.
d. has little impact on the amount of work that
workers are willing to do.
Scenario MMON. A small town has two bars in
which residents can drink beer. Each bar owner must
decide whether to set a high price or a low price for
beer without knowing what the other bar owner has
done. The payoff table, showing profit per week, is
provided below. The profit in each cell is shown as
(Bar 1, Bar 2).
Bar 2
Low Price High Price
Bar 1 Low Price (0, 400) (300, 300)
High Price (100, 100) (400, 0)
12. See Scenario MMON. What is Bar 1's dominant
strategy?
a. setting a low price
b. choosing a high or low price at random
c. setting a high price
d. NONE of the above
13. See Scenario MMON. What is the Nash equilibrium
of this price-setting game?
a. Bar 1: Low price
Bar 2: Low price
b. Bar 1: High price
Bar 2: Low price
c. Bar 1: High price
Bar 2: High price
d. Bar 1: Low price
Bar 2: High price
14. See Scenario MMON. This game is most similar to
a. the Prisoners’ Dilemma
b. Matching Pennies
c. the Battle of the Sexes
d. Offense vs. Defense
15. If a social planner were running a nondisciminating
monopoly, the planner could achieve an efficient
outcome by charging a price at the
a. intersection of the marginal cost curve and the
demand curve.
b. intersection of the average total cost curve and
the demand curve.
c. minimum point on the average total cost curve.
d. intersection of the marginal cost curve and the
marginal revenue curve.
16. Which of the following is the best example of
rent-seeking?
a. A secretary takes finance courses in order to
qualify for a job as a financial adviser.
b. An engineer volunteers for difficult jobs in
order to convince his boss to raise his salary.
c. The owner of a bar offers a large selection of
draft beers in order to attract more customers.
d. A student asks a professor to raise his grade in
economics because he is in danger of losing his
financial-aid package.
17. Suppose the US has a comparative advantage in the
production of computers with respect to Canada. As a
result of free international trade, the US exports
computers to Canada. What is the most likely
outcome?
a. US consumers of computers are better off.
b. Everyone in both countries is better off.
c. Canadian consumers of computers are worse
off.
d. Producer surplus in the US increases, and
consumer surplus in the US decreases.
Scenario BRTD. Two firms, A and B, each produce
the same product at
AC MC 1
. They each set
prices: PA and PB. Prices can be anywhere between $1
and $51. If PAPB, consumers buy 10 units from the
low-price firm, and 0 from the high-price firm. If
PAPB, consumers buy 5 from each firm. The
payoffs are the profits of each firm.
18. See Scenario BRTD. How much profit does each
firm receive if both firms charge $21 per unit.
a. $100
b. 0
c. $400
d. $200
19. See Scenario BRTD. If both firms charge $21 per
unit, then
a. both firms will want to deviate.
b. only firm B will want to deviate.
c. neither firm will want to deviate.
d. only firm A will want to deviate.
20. See Scenario BRTD. Which of the following strategy
profiles forms a Nash equilibrium?
a. both firms charge $50
b. both firms charge $1
c. firm B charges $50 and A charges $1
d. firm A charges $50 and B charges $1
You're Reading a Preview

Unlock to view full version

Subscribers Only

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.